Facebook used to be so simple – and free – for companies to use. With a few carefully written words you could build a loyal army of fans, who would see every comment you posted. However, since the halcyon days of prosperous organic reach, a combination of unfavourable algorithms, the death of the chronological feed and advertising opportunities opening up on the channel, has meant that reaching fans is now more complex and no longer free. On the flip side, this pay-to-play model meant that brands could be laser focussed in reaching their target audience in a very cost-effective way, which is why everyone from start-ups and SMEs to large corporates and household brands have been channelling their ad budgets Zuckerberg’s way. This symbiotic relationship worked well, Facebook was happy, companies advertising via the platform were happy. Which is why Apple’s much hyped new update has upset the proverbial applecart.
Apple’s iOS 14.5 update has created a clash of the titans in Silicon Valley. While most other software upgrades go largely under the radar, introducing low key features and fixing minor issues, Apple’s latest feature overhauls digital privacy for Apple users. This has infuriated Facebook. The ‘App Tracking Transparency’ framework does exactly what is says on the tin: it makes sure that any app prompts users for permission before tracking activity outside of its own app. While it has always been possible to opt out of tracking, it took a conscious effort to do so, whereas this update puts privacy front and centre for consumers and puts control into their hands over the way their data is monitored and stored by app developers.
On the surface of it, this is a victory for the people. Thanks to famed Netflix documentary The Social Dilemma, consumers are becoming increasing aware of the fact that “if you are not paying for the product, then you are the product” – data is the new gold. And who hasn’t rolled their eyes at being stalked around the internet by a company whose website you just briefly visited and a whole host of their competitors? So, what is the problem? According to Facebook, a lot. Its main objection (if you are to believe the adverts it launched in protest against the new feature) is that by removing the ability to personalise ads, small business will no longer be able to successfully micro-target their adverts to a specific audience, essentially shutting down this affordable and effective marketing route for them. In an impassioned speech, Zuckerberg said: “When you hear people argue that we shouldn’t be doing these things – or that we should go back to the old days of untargeted television ads – I think that what they are really arguing for is a regression where only the largest companies have this capacity, small businesses are severely disadvantaged, and competition is diminished.” Facebook also points out that the new privacy framework is self-serving: by forcing reduced digital advertising, many apps will have to turn to subscription models, which in turn profits Apple.
The main concern for marketeers is whether the privacy update will have a cataclysmic impact on Facebook advertising (which will impact Facebook and Instagram, as both platforms are part of the Facebook family) and therefore whether they should be re-thinking how to channel their ad budgets. The short answer is that currently no one is confident of the answer. The update started to roll out in April and, so far, the sky hasn’t fallen. However, with tools such as Facebook Pixel becoming all but redundant when iPhone users opt out of Facebook app tracking, it isn’t a case of whether it will have an impact, but how extreme that impact will be. Facebook cannot afford for this update to destroy its revenue stream so is actively fighting it and exploring work arounds. It has countered the tracking permission pop ups from Apple with its own pop ups explaining to members why personalised adverts are a good thing. It is also worth remembering that the App Tracking Transparency update only impacts Apple devices, so things should remain unchanged for Android users, who account for around half of all mobile phone owners in the UK. It is also unknown how many people will opt out of tracking on the Facebook app. So, at the moment, it is a case of wait and watch – which we are doing with keen interest and will keep our clients updated when it’s time to change strategy.