Following Apple's iOS 14 Privacy reveal, Facebook attacked Apple’s changes publicly, claiming the changes will hurt small businesses, and Facebook is speaking up for them. But should we trust Facebook’s claims that this will have a profound effect on businesses? The short answer is yes. However, this does not mean that small businesses do not have other ways to compensate for the potential negative impact.
To quickly go over the introduced changes with iOS 14, going forward every app (e.g. Instagram) will have to ask for permission from an iPhone user whether they can use their data or not. If consent is not given, app developers will not be able to store user’s personal data.
Let’s demonstrate this with an example; you are a dog owner living in Philadelphia. You fire up your Instagram account to get your daily dose of cute puppy pictures. Your iPhone will display a prompt and ask whether you would like to share your personal information, including the city you live in and whether you’re a dog owner or not, with Instagram. You say “no” and continue your Instagram browsing. And let’s assume I am a small business owner operating a dog boarding facility in Philadelphia. And I usually find new customers through Instagram ads. Going forward though, my ad will not appear on your Instagram feed as Instagram will not have this information available. I will end up advertising to a much larger audience, like in more cities or cat owners, wasting a good chunk of my advertising dollars.
Long story short, as a business owner, my ads will become less effective, and my cost per conversion will be higher. Because of this wasted ad spend, Facebook forecasts that my ad costs will be 2.5 times higher. In other words, I will have to spend 2.5 times more on Facebook to acquire the same number of customers as before.
The impact will be real, and this will put a strain on the budget of business owners. The question here is, what else can you do to compensate for higher advertising costs. Are there other ways to create more efficiencies so I don’t have to spend 2.5 times more? Yes, there are. Personalization and hyper-targeting are one way to decrease advertising costs. But you could also create efficiencies by:
And many more tactics. The challenge here is that these tactics require a dedicated team that constantly monitors, analyzes, and makes necessary adjustments. This is why automating these efforts becomes even more important. Sign up on Boostify.ai to see how our AI can help eliminate the tedious tasks and optimize, decrease your ad costs over time.