major iPhone update = major shift for advertising?

Alison Hrevnack
September 14, 2020

Do you ever look up something online and then find an ad for it next time you scroll through Facebook? It’s no coincidence. Apps like Facebook and Google thrive on tracking users for target advertising.

So, how does Facebook do it? Multiple apps including Facebook have access to your phone’s IDFA, or ID for Advertisers. This allows Facebook and other advertising businesses to place targeted ads on others apps.

Facebook’s ability to track user activity and tie it into other platforms has been a huge aspect of their advertising strategy. Facebook considered this to be an incredible opportunity for marketers and agencies, as they had the ultimate platform for online advertising. In fact, a study found that 52% of consumers were influenced by Facebook when making online and offline purchases. Additionally, in the second quarter of 2016, Facebook had made a whopping $6.4 billion in advertising - 63% more than the previous year.

The Impact of iOS 14

However, with iOS 14 launching soon, iPhone users will be given the option to allow or forbid data tracking. Apple tightening their grip on privacy settings is bad news for apps like Facebook and Google that make money from target advertising. With users having the option to turn off tracking, Facebook developers fear that iOS 14 will tank ad targeting businesses.

While it may not necessarily be detrimental to app developers, it has the potential to make their jobs more difficult. The iOS 14 update means app developers must inform users if their app collects data. With the iOS 14 update, the IDFA is rendered practically useless, as users are given the choice to reject apps like Facebook, Instagram, Messenger, and more from collecting the IDFA.

Since advertisers have less access to user data, the ads that users see may be less relevant. Simply put, the limited ability to effectively target ads means less money.

Are You Ready for the Update?

While there’s no guarantee that all iPhone users will update their phones as soon as iOS 14 is available, the switch to it is inevitable. iOS 13 launched in September of 2019, and as of January, it was installed on 77% of iPhones that were released within the last four years. By June, iOS 13 was installed on 92% of iPhones released in the last four years. With those numbers escalating in a relatively short period of time, advertisers need to be in the know about what to expect when the update launches and how to navigate it.

Since iOS 14 hasn’t launched yet, there are still too many unknowns about truly how much this will affect advertising. But at Giovatto, we are already researching the potential outcomes from the update and learning how we can continue providing optimal results for our clients. In the meantime, we offer targeted ad programs that are tailored to your company’s brand as well as user interests.

Contact Giovatto today for successful advertising - regardless of the evolving digital age.