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Chances are good that by now, you’ve heard about the privacy changes that Apple announced as part of its iOS 14.5 rollout.

Apple’s recent announcement is changing the game when it comes to user privacy and allowing people to choose to opt out of app tracking. This means that when someone accesses apps, such as Facebook, on their mobile device, they now have the ability to ask the app not to track their browsing behaviors.

Here are a few examples of the tracking that Apple will no longer support on its devices:

• Displaying targeted advertisements based on user data that is collected from apps and websites owned by companies outside of the specific app
• Sharing device location data or email lists with data brokers
• Sharing a list of emails, advertising IDs, or other IDs with a third-party advertising network that uses that information to retarget those users in other developers’ apps or to find similar users
• Incorporating a third-party SDK that combines user data from the app with user data from other developers’ apps to target advertising or measure advertising efficiency
  

While these things are considered a win for user privacy rights, it’s going to have a significant impact on businesses that use Facebook advertising to reach new audiences and drive increased conversion rates.

This change has a significant impact on Facebook because it threatens the number one way that the company makes money by selling digital advertising. By limiting the amount of data the app can collect on Apple users, Facebook will no longer be able to serve hyper-personalized content to its customers.

As you might expect, Facebook has taken these new privacy settings personally and has launched several advertising campaigns standing up for their small business customers -- who will see an impact in the way they advertise moving forward.

But it’s not only about the small businesses. There are large enterprise businesses that spend hundreds of thousands of dollars a year on their Facebook advertising strategies. They too will feel the impact of these iOS changes and see a dip in their reporting metrics in the near future.

In this article, we’ll take a closer look at some of the things you can expect to happen in the coming weeks and months to your Facebook advertising strategy due to the new Apple privacy changes.

Here’s a quick look at what we’ll cover:

• How Facebook advertising works
• Why this change will impact you
• The future of Facebook advertising

How Facebook Advertising Works and Why This Change Will Impact You

As mentioned, no matter how big or small your Facebook advertising budget is, this privacy change will have an impact on your digital advertising through the platform. You should care about these upcoming changes from the companies only investing a few hundred dollars into Facebook advertising to those spending hundreds of thousands.

To understand why this change is so important to businesses, you need to have a basic understanding of how Facebook advertising works.

Facebook captures customer data through their mobile devices to learn about who their customers are and then uses this information to create retargeting capabilities and lookalike audiences.

Then, companies like your own purchase advertising through the site in hopes of reaching new audiences and driving sales. You’re essentially buying into borrowing Facebook’s customer insights to drive revenue for your business.

When Apple made the decision to allow iPhone users to deny apps from tracking their off-site experiences, they eliminated the data intake for companies like Facebook, which means that it will no longer have access to mounds of data, which will result in less personalization and less effective digital advertising capabilities for businesses to buy into.

How much of an impact will this change have on you? Well, 96% of social media marketers consider Facebook to be the most effective social media advertising platform. Meaning that if Facebook is one of your most effective channels, it may not stay that way for much longer.

Another important thing to note is that the new iOS 14.5 privacy rollout is now affecting half of the iOS devices worldwide. Nearly three months after the feature’s launch, only 17% of users have opted in to allow businesses to track their behaviors.

That’s a pretty substantial number of users who are currently operating on iOS 14.5 and choosing not to allow app tracking. In fact, businesses are already starting to feel the impact of this change in their current Facebook advertising metrics.

At this point, you’re probably starting to sweat a little and wondering what this all means for you.

Well, the two areas that will have the most significant impact from this change will be ad retargeting capabilities and lookalike audience targeting. Let’s dive into these two topics a bit to help you understand how the new Facebook privacy changes will impact your current digital advertising efforts.

Facebook Ad Retargeting

For many companies, ad retargeting is a big part of their digital advertising strategy. Ad retargeting is the idea of tracking customer behaviors and then strategically placing similar advertisements on other channels -- such as Facebook.

A great example of how retargeting works is by putting an ad in front of a customer who recently browsed your website for a specific product but left without completing a purchase. With the help of a retargeting strategy, you can send them advertisements for that product, or something similar, in an effort to bring them back to your site and complete a purchase.

With Facebook retargeting, you currently have the ability to place a Facebook tracking pixel on our site. That pixel then gives you the data you need to feed to Facebook to create retargeting advertisements. The new privacy changes will only allow you to place eight pixels on a single domain, which will significantly reduce the amount of data you can collect and leverage for retargeting your customers.

So, just how effective can ad retargeting be? It's been shown that retargeting can lead to a 726% increase in site visits over a four week period.

That means you have a huge opportunity with retargeting to bring new and previous customers to your site -- all by understanding their shopping and browsing behaviors.

But, when users start to have the option to block apps from tracking their digital behaviors, this type of advertising will become harder and harder to accomplish.

Without having insights into the pages people are browsing and products they are interested in, your ads will no longer be as effective as they once were. Of course, there are still ways to get your products out there in front of users. It just won’t be as simple as it once was to reach these audiences.

Facebook Lookalike Audience Targeting

Lookalike audience targeting is another essential advertising tool that will be impacted by these new privacy changes taking effect.

According to Facebook, a lookalike audience offers businesses a way to reach new people who are likely to be interested in your products or services based on their similarities to your existing customers. That essentially means it uses current customer data to learn about what other audiences, who don’t already know about your brand, might be interested in and serves ad content based on these interests.

It’s an excellent option for businesses that are looking to expand their brand awareness, grow customer acquisition, and drive new customer sales.

But once Facebook no longer has the ability to capture endless amounts of data on what their app users are doing, this lookalike capability may be more challenging and less effective than it is today.

Many eCommerce-based companies use sites like Shopify to collect customer data such as purchases and browsing behavior to identify new, similar audiences. When this tracking is no longer available, it will be harder to feed this information to Facebook like it once did.

A world without Facebook tracking pixels following users throughout their digital browsing behaviors means that you’ll have to shift the way you’re targeting a new audience. This doesn’t mean there won’t be some form of lookalike audience targeting on Facebook in the future. It just means it will look a little different than what you’re used to today.

The Future of Facebook Advertising

These changes will change how we advertise on Facebook forever.

While the world of Facebook advertising will probably find a new way to stay relevant, We’ll no longer be able to tap into mass amounts of audience data to drive marketing campaigns and reach new audiences.

This shift will result in a few different things happening within the advertising industry. Here are a few things that are likely to happen due to the iOS 14 changes in the near future:

• More businesses will be forced to turn to subscriptions and in-app payments
• Advertising will become less efficient and less effective without the ability to easily retarget audiences and identify lookalike audiences
• You’ll notice fewer website sales from advertisements, especially because you’ll likely lose the ability to incorporate hyper-personalized content
• Limitations for small businesses to continue growing their business and reaching the right audiences
  

All of these things can have an impact on your business, whether it’s a minor inconvenience or significant drop in traffic and revue -- you can expect to see some changes to your metrics in the near future.

Prepare Yourself for The Inevitable Now

So if you’re a business that currently uses Facebook advertising capabilities to reach your customers and attract new audiences, now’s the time to start preparing yourself for the changes to come.

In fact, if you haven’t already started to think through what your strategy will be, you may already be falling behind -- but don’t let that scare you. Not all Apple users have made the switch to iOS 14, meaning you still have time to start to adapt your advertising plans accordingly.

It’s time to look at things like:

• Where the majority of your digital advertising spending is
• What pages on your site do you want to track with the limited Facebook tracking pixels
• How you can pull customer data into your ad targeting capabilities
• What metrics should you be monitoring and setting goals around for future campaigns
  

The next few months will be an interesting ride for businesses that rely heavily on Facebook advertising, and they’ll be tested in new ways. Those that have taken the time to prepare and plan how they’ll adapt to this new marketing environment will be the ones that come out on top.

So what are you waiting for? Get started on figuring out how to adjust your advertising strategy to make the most out of the upcoming privacy changes and keep ads relevant to your audiences.