Updated: Jan 5
It looks like the year 2020 has something in store for everyone, including Facebook, and unfortunately, it is not for the best. The early effects of the CCPA roll-out have already wreaked havoc for Facebook ad buyers. To make it worse, Apple's soon to launch iOS14 involves a new feature that will allow users to improve their security and privacy. Apple's decision to double down apps that track users across iOS14 has Facebook worried, particularly for its advertising services.
Read on to learn how Facebook advertising is affected by these unraveling developments:
Facebook Advertising Hit Hard: Apple iOS14 & CCPA in July
After being publicized in 2018, the CCPA -California Consumer Privacy Act - has abruptly rolled out and has left confusion in its wake. Facebook ad buyers struggled to cope with the vaporizing of targeting and data for California audiences, while simultaneously scratching their heads over what compliance essentially means and stands for.
What is the CCPA?
For people who don't know what CCPA is: It is a state-level privacy enactment. It is slightly in the spirit of GDPR; conversely, while GDPR is 'opt-in' for information sharing, CCPA is 'opt-out.' The CCPA only applies to California for now, but it is anticipated that other states will also adopt some form of privacy measure into their law in the future.
Some fundamental rules of the CCPA are:
- The collected information must be transparent and clearly show what data has been gathered, its purpose, and any third parties it might be shared with.
- All organizations must delete the data if the user requests it.
- Customers can opt-out of their data being sold.
- Californian authorities have the power to levy a penalty for violations, although it is ambiguous how it applies to out-of-state organizations as it is only a CA law.
- Firms are permitted to offer financial incentives for permission to collect data.
The CCPA does not apply to all organizations. It applies to:
- Firms that have gross annual revenue of over $25 million
- Possess more than 50,000 user's worth of personal information
- Firms that earn gross annual revenue of over $12.5 million by selling this information.
How CCPA Affects Facebook Advertising?
As if the CCPA compliance wasn't vague enough about what's required from varying types of businesses – specifically when data-sharing relationships exist, for instance, like the one between Facebook and its advertisers.
This week a new development has been introduced by Facebook in response to the CCPA; a new feature, namely, Limited Data Use (LDU) has been announced, and as of July 1, it has automatically been enabled for all Facebook business accounts with the aim to limit 'personal information.'
The LDU limits how user data and information can be processed and stored in the Facebook ecosystem for all users Facebook identifies as Californian residents.
This ultimately makes the advertiser responsible for complying with CCPA, and considering its existing-vagueness, this new feature is not a small thing for an already perplexed crowd.
The LDU will stay active till July 31, after which Facebook demands businesses to update Facebook pixels to encompass an LDU parameter, which is not a part of it by default.
Effects of Facebook CCPA Compliance on Digital Marketing
The consequences of CCPA compliance on Facebook are not clear yet, but we are certain that Facebook will be restricting how business platforms use personal information to unify user identities. As a result, we expect to see the following changes in Facebook advertising:
Audience tracking and customer behavior tracking will become more challenging for digital marketers.
We expect the changes to lead to a performance decline on the platform as it'll influence offline conversion tracking, the efficacy of advanced customer matching, and retargeting of Californian residents.
Another immediate and significant effect will be on retargeting.
An enabled Facebook LDU means that your business can't include users in a behavioral retargeting campaign. For instance, if 100 percent of your customers are California residents, you'll have 0 users in your audience pool once the LDU is enabled. Since Facebook has automatically activated this feature, all this is already happening right now.
How Apple iOS14 Will Affect Facebook Advertising?
It was already evident that Facebook was concerned about the soon-to-be-launched iOS14 as Apple's previous operating system, iOS13, had hit platforms like Google and Facebook really hard. But one particular aspect of the iOS14 will make it worse for Facebook and its advertising customers i.e.; it will allow users to disable tracking between apps.
With the iOS14, Apple requires users to actively opt-in to ad tracking.
Before being tracked, the users will receive a notification that says, 'X would like permission to track you across apps and websites owned by other companies. Your data will be used to deliver personalized ads to you.'
Users will be given an option to choose between 'Allow Tracking' or 'Ask App Not To Track'
Yay for the Users, Nay for the Advertisers!
Although, this feature provides excellent benefits to the users, such as more privacy and transparency. On the other hand, the impact could be disastrous for apps like Facebook, as it can hurt the social platforms' ability to target ads to users.
Apple had already doubled down tracking in its iOS13, and it continues to differentiate itself as the brand that really cares about the privacy of its customers. The phrase 'What happens on your iPhone, stays on your iPhone,' coined by Apple's marketing team last year, is indeed still very relevant to its strategy today.
What Happens Next?
As a Facebook advertiser, we understand that you might still have a lot of questions regarding the reach of the CCPA and wonder if it applies to you. Nevertheless, until the authorities provide more clarity, we suggest that you take short-term measures and update your Facebook pixel accordingly to protect your advertising spend.
On the other hand, as far as Apple's iOS14 is concerned, we all know that Apple can afford to hurt advertisers as its revenue model is not funded by ads, unlike Google and Facebook. Moreover, we believe that this change could become more widespread because once Apple showcases a specific new feature, other brands usually tend to follow suit and echo their movements. Thus, we might witness other organizations, significantly reducing their data tracking or will at least offer an opt-in function. This will thus improve their best practices such as on advertising.
We also have a Facebook Group called Facebook Ads for Beginners. Join today to become a part of a group dedicated to creating Facebook Ads.
Facebook Advertising for Beginners
Pendragon founder, Jessica Ainsworth, has written a book to help out businesses struggling with their Facebook Advertising. Look for The Beginner's Guide to Facebook Advertising: How to create effective ads, generate leads and increase your ROI on Amazon, Barnes and Noble, and most other major retailers officially on September 13th!