The recent iOS 14 update has had significant consequences for businesses running Facebook Ads, and it’s important for business owners to understand the impact of these changes.
With the new iOS 14 update, Apple introduced it’s new privacy measures, including the so-called app tracking transparency feature, which requires apps to ask users for permission to track their data. And the clue? According to Facebook, around 50% of users are declining this app tracking request, limiting the availability of data for targeting and measurement. And Meta’s statement might even be underselling it, Statista suggests over 90% of users are disallowing the tracking option.
But, why is Facebook so dependent on data collection and tracking?
Essentially, the more data Facebook has on its users, the better it is able to target ads and measure their effectiveness. By collecting data on users’ interests, demographics, and behaviors, Facebook is able to serve ads that are more relevant to specific audiences, which can increase the likelihood of conversions. Apple’s wall of privacy is hurting this data-gathering process severely.
The Painful Data
One of the main effects of the iOS 14 update has been a decrease in the average return on ad spend (ROAS) and conversions for many businesses.
Before the iOS 14 update, the average return on ad spend (ROAS) for businesses running Facebook Ads was around 4.0, with an average conversion rate of around 9%. Additionally, the average cost per action (CPA) was around $20, with a click-through rate (CTR) of around 2%. However, since the update, many businesses have seen their ROAS drop to around 2.5, with a corresponding decrease in conversion rate to around 6%. The CPA has also increased to around $30, and the CTR has decreased to around 1%.
All and all, an update that hits home for a lot of business owners.
Overall, the iOS 14 update has had significant consequences for brands running Facebook Ads and it’s clear that business owners will need to adapt their strategies in order to continue effectively reaching and converting their target audiences.
While this change has presented many challenges for business owners, it’s important to remember that it has also opened up new opportunities. With Facebook becoming a less effective option, the rage for platforms such as TikTok and Google Ads have once again increased.
Together with an increasingly attractive content-landscape that now includes forms of User-Generated Content (UGC) and Short-Form Content, this change in advertising might bring about new fortune for the flexible and observant business owner.