iOS14.5 Update: Six Months Later

In the world of e-commerce, pixel-based retargeting has been, in some capacity, a critical tactic for almost all advertisers on Facebook. Now that users can opt out of tracking, remarketing audiences have shrunk significantly. Because audience size is also tied to prospecting efforts, budgets, seasonality, and more, measuring the exact decline in audience size is challenging. To combat this, Facebook has introduced their own solution: Conversions API, which is a server-based system for sharing data between e-commerce sites and Facebook. Backbone has found that implementing Conversions API has helped alleviate some of the signal loss, although the impact on stabilizing Facebook performance has been unclear to date.

Another impact of the iOS14 updates has been advertisers’ ability to optimize campaigns around specific events. One of the requirements from Facebook is the need for businesses to prioritize their top eight conversion events. For most e-commerce clients, events are organized in a reverse funnel order (purchase, add-to-cart, initiate checkout, view content, landing page view, etc.). This has made it more challenging for us to optimize around lower-priority events like landing page views or view content. Our recommendation to all clients is to closely assess optimization settings, with the consideration that some strategies that worked before the update (optimizing for landing page view vs. traffic, for example) may need to shift based on available data and campaign performance. For clients with smaller budgets, this is particularly important as it relates to attaining enough events to get out of the “learning phase” and allowing the algorithm to work at maximum capacity.

Perhaps the most talked-about impact of the iOS14.5 update has been the impact on reporting and performance. There’s no doubt that we’ve seen a sporadic six  months in terms of Facebook results for clients. Not only are results delayed by three days, but results are also now estimated/modeled by Facebook, “unless the campaign is composed of a single ad set and ad.”1 Many reporting elements that used to be standard (conversions by gender, page views by device, etc.) are no longer supported. And the attribution window is much tighter now; one-day view, seven-click window, set as default across the board.

More broadly, the changes discussed above with regards to targeting and decreased audience sizes have had their own (though hard to isolate) impact on performance. We have seen Facebook platform costs (CPM, CPC, CPA) rise in the last six months for clients and are confident iOS14 has played a role in this trend. To illustrate this further, as Facebook has experienced an average decrease of 3 million daily users in the U.S. compared to 2020 (198 million compared to 195 million), they are also reporting a 36% increase in advertising revenue ($13.7 billion compared to $9.2 billion).2 These supply and demand dynamics are resulting in brutal platform competition for advertisers which will likely produce record-high advertising costs throughout the fourth quarter of 2021.