How The Apple iOS 14 Update Will Effect Facebook and Instagram Ads (And Other Paid Traffic Sources!) For Small Business

Prefer to watch & listen rather than read? Check out my YouTube video or my podcast episode about this topic.

If you are a business owner that runs any sort of Facebook or online ad-- you’ve likely heard of the “Apple V. Facebook” war, brought on by the newest iOS14 Apple device update that Apple will soon be pushing for all users.

So, what is this iOS 14 update? And Why does Facebook care?

Basically, Apple is making it a lot easier for people to opt out of data tracking. 

Data privacy is something many people are concerned about right now, and that is Apple’s main reasoning behind this update. 

While I am fully on-board with data privacy, what many people don't realize is that this opting out of data tracking is going to lead to a WORSE user experience on all apps, especially social networking apps like Facebook, Instagram, and TikTok. This update is going to PREVENT advertisers from leveraging a user’s data and activity to deliver tailored ads to them. 

This means that if I opt out of data tracking, I might be scrolling through my feed and see ads for hunting gear-- something I am not interested in-- instead of something that is more relevant to me.

And that is really what Facebook is terrified of. 

They're concerned about ad costs going up, therefore losing advertisers on the platform. They are also worried this damaged user experience will cause users to drop from the platform. Both of these issues could mean the END of Facebook, because ads is how Facebook brings in a bulk of their revenue.

So Apple is going to be allowing people to OPT-OUT of data tracking two different ways.

Number one, in the actual app store, it's going to be a lot more transparent exactly what data all apps are going to track. New app installs might decrease as a result, and app developers will start reigning in what data they are tracking, as to not “scare” potential customers away from this increased transparency.

Second, if you already have an app installed on your phone, like Facebook, that tracks user data, there's going to be a pop-up that comes up on your screen as shown below. This pop-up will allow users to easily opt out of data tracking with just one click.

And as I mentioned, when users opt out of data tracking, they are also opting out of ad personalization. 

Facebook has actually commented on this and reported that they believe that ad personalization opt-in is going to decrease from what it is right now, which is around 100% to less than 50%. 

In other words, Facebook thinks that more than 50% of users, when they see this pop-up, are going to opt-out of data tracking and they're going to opt for data privacy.

That’s VERY bad news for Facebook, Instagram, Google-- all the paid ad platforms that rely on this information to empower advertisers to target and analyze their ads. 

This will also significantly impact small businesses who rely on these ads to fuel their business at a low cost due to the personalized nature of the ads.

In a year where small businesses are struggling more than ever due to the COVID-19 crisis, this may have devastating effects, and could easily be the last nail in the coffin for many establishments we know and love.

In the same report, Facebook prepared advertisers to expect as much as a  60% cut in terms of revenue that advertisers can expect from their Facebook ads. 

So basically that’s saying if you previously spent $1 on Facebook and could expect to earn $5 in revenue as a result of those ads (so, a 5x return on ad spend or ROAS), now you're going to see that $5 drop to $2. 

So instead of a 5x return on ad spend, you can expect 2x return on ad spend. So for every $1 you put in on Facebook ads, you're only getting $2 back in terms of revenue or sales or clients, or however you earn revenue in your business. 

That 60% cut again could be devastating for many small businesses, especially e-commerce businesses or any business that heavily relies on Facebook ads to generate revenue. 

And one MAJOR misconception is that this update will just be effecting Facebook and Instagram ads.

This is an entire Apple-wide device update and will effect all apps used on these devices. So it's going to affect Google ads, YouTube ads, Pinterest ads, it's going to affect everything. 

So it is not just Facebook and Instagram ads, but since those are the most widely accessible and the most widely used ad platforms right now are spoken about, that is what everyone is talking about, but it is going to affect all of your ads as long as they rely on user tracking data or conversion events,

So now WHO and WHICH businesses or advertisers is this iOS14 Apple update affecting? 

The answer is:

1. Anyone who's using conversion-optimized ads (meaning, the ads track if the user completes an action, makes a purchase, etc)
2. Anyone using user-data or activity (like when users visit specific pages on your site) to target their ads
3. Anyone who utilizes the data tracked by the Facebook pixel to either create audiences OR track the results of their ads (

This is going to make it very difficult to establish how effective our Facebook ads are. 

We will no longer be able to see which opt-ins, leads, or purchases come directly from ads, and this impedes our ability to make data-driven decisions and use our advertising budget wisely.

So, what changes can we SPECIFICALLY expect?

There are five big changes that you need to be aware of (this part is Instagram and Facebook ad specific).

1) Facebook is now only going to allow up to eight conversion events. 

Right now you can have as many custom conversion events as you want. This is not going to affect many businesses that are just getting started with Facebook ads. But if you are an e-commerce store, or if you have been investing very heavily in Facebook or Instagram ads like I have, this absolutely will affect you. 

2. No more real-time ad result reporting. 

Previously, we could send a Facebook or an Instagram ad out into the world and within a couple hours, depending on the size of the budget and how quickly the ad is approved, we would be able to see through the results coming in, almost in real-time. Now, all of that is going to be delayed.

3) Ad results are now going to be ESTIMATES

This could lead to under reporting on actual results from or it could lead to over-reporting. This just further cements that it's going to be much harder to analyze the results of Facebook and Instagram ads and make data-driven decisions after this iOS 14 update. 

4) Fewer breakdowns of ad results

Facebook has also said advertisers can no longer drill down on their reporting and analyze results based on a user’s age, gender, region, or any other category that would affect that users data privacy.

5) The click attribution window default will now be 7 days.

An attribution window is the number of days between when a person viewed or clicked your ad and subsequently took an action. We measure ad actions based on clicks and views of your ad.

Click-through attribution: A person clicked your ad and took an action.

View-through attribution: A person saw your ad, didn't click it, but took an action within the attribution window.

This could previously be set to 1 day or 28 days.

Now let's talk about what you need to do in order to get prepared and set your business up for success before this change actually happens.

1) Verify your domain in Facebook Business Manager

Facebook has asked users to do this ahead of the Apple iOS 14 update too protect their accounts and limit the disruption when using the ads platform.

I recorded a quick tutorial on how to do this quickly here.

2) Think about installing CAPI (Facebook’s conversion API)

This one is just a suggestion, but if you have an ecommerce site and use a platform like WooCommerce or Shopify, you should be looking into plugins and apps that can help  increase the reliability of data passed from your site back to Facebook so that you can better optimize your Facebook ads. Now that the Facebook pixel is going to be very limited, this is something many e-commerce owners are turning to. Only time will tell if this is a band-aid solution or a long-term solution, but hey-- it can’t hurt!

3) Turn on advanced matching on inside of “events manager” inside your Facebook Business Manager account

This is another thing Facebook has suggested all users do, and it takes less than a minute. Just open up your Facebook business manager, navigate to events manager, and make sure “advanced matching” is set to ON.

4) Re-think your ad objective strategy

Now that we will have limited abilities to re-target users with ads based on what they do around the web, we will need to rely on IN-APP activity, which for now, seems to still be available for advertisers to use for targeting purposes.

A great example of this is something I do frequently on my business page. I will post a value-packed video, and then re-target anyone who watches or engages with the video with an add that contains some sort of offer (free or paid). This saves me money because my offer (which is usually a traffic or a conversion ad-- both relatively expensive objectives to use based on cost per impression) is only getting showed to people who have already expressed an interest in the topic and have been “warmed up” to it, since they watched at least a portion of my video.

Start brainstorming ways that you can retarget people based on their in-app activity (this may involve some content creation or a change-up in your social media strategy!)

5) Investigate Facebook and Instagram shops

This is something that has been really popular in my brick and mortar business membership. A lot of businesses are beginning to upload their product catalogs and sell things right on Facebook and Instagram. 

And again, because the purchase activity is taking place in the actual app, Facebook is able to use that information to better deliver ads to those users who take action in the future.

6) Diversify your free AND paid traffic sources . 

Something that I always make sure to do, and will pay extra attention to now, is diversify all of my organic traffic, especially. 

My website gets traffic from Pinterest, my YouTube channel (not YouTube ads-- I’m talking my free videos), my podcast, and my blogs-- among other sources like interviews I have done or publications I’ve been featured in.

The difference with organic content like YouTube videos or blog articles is that people proactively search for them, they are not ads, so these traffic sources will not be effected by this update. 

Make sure you have a comprehensive and intentional content strategy in place so that you are constantly showing up in search results, and that you're not just relying on paid ads. This is not something that's going to go away. Ad blockers are going to continue to increase in popularity and the amount of data we're going to be able to track is going to keep decreasing. So this is something you need to get ahead of.

7) Build your business assets (like your email and SMS lists)

Because I have a constant flow of traffic to my site and have strategically placed opt-ins and “lead magnets”, I'm constantly building my email list organically, which will be increasingly important to do.

Start coming up with a strategy where you can collect phone numbers and email addresses.

This all boils down to being able to connect with your customers and contact them and put your products and services in front of them. 

So as long as we're able to reach them (in ways OTHER than paid ads), we can continue nurturing them and building real, long-term quality relationships with them.

8) Focus on Customer Lifetime Value and Customer Retention (And here’s a bonus! Affiliate marketing)

We all know that it's a lot harder to acquire a new customer through a Facebook ad or something like that than it is to keep a customer. 

So do surveys or hop on the phone with your current customers-- and ask them. What else do they need? Is there a part of your customer value ladder that you are missing? Do they wish you offered them a product or service that you DON’T yet?

This will be a huge opportunity for business owners.

Now let's talk about retention. If you have a subscription or a membership based business or rely on repeat-customers for your success, this will be key for you.

I have a membership, and in the new year I will not only be focusing on how I can get new members, but I will also be focusing on creating templates and systems in my business to make sure that if somebody is thinking about canceling, I have a process in place to potentially reassure them and prevent that cancellation.

Something else I am going to be really focusing on in 2021 is my affiliate strategy. 

A priority will be placed on giving other people and business owners the tools, email, swipe files, ad swipe files, codes, sales pages-- everything they need to talk about my products or services and offer them successfully to their audiences.

This will allow me to tap into someone else's customer base or their audience without having to utilize any paid ads.

In return, affiliates make commissions on their sales. But this is a low-risk strategy for most since affiliates are not paid until they get results and generate revenue for you.

Hopefully this cleared things up a bit for you regarding the iOS 14 Apple update, and I hope it got your mind gears turning. And honestly, I hope this actually left you feeling really invigorated and excited. 

Again, it all boils down to being able to connect with your customers and form relationships with them. And all we have to do is be able to reach them.

So cheers to the new year and cheers to getting creative with our businesses!

MOST business will NOT adapt and pivot, so if you are still here reading this-- you WILL be ahead of the curve. Kudos to you!