How Apple’s New Privacy Settings are Impacting Marketing and Advertising Agencies

It’s been a few months since Apple introduced a privacy change restricting how users are tracked on their iPhones and other Apple products, in April. In an attempt to let users decide whether to share their data or not, apps are now required to ask users if they want to be tracked, posing a serious problem for Snap, Facebook, and millions of other companies who rely on Facebook data.

Since the policy was first introduced, 62% of users have opted out of tracking by popular apps including Facebook, Instagram, and Snapchat (AppsFlyer). In doing so, these apps are getting less data on consumers’ interests, and cannot target ads towards users as effectively.

Today, advertisers are finding it harder to target potential customers and are dealing with increasing ad prices due to Apple’s privacy change. Because hundreds of small businesses, ranging from retailers to fitness moguls, rely heavily on Facebook and Instagram ads to reach new customers, many of these companies are struggling to stay afloat amidst this new change.

Companies are now seeing their customer acquisition cost triple, and are pulling back on their ad spending by roughly half, shifting from TikTok to email marketing. Some companies have seen their ad prices jump 45%, others’ cost-per-click on Facebook ads increased 90% over the last 6 months. This change is hurting hundreds of companies. Specifically, small businesses who are more dependent on digital advertising to grow.

Though hundreds of advertising companies have voiced their displeasure with the newest change, Facebook is the loudest criticizer saying “Apple’s policy is benefiting their bottom line at the expense of businesses who rely on personalized ads to reach customers and grow their operations”.

Facebook, the collector of Big data for millions of companies, is having difficulty giving marketers detailed information about how well their ads are working. Just recently, they announced a $10 billion revenue hit this year on account of Apple’s new IOS privacy change.

With the number of marketers and companies relying on Facebook’s extremely detailed consumer data, one can only wonder: what’s next for advertisers?

Luli Marini, Account Associate

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