What Apple’s iOS 14.5 Update Means for Your Business

Apple has always been a champion of data privacy. Whether or not that’s actually true in practice, Apple has gone to great lengths to emphasize how important user privacy is to them—especially in recent years.

Their latest move in pursuit of privacy? iOS 14.

Like it or not, iOS 14 is here to stay, and it will have an effect on how you do business online. Exactly how it will affect you and what you’ll need to do to adapt will depend on what you’re selling and how, but no matter what, iOS 14 is a real issue your business needs to tackle head-on.

So what exactly is the iOS 14 update? Where did it come from? What will it do to your business? And most importantly, what should you be doing about it? Let’s find out.

The iOS 14 Update

In a variety of ways, the iOS 14 update is Apple’s way of pushing back against the data leaks and intrusively personal advertising that has become the norm in today’s tech-saturated world.

Everything we do seems to be tracked by some cookie, bot, GPS locator, or algorithm. And to be honest, people are kind of sick of it…which is probably why Apple is so focused on giving users more ways to control their data with iOS 14.

Of course, you could easily argue that iOS 14 is actually an early move by Apple towards creating their own advertising platform by wresting control of user’s data away from platforms like Google or Facebook. Apple’s ecosystem already plays such a central role in people’s lives that this is a logical next step for the tech giant.

But, whether the iOS 14 update is motivated by altruism or an angle, the fact of the matter is that iOS 14 is designed to hobble online advertising. Not to kill it, but certainly to slow it down and make it less effective—and all in the name of privacy.

How Advertising Currently Works

Right now, most advertising is driven by cookies. If you’re not familiar with what cookies are or how they work, this video should catch you up to speed.

Put simply, a cookie is a small piece of code that advertising platforms like Google or Facebook use to track people who visit your website.

For example, when you add the Google Ads pixel to your website, it includes instructions for adding a cookie to the browser of your site visitors. That way, Google can keep track of your site visitors.

Through the cookie, Google can tell when a visitor who clicked on one of your ads converts on your website. It can see which sites they visit after yours and show them retargeting ads to get them to come back and make a purchase…give your business a call…or even visit your physical location.

The cookie tracks everything a user does online and feeds that information back to Google (or whatever advertising platform you’re using), giving Google all kinds of data and insights they can use to put your ads in the best possible places at the best possible times.

And all of that tracking and communication takes place via a cookie and the pixel on your website.

Without that cookie and the data it sends to your pixel, your business is essentially blind. You can tell how many impressions and clicks get, but you don’t know what happens afterwards.

Did those clicks turn into conversions? You’ll never know. For the clicks that didn’t turn into conversions, can you get back in front of them and nurture them until they’re ready to convert? Not a chance.

To date, pixel- and cookie-based tracking has been the cornerstone of online advertising. The data passed from cookie to pixel to you is what makes online advertising fundamentally different from offline advertising—you can see the results of your ads and make adjustments based on what’s working…and what isn’t.

What’s Changing in iOS 14

In Apple’s opinion, however, this system is fundamentally flawed because it prioritizes advertising efficacy over personal privacy.

Now, some people argue that because more data leads to better, more relevant advertising, people actually benefit from being followed all over the internet by a variety of cookies. After all, the better Google and Facebook and the other ad platforms are at figuring out what you’re interested in, the more likely you are to be shown ads for things that you’ll want to buy.

But again, this arrangement still favors the advertisers over the individual. At least, that’s Apple’s belief.

To correct this problem, Apple is making several key changes to how advertising platforms are able to track user behavior. The most important of these changes is that Apple will require apps that engage in what Apple defines as “tracking” to show a prompt to iOS 14 users asking them if they are okay with the app tracking their online activity.

So, if iOS 14 users refuse to allow Facebook or Instagram to track them, Apple will prohibit Facebook and Instagram from collecting a lot of the data they have been using to report conversions, identify users who have visited your website and optimize your advertising.

Now, Apple isn’t going to completely eliminate ad tracking. Instead, they’ve come up with a clever way to feed information about conversions to your pixel…on Apple’s terms.

Rather than letting a cookie track your site visitors across the internet, Apple will keep track of their behavior on your site directly on their device. If they convert within 7 days of clicking on your ad, Apple will report that conversion back to the advertising platform.

However, to ensure that the ad platform can’t connect that conversion to an actual click (and by extension, an actual user), conversions will be reported back to the ad platform at a random time somewhere between 24-48 hours after the conversion takes place.

As you can probably imagine, this is better than nothing, but iOS 14 will still create all kinds of challenges for advertisers—especially ones who are trying to market products or services with complex selling points.

Potential Challenges

Attributing Conversions

In business, there’s no such thing as a one-size-fits-all solution. We’re all selling different products or services to different audiences in different ways.

Apple’s “solution”, however, doesn’t really allow much flexibility for all of those different scenarios.

Take Apple’s 7-day click, 1-day view-through attribution window, for example. According to Apple, people are unlikely to remember an ad that they clicked over a week ago, so that ad shouldn’t get credit for a conversion outside of that window—even if that ad was how the person first encountered the business.

While that may be true for some businesses, it’s certainly not true for every business. It might not even be true for most businesses.

For example, one of my clients sells anime phone cases. They use Facebook and Instagram Ads to drive awareness for their business because most of their customers are unaware that their products are available.

Now, as far as products go, you’d think that phone cases would be a perfect fit for Apple’s 7-day click, 1-day view-through attribution window. In fact, that’s the default attribution window this business uses.

However, despite that fact, a significant percentage of my client’s sales actually take place well over a week after the initial click—sometimes weeks to months later!

Apple would argue that the ad they originally clicked on had no influence on that purchase because of the intervening time gap, but without that ad, the customer wouldn’t even be aware that my client’s products even existed. So, while the ad may not have produced an immediate sale, it certainly wasn’t irrelevant and should be accounted for when evaluating the effectiveness of the ad campaign.

Things get even more complex when your business has a lengthy sales cycle. Higher education institutions, for example, may have potential students click on their ads and visit their site dozens of times over the course of several weeks before finally deciding to submit an application.

Attribution models have always been a tricky part of online advertising. Insisting on a simple, one-size-fits-all model will make things even more difficult for companies with complicated funnels.

But, whether your funnel is simple or complex, Apple’s refusal to report conversions more than 7 days after an ad click means you will miss out on important data. Without that data, it will be hard for both your business and your ad platform’s algorithms to make informed decisions, which will likely lead to reduced performance over time.

Reporting Delays

Online advertising is very different from offline advertising. When you pay for a billboard, you buy a specified amount of time in advance and hope that things work out. When you run an ad online, you have to make a series of ongoing decisions.

Is this ad working? Is it driving profitable conversions? Should we leave it running or tweak something? Oftentimes, if you’re watching your data closely, you can catch problems quickly and save yourself a lot of money.

With iOS 14, however, Facebook may not report conversions for up to 3 days. If your business uses Facebook to track conversions, you may not be able to effectively evaluate an ad campaigns performance until it’s been running for several days. That time delay could cost you big time.

Using the right analytics solution (if you need help with this, let us know here!), you can keep track of things on your own, but even then, Apple’s delayed reporting solution will still affect your campaign performance.

How? Well, advertising platforms use algorithms to track, monitor and adjust your campaigns. To do that, though, they need data.

With iOS 14, ad platforms won’t learn about conversions until 24-48 hours after they occur. That means the algorithms will be forced to optimize new campaigns using leading indicators like clicks or engagement for days. As a result, it will take a lot longer to get a new ad algorithmically dialed in.

Over time, Apple’s reporting delay will have less and less of an effect on ads as the algorithm adapts. But, during the first crucial hours, days and even weeks of an ad’s life when you’re trying to figure out whether or not the ad is worth the investment, Apple’s new policies will make those decisions much more difficult.

Retargeting Audiences

No matter how simple your value proposition is, most potential customers aren’t ready to buy the first time they learn about your business. They may love your product or service. They may be excited about your price point. But even still, they won’t buy right away.

There are countless reasons why people don’t buy immediately. They don’t have the money on hand. They’re saving up for something else. They get distracted. They don’t really believe in what you’re selling. They think your offer sounds too good to be true. They want to do some research.

The list goes on and on.

The fact of the matter is, only a small percentage of the people who click on your ads will convert right away. However, that doesn’t mean that they won’t ever convert. If they’re a genuinely good fit for your what you’re selling and you can stay on their radar for long enough, there’s a good chance that they’ll eventually get interested enough to convert.

And that’s the whole idea behind remarketing and full-funnel marketing. People might not be ready to convert today, but with that handy little cookie in their browser, you can keep putting ads in front of them until they are ready to convert.

Except…Apple has decided that remarketing is a no-no.

Of course, you can still remarket to customers who come to your site on their desktop computer (provided they aren’t using Safari) or who aren’t using an Apple device, but if your business relies heavily on Facebook or Instagram mobile traffic, your retargeting is going to take a heavy hit.

It’s estimated that 85-90% of Apple users will opt out of tracking for the Facebook and Instagram apps. As a result, you won’t be able to retarget people who visit your site as the result of ads run on those mobile apps.

Since 80% of Facebook users and almost 100% of Instagram users only use the mobile app version of those sites, that means most Facebook and Instagram traffic will be ineligible for remarketing. Plus, your ability to build lookalike audiences around Facebook and Instagram visitors will be severely limited.

All of this is a tough break for lots of businesses. And, the more complicated your funnel and the longer your sales cycle, the harder iOS is going to be on your advertising.

How Will iOS 14 Affect Your Business?

Obviously, iOS 14 is going to create a lot of issues for a lot of businesses. However, not every business will be equally affected by this update.

As you’ve probably already realized, iOS 14 is going to hit companies that rely on Facebook and Instagram for advertising the hardest. Most Facebook and Instagram traffic comes from mobile devices, so the iOS 14 update is really going to limit and change Facebook Ads.

Will it be the end of the world? No, but it will be something you need to take seriously if your advertising strategy depends heavily on Facebook Ads.

That being said, even if your business isn’t dependent on Facebook Ads, if most people visit your site on their smartphone, iOS 14 can still have a big impact on your company. Safari might not be a very popular desktop browser, but 57% of US users use Safari as their mobile browser.

And, just like the rest of Apple’s products, Safari will follow all of the same rules and restrictions we just discussed. So, even if you’re not reliant on Facebook Ads, if you’re reliant on mobile traffic, iOS 14 may still create issues for you.

Another factor that will determine how big of an influence iOS 14 has on your business is the complexity of your customer journey. The more involved and lengthy your sales process is, the bigger an impact iOS 14 will have.

The simpler your value proposition, the less iOS 14 will affect you. It’ll have an impact either way, but if your product or service takes a lot of exposure or explaining to turn a prospect into a customer, that’s going to be a lot harder to pull off once iOS 14 goes into effect.

Finally, iOS 14 will have a much bigger impact on US and (to a lesser extent) European advertising. In the US and Australia, iPhones account for around 47% of smartphones. In Europe, the figure is closer to 30%.

Outside of these regions, however, iPhone usage drops dramatically. That’s why—globally speaking—80.5% of Facebook users access the mobile app on Android.

So, if your business does most of its advertising in, say, South America or India, the iOS 14 update probably won’t affect you very much. You might see some small decreases in performance, but you shouldn’t have a whole lot to worry about.

For US-based businesses selling stateside, on the other hand, iOS 14 will probably mean trouble. Unless your customers primarily interact with your business on desktop for some reason, there’s a very good chance that half (or possibly more) of them will visit your site on an iPhone and you’ll be subject to all of the challenges we’ve discussed.

Dealing with iOS 14

The good news is, even if iOS 14 is going to cause problems for your business, there are a variety of workarounds you can use to mitigate things.

For example, most analytics platforms can be set up to independently track which sales come from which ads and which campaigns. Since that data comes from your own website, you won’t have to worry about reporting delays or arbitrary attribution models.

Better still, you can use the Facebook Conversion API to send that website data directly to Facebook, cutting Apple out of the loop and speeding up reporting, results and algorithmic adaptation. It’s not quite as good as cookie-based reporting, but it’s a lot better than the alternative.

When it comes to retargeting, however, you’re going to have to make some adjustments to your strategy. Rather than relying on your advertising platform to build audiences for you, it will be important to put a priority on getting identifying information directly from site visitors.

One of the easiest, best ways to do this will be to focus on getting email addresses and/or phone numbers. If you can get that information from potential customers or clients, you can upload it to your ad platform and use it to build retargeting lists and lookalike audiences. It’s a bit old-school, but it works.

As an added bonus, building your email/SMS marketing list also gives you the ability to reach out to those same people in additional ways, expanding your marketing reach and giving you another way to nudge them towards conversion.

There are other technical considerations as well, but to keep things simple, we’ll leave those for other articles. But, if your team knows what they’re doing, it should be fairly easy to get them pointed in the right direction using what we’ve discussed in this post.

Conclusion

Whether you agree with Apple’s privacy push or not, one thing’s for certain: iOS 14 will affect your business. Just how far-reaching that impact is will depend on your market, your business and your marketing team.

At this point, you should have everything you need to get your business and your team pointed in the right direction. The rest is up to you.

If you seize this opportunity to get ahead of iOS 14 and start preparing today, you’ll be well-positioned once Apple starts pushing the update out to its users. It will be a headache, for sure, but with the right approach, iOS 14 will be a roadblock…not a pothole.

That being said, if you’d like some help adapting to the challenges of iOS 14 and taking your marketing to the next level, let us know here or in the comments! We’d love to help.

What’s your stance on iOS 14? Do you think it’s a move in the right…or wrong direction? How is your business adapting? Leave your thoughts in the comments below.