In early spring, or whenever you stop putting off your update just one more day, Apple will roll out a new update of its mobile operating system iOS14. Of course, we’ll hear groans about how the old one was better and how Steve Jobs is killing your battery life from beyond the grave, but iOS 14 has one nasty trick that will throw advertisers for a loop—especially in the homebuilding industry.

Apple announced back in June that their new mobile operating system would be loaded with features centered around user experience and security. The security portion of the update is what could impact Facebook and Google ads negatively for builders.

What We Know

Apple is launching AppTrackingTransparency or ATT. In short, apps like Facebook, Google and Instagram will be forced to show users a prompt—allowing them to opt-out of a personalized experience. The consensus among the marketing industry (and no doubt, Facebook) is that users are inherently skeptical of big tech’s usage of their data, so the majority of users will choose to opt-out. 

(Source: Apple)

In an update on February 1, Facebook announced that it will show its own prompt, detailing how it uses users’ information.

“...we disagree with Apple’s approach but will be showing their prompt to ensure stability for the businesses and people who use our services. Apple’s new prompt suggests there is a tradeoff between personalized advertising and privacy; when in fact, we can and do provide both. The Apple prompt also provides no context about the benefits of personalized ads”

How It Works

Facebook utilizes a very important tracking cookie called the Facebook Pixel—a simple piece of code installed on your website. As you drive users to your website, from Facebook and other sources, the Pixel sends important data back to Facebook.

For years, advertisers have been using this important piece of technology to make their ads more effective and to connect Facebook with the rest of your marketing infrastructure. This is the main part that users can opt-out of with ATT. 

Like most builders in the industry—and agencies around the world—we run conversion campaigns. We tell Facebook Pixel to claim a conversion every time someone clicks “submit” on a contact request form. The iOS change doesn’t affect that portion. A conversion not only gives marketers and builders a cost per lead by attributing it to your Facebook campaign, but it also provides every accessible data point about the user. Facebook collects this data and uses it to make our ads smarter.

Since Facebook implemented the special category for housing and real estate, we haven’t been able to target based on income, age, family status and other demographics most consumer product companies use to their advantage. This has forced us to rely on that previously mentioned data being sent back to Facebook, and Facebook using said data to hone in on users that are more likely to convert on our website. If users opt-out of ATT, this data will not be allowed to be sent back to Facebook, preventing the platform (and the marketers who use it) from optimizing its targeting.

The actual reporting of conversions and cost per lead, among other CPA (cost per actions) also won't change. We're just at risk of losing our targeting.

What We Don’t Know

We don’t really know how this is going to affect advertising for homebuilders. We know Facebook is upset about this change—they claim to be sticking up for small businesses, which isn’t untrue. It’s more than likely for these changes to drive revenue down. A hit to the balance sheet is enough reason for innovation, and we do expect Facebook to find a way around this.

We do suspect that our CPA (cost per action) for events taken on the website will go up, especially conversions, as Facebook struggles to optimize the audience for your campaigns. The main question here is how much will these costs go up? Is it 10%? 20%? More? That’s something we won’t know for a little while. Campaigns focusing on traffic or impressions should be relatively unchanged.

What Can We Do?

We can shift our strategy a little bit, but ultimately, we could see an impact from the change. Facebook Lead Ads, while not generally as effective as converting on the website, is a possibility we’re considering to help negate the situation. 

The key here is knowing when a user converts, or takes an action on a website, away from Facebook. If a user converts on Facebook, data is sent back to the campaign for better optimization. 

For now, make sure your domain is verified and you don’t have more than eight events being tracked by your Facebook Pixel. Keep focusing on good, relevant content that your users will enjoy and interact with - we should be okay

If you have any questions about this, the Facebook Pixel or social media advertising in general, we’re always here to help!