If you’re a Facebook marketer, there’s a high chance you’ve experienced the effects of the iOS 14 update.

This update has caused lower conversions, higher CPC, and unstable performances for many online business owners. The panic it has caused within the digital marketing community is completely understandable.

So, it’s important to understand what this update actually is and how to combat its effects.

In this article, I’ll discuss:

• What the iOS 14 and 14.5 updates are
• How these updates will impact your Facebook ads
• The effect these updates have on dropshipping and eCommerce businesses
• How to remain profitable after the Apple update
• New marketing strategies to implement right now

Let’s get started.

What is the Apple iOS 14 Update

The iOS 14 update was released on April 26, 2021 with one goal in mind: To give iOS users more privacy.

ATT, or AppTrackingTransparency, was the main thing Apple implemented with this update.

With the iOS 14 update, users are now given the option for apps to track their activity and data. As seen above, a pop-up appears with the ability to select “Allow” or “Ask App Not to Track“.

Before this update, iOS users were always tracked with a unique IDFA, or Identifier for Advertisers. Every iPhone has an IDFA that tracks activity and data between applications.

What is an IDFA?

Let’s walk through an example to see how the IDFA works.

For example, let’s say you were browsing for a new pillow on the Amazon app. You view a few different pillows but ultimately decide to not purchase one. Next, you open up Instagram and you start seeing pillow advertisements on your news feed. The reason you see these pillow advertisements is because the two apps shared info using the IDFA.

Because of the iOS 14 and 14.5 updates, the IDFA isn’t automatically shared. If iPhone users want data to be shared, they have to select the “Allow” option.

This update has threatened Facebook because they rely on this data to deliver optimal ads.

With this being said, let’s discuss the giant privacy war that’s going on between Facebook and Apple.

Apple vs Facebook: The Great Privacy War

Apple has always been strong on privacy. In a 2010 interview with Steve Jobs, he emphasized the importance of privacy and giving their users the option to opt out of being tracked.

Also, Apple’s Senior Vice President, Craig Federighi, further emphasized the importance of user privacy.

In a 2021 interview with the Wall Street Journal, he said “we thought it was the right thing” in regards to the iOS 14 update and AppTrackingTransparency.

While this is great news for iPhone and iOS users, this is horrible news for Facebook as a company.

Facebook’s business model in terms of how they make money is through advertising. They generate the majority of their revenue by allowing advertisers to market on their platform. As such, Facebook’s entire business model is affected by the iOS 14 update.

This was Facebook’s response to Apple’s update:

“While Apple claims this update is about privacy, it’s about forcing small businesses and developers to charge for apps that were once free, hurting consumers in the process. Free, ad supported services have been essential to the growth and vitality of the internet, and we’re joining others to point out Apple’s hypocrisy and anti-competitive behavior”.

Facebook Spokeman

Facebook proclaims that small businesses that advertise using Facebook will now suffer due to the iOS update. Furthermore, Facebook estimates that small businesses could see up to 60% decreases in revenue because of the update.

While this is a valid criticism of the update, Apple’s reasoning for maintaining user privacy is also valid.

So, we don’t believe Apple is in the wrong for the ATT update and Facebook isn’t wrong for criticizing Apple.

The Online Community Has Had Enough of Facebook

However, the online community heavily believes this has drastic implications on Facebook’s business model.

Here’s a comment I found about the situation that seems to be widely accepted:

It seems like people are angered by Facebook’s continued tracking of their data and privacy. They are also happy at being able to opt-out of being tracked.

Facebook CFO, Dave Wehner, discussed that the iOS 14 update will have a significant impact on Facebook’s future growth and earnings potential.

The reason being Facebook expects high opt-out rates.

Furthermore, in a January 2021 interview, Mark Zuckerberg states “that we increasingly see Apple as one of our biggest competitors“.

Although Apple is primarily a hardware company, they are investing heavily into growing their services and software.

Apple’s iMessage competes directly with Facebook’s Messenger and WhatsApp.

It will be interesting to see how Facebook navigates past the iOS 14 update to give their advertisers more confidence when using their platform.

As of June 30th, 2021 Facebook is testing in-feed notifications on Facebook and Instagram to let users know that they can receive more personalized ads if they opt-in to being tracked.

What Exactly is Facebook Tracking?

Next, let’s discuss what Facebook is actually tracking when users are on their applications.

I think you’ll be surprised at how much information the IDFA is able to receive.

For Facebook, Instagram, and WhatsApp users, Facebook is extracting:

• Physical address
• Email address
• Name
• Phone number
• User ID
• Device ID
• Purchase history
• Financial information
• Location
• Contacts
• Photos/videos
• Gameplay content
• Search history
• Browsing data
• Product interaction
• and more

As you can see, Facebook is taking enormous amounts of data from its users. All of this data makes their advertising platform more effective.

Without this data, Facebook advertisers have a difficult time optimizing their ads properly.

So, let’s discuss exactly how the iOS 14 update affects Facebook ads.

How does the iOS 14 Update Impact Facebook Ads

Nearly every feature that the Facebook ads platform offers is affected by the iOS update.

We have to assume that the majority of iOS 14 users are going to opt out of being tracked. Most people have no idea what the benefits of personalized ads are. Instead, they care much more about their data and privacy.

So, when given the option of keeping their information private, they will choose to do so most of the time.

Let’s go through each affected Facebook ad feature one by one:

1) Data Tracking & Reporting

The biggest challenge we’ve encountered with the iOS update is getting accurate reporting. Often times we’ll receive a sale on our Shopify dropshipping store, but fail to see the conversion on our Facebook ads reporting.

This heavily impacts key metrics like return on ad spend (ROAs) and cost per purchase (CPP).

If these metrics and many more aren’t showing accurately, we can’t see the true performance of our ad campaigns. So, when we are running big campaigns, we’ll often be “blind” and have to use our best guess when determining which ad sets and campaigns are performing well.

Furthermore, Facebook even stated that real-time reporting isn’t available for any conversions from devices running iOS 14 and 14.5.

They go on to elaborate that there are reporting delays of up to 3 days.

So, the overall ability to monitor and optimize your ads is impacted.

2) Interest Targeting

Secondly, interest targeting is affected.

Because iOS users are opting out of being tracked, Facebook has less overall data to work with.

Interest targeting will be less precise and have smaller audiences.

For this reason, it’s important to use broad audiences and let the Facebook algorithm optimize to the best of its ability.

Let’s walk through an example to show how the iOS 14 update impacts Facebook targeting.

For example, let’s say you owned a running apparel store. Before, Facebook could track iPhone users who used a running app on the app store. Now, as the business owner, you could target people who enjoy running based on the fact that they used a running app. However, since iPhone users will now be keeping their data private, business owners will have a harder time using interest targeting ads on Facebook.

3) Retargeting

The iOS 14 update also impacts retargeting ad performance.

Since many users are opting out of being tracked, it takes a longer time to collect data and acquire results.

Think about it like this.

If an iOS user chooses for their data to be private, you won’t be able to obtain their IDFA and retarget them.

Depending on how many iOS 14 users are visiting your website, your ability to retarget will be heavily impacted.

4) Custom Audiences

Similar to retargeting, Facebook custom audiences will be affected the same way.

The smaller pool of data Facebook advertisers have to work with means their custom audiences will be smaller and not as precise as before.

5) Lookalike Audiences

Since custom audiences are affected, this has a direct impact on Facebook lookalike audiences.

Lookalike audiences are made using custom audiences, so if custom audiences have less data to work with, the LLA won’t be as effective.

How does the iOS 14 Update Impact Dropshipping and Ecommerce

As you can expect, iOS 14 has a direct effect on dropshipping and eCommerce businesses.

With Facebook ad performance affected across the board, it’s now more difficult to run consistently profitable ads.

Although running a profitable online business is more difficult, it’s still possible to do well if you follow our strategies at the end of this guide.

You will have to focus much more on the quality of your ads and making the most of the data you collect.

What To Do Right Now

Facebook suggests two things that you need to do right now within your Facebook ads account:

The first step is to verify your domain in the Facebook ads manager.

So, visit this domain verification guide from Facebook to get started.

You will need to verify your domain using one of the two verification methods:

1. HTML file upload
2. DNS TXT record

Either option is quick and simple.

By verifying your domain, you will have authority over which conversion events are available for your domain.

After verifying your domain, Facebook recommends you set up the 8 preferred web conversion events in your Events Manager.

Check out Facebook’s aggregated event measurement guide for more information.

Facebook Ad Strategies to Combat iOS 14

Finally, it’s time to discuss the new Facebook ads strategies we’ve found.

Luckily for you, we’ve been running ads for a few months since the update.

Although we did lose some money at first testing new strategies, we’re now able to find stable and profitable performances across all our ad accounts.

I’ll walk through exactly what we’re doing so that you can find success too.

1) Create Competitive Ads

The overall list of people that Facebook can accurately target is smaller now so it’s getting much more competitive.

As such, the overall pool of Facebook marketers is still the same or even larger and the amount of being that can be targeted is smaller.

Higher competition brings higher ad costs, CPM’s, and lower performances.

So, the only way to succeed in a competitive environment is to rise above the competition.

The best way to do this is by creating better ads.

Video Ads

If you haven’t tested video ads before, it’s time to try them out.

We’ve noticed that at scale, video ads perform better than image ads. Furthermore, video ads have a higher chance of going viral if made well.

Check out our Facebook video ads guide if you want to learn how to create amazing video ads.

On top of the video itself, the other parts of the overall advertisement need to be top-notch.

For instance, the video thumbnail and headline that goes above the video need to be attention-getting. The overall goal is to grab the user’s attention and get them interested in what you’re selling.

It may take some testing and several tries to find profitable video advertisements. However, once you find one, you can keep using it until it’s saturated and then learn why the video ad performed well to create an even better one.

2) Give Facebook Larger Lists of People to Work With

As we touched on before, the iOS update caused an overall shrinkage in Facebook audiences.

Because of this, Facebook has less data to work with. Since the Facebook ads platform is essentially a machine learning algorithm, less data means it will have a more difficult time optimizing your ads.

In the end, Facebook will have trouble finding the best people to deliver your ads to.

For this reason, it’s important to give Facebook larger lists of people to work with.

On top of larger lists, the lists also have to have high-quality data.

Lookalike Audiences

To create these high-impact audiences, we recommend creating these custom audiences:

• Purchasers
• Emails
• Add to cart
• Website visitors
• Facebook page engagement

This list is sorted by highest quality data to lowest quality data.

Your previous buyers/customers will be the best data to use since people like them will be the ideal group to deliver your ads to.

After you’ve created a custom audience of buyers, it’s time to create a lookalike audience.

In the past, we’ve normally created 0-3% lookalike audiences as they were the most pinpoint.

However, because of the iOS update, we’re now finding success when using broader 5-10% lookalike audiences.

We also highly recommend you use smaller budgets and test out each of these audiences. With Facebook’s unpredictability, you never know which audience will deliver the most profitable results.

Check out our Facebook CBO ads guide for our full Facebook ads testing and scaling strategy.

Interest Targeting

If your lookalike ads are struggling or you don’t have enough data to create them yet, then you’ll have to start with interest targeting.

Interest targeting is when you target specific interests related to your store’s niche.

For example, if you had a store selling running shoes, you could target runners, athletes, marathoners, etc.

So, since audience sizes shrank across the board, it’s now important to target broad interests.

These audience sizes are usually 1-50+ million people.

By targeting larger audiences, you allow the Facebook algorithm to take over and automatically work to find the highest potential customers.

Retargeting

For retargeting ads, we recommend using a 1 to 7-day window instead of 30 to 180.

We also recommend using your email and buyer lists when retargeting. Since users are choosing not to be tracked, you’ll have fewer people to actually retarget.

So, by using your previous customers and email lists, you’ll have a warm audience of people that were already interested in your store.

3) Monitoring Performance

Since reporting and tracking are potentially inaccurate, it’s important to track sales to the best of your ability.

So, we recommend closely monitoring backend sales on your Shopify dashboard. There’s a possibility that users are converting and purchasing products from your store, but aren’t being tracked because of iOS 14.

4) Scaling Rules

If your campaigns are profitable and you’re ready to scale, here’s what we recommend:

• Duplicate winning ad sets 5x in the same campaign
• Duplicate the campaign and don’t actually change anything
• Increase usual budgets by 20-50%

Now It’s Your Turn

The iOS 14 update shouldn’t be able to stop you from pursuing your goals. Although running Facebook ads is harder now, there will always be a way to persevere.

Furthermore, Facebook definitely understands the effect that iOS 14 has on advertisers and is doing everything they can to help.

So, I fully expect Facebook to be able to find a solution within the next couple of months.

However, if you follow the tips we outline in this iOS 14.5 guide, you’ll be able to get a head start over your competitors.

Remember to focus on the quality of your ads and audiences. You will also have to monitor your ad performance more closely.

Lastly, we’ll keep you updated as soon and Facebook releases new information in regards to iOS 14 and 14.5.

Let us know in the comment section below your thoughts on this situation and if it’s affecting your advertising. Furthermore, let us know any other tips and tricks you’ve found that have helped you.