Facebook is starting to feel the effects of the privacy changes Apple implemented with its iOS 14.5 operating system, admitting in a blog post Wednesday that it has been underreporting iOS web conversions and cautioning that it expects the iOS updates to have a greater impact on its third-quarter earnings than they did on the second quarter of 2021.
Vice president of product marketing Graham Mudd said in the blog post that Facebook estimates that in aggregate, it has been underreporting iOS web conversions by approximately 15%; with individual advertisers falling into a broad range.
Mudd said the company believes real-world conversions, such as application installs and sales, are higher than what is being reported to advertisers, writing, “We’ve heard from many of you that the impact on your advertising investment has been greater than you expected. The cost of achieving your business outcome may have increased and it’s also gotten harder to measure your campaigns on our platform.”
He also addressed the importance of the fourth quarter and the holiday shopping season for advertisers on its platform.
“We understand that the last quarter of the year is a busy and important time for you and your business,” he wrote. “This year in particular, you’re trying to execute marketing plans while navigating a sea of platform and privacy changes across the entire online advertising industry. We’re here to help you understand these changes and optimize performance in this new environment.”
Mudd provided an update on PET, the privacy enhancing technologies Facebook initially discussed in August to help advertisers continue to provide personalized experiences on its platform despite Apple’s iOS updates and similar upcoming changes from Google.
He wrote, “We’re focused on improving campaign performance by adapting in the areas of targeting, optimization, delivery and measurement, even with the increased limitations facing our industry,” and shared examples including:
- Dedicating time and resources to improve the accuracy of Facebook’s conversion reporting, including by expanding modeling capabilities in its default attribution setting of seven-day click and adding improvements to its one-day click option, as well as expanding modeled reporting for website purchases conversion value.
- Investing to address known reporting gaps prior to the holiday shopping season, such as enabling view-through attribution for app events via SKAdNetwork in iOS and making view-through attribution the default for web events.
- Rolling out capabilities for advertisers to track web conversions even in cases where they do not own the top-level website, such as marketplaces where multiple small businesses sell goods under the same web domain.
- Extending the ability to measure in-app conversions that cannot be tracked by SKAN by enabling measurement in apps that have already been installed.
- Reacting promptly after bugs are discovered, with Mudd writing, “We recently fixed a bug introduced by a change in SKAN that resulted in underreporting of approximately 10% and shared this with our advertisers. We expect the changes we’ve made will correct this issue and believe that reporting will improve.”
He added, “We are confident that the actions above will continue to provide even more value to you over time. Our top priority is making sure that you’re able to reach current and new customers, drive your marketing objectives and measure the performance of your advertising campaigns while helping you honor customers’ choices around privacy.”
Mudd also shared a list of recommended actions for advertisers:
- Consider waiting a minimum of 72 hours, or the full length of the optimization window selected, before evaluating performance for conversion-optimized campaigns in order to get the most accurate picture.
- Analyze reporting at the campaign level, rather than the ad set or ad level.
- Set up the conversions API (application-programming interface), which will help optimize ad campaigns, lower costs per action and more accurate measure outcomes.
- Configure web events using aggregated event measurement, choosing the web events most aligned with core business outcomes.
- Follow learning phase best practices to help Facebook’s delivery system learn the best way to deliver ads.
- Consider all available measurement solutions, on and off Facebook.
- Continue to test new creative and marketing strategies.
Mudd concluded, “Over the coming months, we’ll continue to introduce new tools to further help with delivery effectiveness and measurement. As we learn and adapt right alongside you, we’re committed to sharing what we are building in real time.”