The privacy updates of iOS 15 have changed the game for marketers. Brands have been relying on funnels and retargeting to drive people to their websites using lookalike audiences. Essentially, when a prospect lands on a brand’s website or app they were put into a retargeting pool based on a Facebook pixel or IDFA but iOS 15 is now asking for an explicit opt-in from customers to provide this information.

The impact is that fewer conversions are being registered and the Facebook algorithm takes longer to be in the learning mode; hence it is not as good at optimization. Ultimately, this raises the prices on conversions, because the algorithm bounces around between numerous people before honing in on the right audience. The other issue is that with the pent-up demand of dollars from venture capital and private capital going into consumer companies, the auction price has gone up substantially, but the supply of people and ad slots has not risen to meet this demand. These two issues result in an almost doubling of customer acquisition cost for consumer brands on Facebook and Instagram – which is unsustainable for brands. For advertisers, it can feel like we are back in 1984 because there is no workaround to get all of this data back. Instead, we have to move our mid funnel further up.

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Three ways brands can adapt

Personally, I’m a fan of the increased privacy. It’s a really good thing for consumers that they’re not getting advertising based on creepy cookies. However, advertisers have to find a way to lower conversion costs or risk being out of a job. The solution is that brands now have to rely on more opt-in and first party data. Here are three things brands can do:

Connect your ecommerce platform and Facebook

The first step is salvaging the conversion information that you can capture. Right now, a lot of people are using the pixel to track conversions in addition to retargeting. Instead, you need to have an API connection between your ecommerce platform and Ad platforms like Facebook to make sure that you are uploading your converted audience directly to Facebook. This allows you to track conversions in that environment. Your email address comes in with the line level data and this is something that isn’t cookie based; meaning you can have an actual reflection of what’s happening on conversions – but this is just table stakes.

Change how you identify your audience

How advertisers define what a successful campaign is on the acquisition side needs to change. Day-one conversions can’t be the metric for success in these new parameters. Ultimately, it’s a lot easier to get somebody to sign up for an email address or a text message flow than it is to get them to convert on day one. Once you have this first party data, you can then take all of your retargeting or a section of your funnel and use free impressions on one side. The information can then be uploaded into a custom audience on Facebook and you can retarget based on first party data rather than simply using a company. To do this, you have to make sure that your models are working across different devices, especially iOS which we all know can be a bit wonky. Essentially you are just using Facebook as your way of acquiring email addresses or phone numbers, and using those to retarget and then free impressions to push people farther down the funnel.

Mix up your marketing channels

As I mentioned previously, we can’t entirely solve this problem or find a workaround to  keep doing things the same way that we have been in recent years – we have to adapt. The first two points can help keep your customer acquisition costs from doubling on Facebook and Instagram, but those costs will still rise. Because of this, brands need to re-evaluate where they are spending their advertising budget and the answer to that is increasingly: “Not Facebook”. This doesn’t just mean that we need to cast a wider net and hope for the best, it’s about focusing on channels that are worth investing in because they make sense for your target audience. For example, Google has seen a smaller impact from these paradigm shifts since it doesn’t rely on cookies. Instead it relies on last-click attribution. On the Youtube side it’s clear they have increased their ad loads to keep prices steady making it an appealing option. A surprising option that has emerged is connected TV. Previously connected TV was seen as too high-cost, but with the cost of Facebook rising so sharply, it has become much easier to justify the expense.

At the end of the day, I think these changes can be good for both consumers and advertisers. From the consumer side we can all appreciate the increased privacy and from the advertising side we can adapt with the use of first party data – it will just require a shift in how we operate and how we identify a customer’s long-term value to a brand.

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