On December 16, 2020 Facebook published ads in The New York Times, The Wall Street Journal, and other national newspapers, proclaiming Apple’s upcoming changes to their privacy policy would be “devastating for small businesses.”
We provided our analysis of Apple’s upcoming privacy policy in a recent blog, 7 Ways Apple Will Transform Mobile Advertising. However, the biggest change in 2021 mobile advertising will be felt by Facebook advertisers. Here are the top 8 questions ecommerce advertisers should ask right now to steer their Facebook strategy in 2021.
- What ads perform best within a shorter attribution window? On January 19th, Facebook shortened their attribution window options to the following: 1-day click, 7-day click, 1-day click + 1-day view, or 7-day click + 1-day view, ending the era of the Facebook 28-day attribution window. While ecommerce brands are often already optimizing to 7-day or 1-day click, take a look at your past performance under whichever window you plan to use moving forward. Run the best audiences, images, videos, and landing pages based on that Facebook window.
- What are my brand’s top audiences? Are your top Facebook audiences based on Facebook pixel data? If so, launch audiences based on customer email lists or other third-party tracking systems to start gathering performance against these targets. Facebook audience data will likely be more limited when Apple’s privacy changes take effect.
- How many pixel events do I currently have? Prepare to operate a maximum of 8 pixel events per domain. Apple is going to cap the amount of data flowing back to Facebook, which means less granular event data for the Facebook pixel. While this will impact app advertising the most, ecommerce advertising should prepare for the fact that their pixel events will also be limited.
- How am I currently using Facebook campaign budget optimization? Diversification of campaign types in the Facebook Ads platform will be crucial in 2021. Campaign budget optimization (CBO) is a powerful tool for scaling and growth, but ad set level budgets can enable more control over budget allocation. This is especially true if audience sizes vary within the campaign. Ensure your brand is running both types of Facebook campaigns prior to the switch. Since CBO is highly algorithmic, large changes to the Facebook algorithm will hit CBO campaigns the hardest.
- What is going to happen to CPMs? If 30-50% of people choose not to be tracked and advertising budgets remain the same, expect CPMs to spike shortly after the privacy changes take effect. What’s more, the Facebook algorithm has no way to predict which people will opt out. Look back at July 2020 when Facebook implemented the CCPA opt-out in California across all advertisers. Not only were California Facebook audiences smaller, but Facebook’s algorithm was struggling. Its programmatic backbone seemed to have been sprained. We should expect the same conditions after the Apple change, but the impact will likely be bigger.
- How should I prepare for higher competition? Creative testing is key to scaling on Facebook. When the Apple privacy policy goes into effect, this will be even more crucial. Brands should aim to skew testing and messaging to audiences who do not mind being tracked on Facebook. One possibility could be to lean into themes of personalization and customization messaging. Facebook ads that are relevant perform best, and this could be a clever way to be relevant to people who have opted-in to more personalized ads.
- Should I continue to test landing pages? Absolutely, brands should continue to test Facebook landing pages. Landing page experiences can be the most important part of paid marketing. Ensure your landing page testing plan is in place prior to the change. You may need to retest your top landing pages and funnels after the Apple policy goes into effect. Be mindful that tests could take longer than the typical 3 days to reach statistical significance, since Apple will place a 2-3 day delay on conversion data. Tests should run for 1-2 weeks after the policy takes effect.
- What other channels should I test? Studies have shown that people are more likely to purchase on Facebook vs. other channels. Facebook is about to lose much of its personalized data tracking, which could in the short term impact its effectiveness. Where else should ecommerce brands test to hit their goals? If you haven’t already, be sure to test Pinterest ads, as well as other more emerging social channels like YouTube and Tik Tok. These channels will be subject to the same issues as Facebook, but their algorithms aren’t going to take as much of a hit in the short term.
Facebook advertising is going to face many challenges in 2021 due to Apple’s changes. But, one could argue that this is a short-term challenge for a platform that has mastered growth via digital advertising unlike anyone else. In 2020, Facebook U.S. ad revenue was expected to hit $31.4 billion. That’s a 4.9% increase in one year. And, that’s a 48% increase from only 5 years ago. 2021 could be a rocky year for Facebook advertisers, but growth is likely on the horizon. We shouldn’t count Facebook out, given its proven ability to master impressive growth.
