We all know that apps collect our data. We also know that just about no one reads the existing and very long privacy policies that are full of legal jargon to see exactly what is being done with our data. So late last year, as part of iOS 14 and iPadOS 14, Apple set out to rectify that. They introduced a new requirement for all software developers that publish apps through its App Store that they must include privacy labels. These look a lot like nutrition packages that are printed on the side of food packaging. The new labels indicate in an easy-to-read format exactly how data is going to used. 

• Privacy Label — already released, it requires every app to give users an easy-to-view summary of the developer’s privacy practices that includes how an app uses their data — including whether the data is used to track them, linked to them, or not linked to them.
• App Tracking Transparency — set to be released this spring, it requires apps to get the user’s permission before tracking their data across apps or websites owned by other companies.

The new privacy labels began appearing in the App Store in December 2020. At top-of-mind for advertisers is whether or not the new privacy labels will influence users’ choices and how this will influence their digital advertising strategy, potentially limiting campaign measurement and attribution on Facebook. Will the new requirements stop users from downloading the app? We don’t know yet. 

When a user opts-out of data tracking, that means apps cannot gather data to share with  data brokers.  What this trickle-down effect means for digital advertisers is that there is less robust data to back targeted advertising. And, data brokers are just the beginning. There is a vast network of apps, social media companies, websites, etc., that rely on capturing vast amounts of user information across different platforms. According to Apple, the average app has six trackers, which in most cases allow third-party data collection and link data from many different sources.  

Facebook’s Response

While the scope of these changes and their affects are far reaching, entangling the entire mobile-app ecosystem, many advertisers are looking for alternatives – as they rely on Facebook to run and personalize ads on their own platforms and other third-party apps.

Most recently, Facebook responded to the Apple changes saying it would shutter conversion-lift studies, instead providing “alternative options to help you effectively test and optimize your ads in response to the limitations resulting from Apple’s updates.” These studies were used test and control groups to measure returns on ad campaigns. They also helped advertisers gauge a user’s propensity to buy after seeing ads on the platform. Without targeted ads and lift tests going away, small businesses won’t be able to reach their customers as well as before. Some are predicting a regression in the industry and a return to older measurement techniques like geo matched-market testing. I have seen rumors online that Facebook is running a beta test for such a tool.

Looking Forward

As with all change, not every outcome is necessarily bad. These privacy changes could lead advertisers to engage in different approaches like media-mix modeling and insight garnered from a variety of sources. Facebook’s look-a-like program is an excellent targeting strategy.  Building a database and using e-mail is a tried-and-true retargeting method of reaching customers and prospects.

If you need assistance navigating through these changes, let’s talk.