Over the past few years, we’ve seen growing concerns about consumer privacy and protection online. In early 2021, those concerns came to a head when Apple added another layer of protection in its iOS 14.5 update in the form of its App Tracking Transparency feature.
For the first time, apps were required to get users’ permission before tracking their data across apps or websites owned by other companies—the same data that’s used to personalize advertising for users. By July 2021, only about 17% of users had chosen to opt in.
Now, less than six months later, Apple’s iOS 15 has officially dropped—and the latest version features even more refined security features, including a privacy dashboard and a move to cut down on email tracking.
If you spend money on digital ads, rely on email marketing, or have a mobile app for your business on the Apple Store, here’s what you need to know about how iOS 14 and iOS 15’s privacy changes could be impacting your business.
Here’s what you need to know about iOS 15’s impact on advertising, including email marketing.
Table of contents
- What was Apple’s iOS 14.5 update?
- What new privacy features were added with iOS 15?
- How Apple iOS 15 could impact your business
- How advertising on social channels such as Facebook has been affected by iOS 14.5
- How advertising on mobile apps has been affected by iOS 14.5 if you have your own mobile app
- How your marketing team can respond to the Apple iOS 15 update
- The future of privacy and ecommerce marketing
What was Apple’s iOS 14.5 update?
Before we delve into iOS 15’s privacy changes, here’s a refresher on what happened earlier this year with the introduction of iOS 14.5.
The update for Apple iOS 14.5 was akin to the cookie permission pop-ups that you see on nearly every website these days. It required app developers that share customer information to third parties for marketing or ad monetization purposes to ask iPhone and iPad users for permission to track their data, including across other apps and sites, in order to deliver personalized advertising to those users. Previously, users could have been opted in by default.
In addition to pop-ups, under Settings users could begin to review and make changes to which apps had permission to track their data.
This policy only affected Apple product users, but that’s no small number—about half of the US population owns an iPhone.
The good news? Opt-in rates were not only slightly higher than expected, but shopping apps fared better than other categories (such as social media or gaming apps). They’re amongst the category that users are most likely to opt in for, with some estimates putting the rate at around 43%.
What new privacy features were added with iOS 15?
In June 2021—shortly after Apple’s iOS 14 changes widely came into effect with the release of iOS 14.5—the company announced it would be giving iPhone users even more control over their data.
“Privacy is a fundamental human right,” Craig Federighi, Apple’s Senior Vice President of Software Engineering, said at the company’s annual Worldwide Developers Conference.
Launched in September 2021, iOS 15 is a testament to this belief. Users can now see who their apps are sharing data with and stop marketers from detecting when they open emails, amongst other changes.
The introduction of an app privacy dashboard
Located in the iPhone’s privacy settings, the new App Privacy Report tells users how often apps use permissions to access their location, camera, contacts, or microphone. It also tells users the domains apps are contacting while they’re in use.
The result is that the average user will be able to gain an understanding of how apps are sharing their data and with whom. This particular feature doesn’t directly impact ecommerce merchants (yet). However, it does mean that keen users may use it to evaluate whether they’ll revoke permissions or even delete an app.
Cutting down on email tracking
Another change that’s being made is the introduction of a Mail Privacy Function on Apple’s Mail app (available on iOS 15, iPad OS 15 and macOS Monterey devices). Users will have the option to load remote content privately and keep their IP address private. Email senders will no longer be able to track who opened an email, when, or where.
Paid subscribers to iCloud+ will be able to take this one step further by using the Hide My Email feature. This will allow users to generate a fake email address when they’re using Safari, Mail, or an iCloud email address.
These features aren’t turned on by default, though, and both changes will only affect Apple Mail users. (Those on desktop and Android devices will still be trackable.) This is still a sizable group, however. Apple Mail continues to be the most popular way to read email, with 47% of users reading their email on an iPhone and 13% relying on Apple Mail on their desktop.
How Apple’s iOS 15 could impact your business
While these changes attempt to meet the demands of online shoppers for increased consumer privacy (one recent survey indicates 97% of Americans are somewhat or very concerned about protecting their personal data) what it means for ecommerce merchants is that there will be less data to use in ad targeting.
You’re most likely to be affected by these changes if you:
- Use digital advertising for your business
- Rely on email marketing for your business
- Have your own mobile iOS app that shares information with third parties for ad personalization purposes
Only time will tell the exact impact of these changes, with opt-in rates varying from business to business and category to category. (Using GDPR banners as a proxy, consent rates can vary based on a number of factors: one study cited by TechCrunch indicates that acceptance rates on similar GDPR notices averaged 50.8% on mobile and 26.9% on desktop.)
How advertising on social channels such as Facebook has been affected by iOS 14.5
The iOS 14.5 changes affect all ad platforms that collect data for targeting and measuring ad performance. However, we’ve chosen to focus on Facebook in this article because it’s one of the platforms with the widest reach and the most robust targeting options, meaning that your store likely relies on it for a healthy portion of your online advertising.
If Facebook can’t track users’ activities across apps outside of Facebook, its targeting options will become less effective—if a user has visited your online store, you can no longer retarget them on their iOS social channels, unless they consent. This will likely mean that users will see less relevant ads. It’s also worth noting that you can still retarget users who have liked your Facebook page with Facebook ads, because this data exists in the platform where the ad is running.
This change in Facebook tracking will disproportionately affect certain formats, such as Facebook’s dynamic ads for retargeting, which show specific products to people (based on, for example, items previously abandoned in their online carts). This loss of personalized advertising will make it harder for brands to fill the top of the funnel.
The impact of this will vary for each merchant based on how much of your advertising budget is dedicated to ad platforms such as Facebook, how much traffic digital advertising drives to your site, and how heavily you rely on third-party data to reach new and existing customers. You may also find variance in opt-out rates based on where your customers are typically from—certain nationalities may be more or less likely to opt out of tracking, with those in the US being amongst the world’s most privacy-sensitive.
The problem isn’t just in the loss of personalized ads—it’s that generic advertising may actually do a disservice to your brand: 90% of consumers say that messages from companies that aren’t personally relevant to them are “annoying.”
How advertising will be affected if you have your own mobile app
Apple now requires app developers to ask iPhone and iPad users for permission to track their data.
If your store has its own mobile app and users choose to opt out, Apple’s policies don’t permit you to run ad campaigns based on your users’ in-app behaviors on digital ad platforms, such as retargeting ads on Facebook. Only if users opt in for both your app and the social platform will you be permitted to run targeted advertising campaigns on third-party platforms based on actions they take in your app.
How email marketing will be affected by iOS 15
Apple’s new Mail privacy protection feature is the one most likely to affect ecommerce merchants. Your marketing department will no longer be able to use invisible pixels to collect information about user behavior, such as when a customer opens an email, their IP address or location, or even (if they choose to hide it) their email address.
The consequence is that you’ll no longer be able to reliably track when a user opens an email or geotarget customers.
Since emails sent to Mail users will be opened on an Apple proxy server before being sent to subscribers’ inboxes, this also means that your open rates will likely be inflated. Segmentation will also become increasingly difficult, as will A/B tests, such as those evaluating different subject lines.
How your marketing team can respond to the Apple iOS 15 update
Here are actions you can take to optimize your ad spend overall, and to continue delivering a personalized experience to users who consent to tracking.
If you run digital ads
Facebook has developed a list of changes to its ad optimization and reporting and a recommended set of actions for businesses to consider. The full list of recommendations is available on the Facebook for Business Help Center, and a customized version is available in the Resource Center tab in your Ads Manager, but we’ve listed a couple of key actions below. (See guidelines for advertising on Google and Snapchat directly on their help centers.)
If you deliver Facebook ads optimized for conversion events on your online store:
- You’re limited to the use of eight conversion events per domain for optimization. If you use more than eight events today, you will need to prioritize the top eight in Facebook Business Manager.
- Domains with pixel events shared by multiple Facebook Business Managers need to be verified in the appropriate Business Manager. Domain verification establishes which Business Manager account has the authority to configure and prioritize the eight available conversion events for a given domain. Learn how to verify a domain.
Shopify’s Facebook channel lets you connect and manage your sales and marketing activities on Facebook properties. You can customize the amount of information you share with Facebook once you have all required customer consent, to optimize ad spend for Android, web, and iOS traffic.
If you rely on email marketing
Do your research.
It’s time to dig into your past data. To determine how your email marketing may be affected by the iOS 15 updates, look at what percentage of your audiences uses Apple Mail as an email client. You’ll also want to do an analysis of past campaigns to determine what your audience best responds to. Since A/B tests won’t be as reliable in the future, a good start is to examine what your best-performing subject lines and email campaigns were.
Determine how to best measure success
Now is the time to review your baseline engagement, as well as your segments for open rate metrics. But, as you do so, keep in mind that there are other ways to measure success that aren’t solely focused on open rates.
To prepare for the iOS 15 change, email platform Klavyio recommends “building an engaged subscriber segment that isn’t exclusively based on opens. Instead of open rates, try combining conditions like recency of sign-up, purchase, on-site behavior, and email engagement.”
Other metrics may include unique clicks, form completions, or the time spent on a site. Above all else, don’t freak out.
“If SMS can achieve a 4600% ROI with zero access to open data, I think email is going to be just fine,” pointed out email and SMS strategy expert Stephanie Griffith on Twitter after the changes were announced.
Consider using SMS
See that statistic above about the ROI of SMS marketing? If you’re not already using SMS as a marketing method, now might be the time to add it to your toolkit.
“You might find yourself collecting less email subscribers (and/or less true email addresses) with iOS 15, so it is critical that you are reaching consumers elsewhere,” says ecommerce marketing platform Yotpo.
SMS is a great alternative because of its high open rates (around 98%) and the fact that it still puts privacy first. Consumers have to give their permission to receive texts and all they have to do to opt out is text “STOP.” Yet, as Yotpo points out, “they rarely do—SMS has less than a 5% opt-out rate.”
Focus on building your customer database and improving customer retention
With an increased reliance on using lookalike audiences, now is the time to refocus on building your email subscriber list and customer database. Similarly, customer retention will continue to be one of your strongest strategies for increasing profits, as it results in up to 95% more revenue. Loyalty programs, subscriptions, and personalized email campaigns can all serve this function.
Offer a carrot to opt in
According to a 2020 survey conducted by Pollfish, 38.6% of iOS users would allow themselves to be tracked—but only if there was a virtual reward offered in exchange.
If you have your own mobile app, you may consider encouraging users to opt in with incentives such as access to exclusive items, discounts, free samples, or a loyalty program.
Make sure to speak to an expert about legal and App Store requirements around offering a financial incentive for data collection and sharing for the jurisdiction in which you operate, such as the California Consumer Privacy Act.
Monitor return on ad spend (ROAS) and adjust budget allocation as necessary.
As we’ve outlined above, the impact on advertising will vary widely from one retailer to another based on a range of factors. Now is the time to encourage your marketing team to pay close attention to ROAS and readjusting it as necessary.
Experiment with different ad types and copy
If you’ve been considering testing different ad campaigns—whether that be copy or on new social platforms—there’s no moment like the present. Writing for SEO (including Google Ads) will continue to be important, but remember to write for people, not just bots.
Be clear about your actions and intentions
In a 2018 study conducted at Harvard Business School, researchers found that being honest about targeting practices can lead to more click-throughs and purchases. When shoppers were shown ads with messages like, “Here are items recommended based on your clicks on our site,” they were more likely to be engaged—and ultimately to make purchases—compared to if no message was sent.
“Even the most personalized, perfectly targeted advertisement will flop if the consumer is more focused on the (un)acceptability of how the targeting was done in the first place,” wrote the study’s authors.
The future of privacy and ecommerce marketing
Apple’s latest iOS update is far from the last update to privacy we’ll see in the coming years. While Android phones are still slow to catch up with the privacy features offered by Apple, more features are slowly being introduced, including Android 11’s auto-resetting permissions, which restricts an app’s permissions if it hasn’t been used in several months. And in 2023, Google Chrome—which accounts for more than 46% of the US web browser market—will join Safari and Firefox in blocking third-party cookie data.
Privacy is an ever-changing landscape—and with it, ecommerce marketing will continue to evolve.
“Let’s rewind back to 2018, when we had to deal with the chaos and change of GDPR—that shook the email space—or even CCPA, another large change,” says Francis Baker, Compliance and Deliverability Technical Specialist at Klaviyo. “This industry will constantly change and, as marketers and deliverability folks, we’ll adjust.”