In the coming months marketers may see their performance and audience size decline in their social advertising campaigns.
As part of Apple’s new iOS 14 system, new changes to the Identifier for Advertisers (IDFA) are introduced and they will be rolling out this spring. Implemented as a privacy measure, this update requires apps to prompt users to opt in to tracking using IDFA.
From what we have already seen, more than 30% of iOS users have disabled all IDFA-based tracking from their system preferences and this new measure is anticipated to increase the opt-out rates, meaning that advertisers' ability to track and target users with ads as well as measuring the performance of ads may be impacted.
As Social Media platforms will be able to gather less and less signals from consumers, their preferences, how they use apps, where they use them, when they use them and for what, it will become more and more difficult to predict user behavior. In essence, it will be more difficult to distinguish those consumers who are ready to buy and those who are not.
The lack of these intent signals will affect every marketer - not just those who advertise app installs for iOS14 devices. In addition, the impact goes well beyond marketing, as the reliability of the income stream of online campaigns is put into question. Social platforms might not be as effective in finding conversions as before, which can affect CPAs.
The two questions marketers should be asking right now:
How can we mitigate the business risks? This is the bigger question and requires attention from the entire company. As a CMO, do you know how much of your ad-induced revenue is relying on IDFA? If not, now is the time to find out and build a strategy to ensure that revenue stream in the future.
What strategies will help to offset the potentially less effective campaigns and rising cost of user acquisition? Now is the time to rally your marketing team and your ad delivery, targeting and measurement partners to put in place tactics and processes that will reduce the impact on ad performance.
What Will Change for Social Advertisers After the IDFA Deprecation?
The change in tracking, or rather not tracking, consumers across apps ushers all marketers to a new era - not just those who have been laser focused on performance marketing and conversions. The changes are two-fold:
- measuring and attributing ad performance will be affected
- targeting and optimization will become harder.
On the measurement and attribution side, this shift will most likely make it more difficult for marketers to track cross-device campaigns, have reliable attribution models, and measure conversions like they used to. Smartly.io’s partners offer a variety of solutions that will help marketers maintain their confidence level in attribution.
On the targeting and optimization front, the impact might be slower to manifest as nothing will break overnight. Longer-term however the less effective algorithm-based optimization will force advertisers to re-think their creative strategies. The less effective the algorithm is to find conversions, the more effective the creative needs to be to balance the equation.
New Focus on Creative and Branding
It is time to start thinking creatively again! While it still remains to be seen if the shift in users’ privacy measures will result in a 5% decline or a 50% decline in your performance marketing ROI, it is clear that mitigating the effects needs to start now.
Having less data to depend on is a boon for the creative industry. It makes marketers less reliant on machine learning and more reliant on relevant, personalized creative that is delivered in the right place at the right time, ie. privacy-friendly contextual targeting. Instead of taking a product picture and showing it ten times to the best performing target audience, brands now need to accept that the audience they target is more opaque and not as easily persuaded as before.
This wider audience forces brands to focus on branding again. They need to highlight what makes them unique, what makes them stand out, what makes them relevant to consumers. Brands need to look at their full-funnel activities and ensure their story is compelling all the way to that conversion point. At Smartly.io, we call this performance branding.
Performance marketers need to take a page from the brand marketing playbook and start to think creatively about the data available as well as 1st party data to help their ads to stand out. As in most cases, the door goes both ways: brand teams will see their responsibility grow as they need to make sure their campaign concepts go beyond building awareness and truly dig all the way to the purchase event.
In 2021, the winning brands are the ones who can implement their campaign ideas into their performance campaigns too. As the pendulum swings back from the hardcore performance advertising into a more branding territory, it will be interesting to see how this change impacts collaboration between different teams and agencies as well as how marketers approach their budgets in the future. Is 2022 the year when there are no more separate brand and performance budgets?