Data & Tech

How Facebook advertisers are faring after Apple’s privacy update

Several are moving some of their ad spend to other channels.
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Francis Scialabba

6 min read

Last fall, it seemed like the sky was falling on Facebook. Even though it survived an onslaught of investigative stories about the harms its products can allegedly cause after a leak of internal documents (not to mention an awkward rebrand to Meta), an iOS update is now expected to cost the company nearly $10 billion in lost revenue this year.

In April, Apple made changes to its phone operating system that effectively stopped apps from tracking users across the web—unless they opted in.

Surprise, surprise, most didn’t—only 18% of US users have opted in, according to Flurry, an app analytics company.

The change made it much more difficult for advertisers to see who bought what and why, clouding the efficacy of critical advertising tools that have been important to the company’s bottom line. Marketers told Marketing Brew they were flying blind, unable to see conversions and optimize ad spend.

Apple’s update has made it harder for Meta to provide accurate conversion data. In September, Facebook’s VP of product marketing, Graham Mudd, wrote that the platform was underreporting iOS conversions by about 15%. As of last month, that figure was closer to 8%, according to the company.

Recently, Google said that it would also limit tracking on Android devices, albeit over a two-year window.

Almost a year after Apple’s change went into effect, advertisers told Marketing Brew how they’ve adjusted.

“There’s obviously some signal loss happening and things are different from a year ago…in terms of attribution, however, the demand and spend are still there,” said Avi Ben-Zvi, VP of paid social at the performance marketing agency Tinuiti. “With our advertisers, we say [that] it’s not a matter of if these conversions are still happening…it’s a matter of getting that attribution back to the platform, right? It’s not like consumer behavior has changed.”

To determine whether clients’ ads are working, Ben-Zvi said he runs tests to measure geo-targeted audiences that have seen Facebook ads from a given brand against those that haven’t, seeing whether there’s an incremental lift that can be applied to broader targeting.

“If we’re live in markets with significant Facebook spend, is there a direct correlation with more direct organic conversions on site, or even conversions coming from paid search, potentially?” he told Marketing Brew. It’s not an exact science, but it can help advertisers figure out what works, he explained.

Media mix

For some advertisers, though, the loss of signal has forced them to lean on other platforms, explained Freddy Dabaghi, SVP of media at the performance marketing agency, MMI.

“A lot of brands also took this as an opportunity to diversify and try other social channels, or other media mixes,” he said. His clients, largely e-commerce and DTC brands, have shifted their spending to paid search.

“There’s a lot of distrust [for] Facebook’s conversion modeling and how well it’s working. That’s definitely a place that I think we’re collectively, as an industry, still flying a little blind as Facebook continues to build out what that model looks like,” said Dabaghi, referencing Facebook’s own Conversions API, a server-side tracking tool intended to replace its tracking pixel.

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It comes with limitations, though, like a lag of up to three days on performance data in some instances, so advertisers are skeptical that it’ll replace Facebook’s previous ad products’ effectiveness.

“Personally, I think [Conversions API] might work, but I have no idea,” said Bing Howenstein, CEO of All33, a company that makes, markets, and distributes office chairs. “When there’s a Wizard of Oz somewhere behind the curtain, you’re never really going to know what levers they’re pulling.”

Though All33 had already intended to diversify its marketing budget, the iOS changes “accelerated” that plan, Howenstein explained, as it’s now allocating 60% of its budget to Facebook this year, as opposed to 75% in 2021. The difference has instead been allocated to Google products like Shopping and Display, as well as Pinterest, he told Marketing Brew.

Soda-alternative brand Olipop spent about 30% of its budget on Facebook in 2021 and is expecting to spend only 24% on it this year, according to Audrey Bryce, a growth marketing manager at the company.

It’s been taking a “more manual” approach to attribution, she said, asking customers at checkout where they first heard about Olipop, then matching that info with UTM parameters from a Google Analytics code that tells the brand where a user clicked on an Olipop advertisement. (If you click on a link in a Marketing Brew newsletter, you’ll see a UTM parameter in that URL, for instance.)

By looking at the data side by side, Bryce can get an understanding of what’s working.

“It is more manual than just doing what the platform gives you. But it gives you a more accurate view, in my opinion, than what Facebook’s able to give you at this moment,” Bryce said.

Privacy Sandbox comes for Android

In February, Google said that it would begin curbing advertisers’ access to Android users, giving the industry a two-year timeline to prepare.

That’ll see Facebook lose insights into both iPhone and Android users, another smokescreen clouding conversions. But, this time, advertisers will have more time to figure out what to do next. For what it’s worth, Facebook’s Mudd tweeted that he was encouraged by Google’s “long-term, collaborative approach to privacy-protective personalized advertising” following its announcement.

“[Facebook] will not be surprised…Whatever the future shape of privacy sandboxes for Android, Facebook is likely to have time to build against it,” said Chris Kane, founder and president of Jounce Media. “It might hurt their business, but it won’t be a shock to the business in the way that [Apple’s change] was.”

In the meantime, it’s still one of the largest advertising platforms in the biz.

“Even a Facebook that [had] one leg knocked out from under them is still superior to every other platform to acquire customers,” said Neil Kusens, the CEO of Modloft, a DTC furniture brand. “Is it as good as it was? Absolutely not. Is it better than pivoting to TikTok? Yes, at least for our brand.”

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Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides.