In the past two weeks, I’ve heard over half a dozen early-stage founders say their growth strategy has been crippled by iOS 14.5+ disarming Meta’s ability to track across apps, lessening the impact of their social media ads. I’m confused every time I hear this — how is this just becoming an issue for new founders with startups less than a couple of years old, and why are founders still relying on social media ads to propel their growth?
How big is the problem?
iOS 14.5 was released to the public in April 2021, and since then, has given users the ability to block cross-app tracking.
Blocking Facebook tracking is not new, however. Mozilla has offered their Facebook Container since 2018, limiting how much cross-site data Facebook can collect from users. Facebook’s response to Mozilla was almost nonexistent, considering less than 2% of people across the world frequently use Firefox. The situation isn’t quite as mild when it comes to iOS.
This blockade of data is pretty extreme when you consider that more than half of smartphone users in the US have iPhones, and 94% of those American users have clicked the “opt-out” button when asked about Facebook tracking by iOS. All signals certainly give cause to hit the big red panic button when it comes to ads working the way they are supposed to. And yet, in 2022, aggregate social media ad revenue grew by more than 20%.
Is there a solution?
Meta has found a loophole to the limitations of IDFA blocking by using an in-app browser that has an ability to track a user’s activity within the app browser. The data from the in-app browser is then collected, and used to provide suggestions based on user interests. In theory, based on the posts you like, profiles you follow, if you buy an advertised product in the in-app browser, and all the other ways you engage with your social media, companies like Meta should have more than enough data to determine your interests and if you’re an easily convertible customer.
The largest point of criticism I see with this method was made by a friend, Kyle Kashuv, on Twitter. He highlighted that Meta’s algorithms for collecting information about user interests and providing suggestions from that data falls short of its competitors. If they were serious about keeping their competitive edge, they would have invested more into better algorithms for content and ad suggestions instead of building a metaverse that consumers seem not to give a hoot about.
So why is the situation bad for founders?
This is the question I don’t understand. Where I think advertisers, and especially founders, have begun overreacting is with Meta’s ability to still target ads based on interest even when cross-tracking is limited. If anything, I think it’s a good thing for sales that ads are becoming more targeted to interest than cross-tracking of random Google searches. We’ve seen repeatedly that consumers have a much higher willingness to spend on items and categories that interest them, so it shouldn’t be a bad thing that Meta can track “wants” better than other things.
What I fundamentally don’t understand, though, is why social media ads are still the big hype.
Why even use social media ads?
This drives me to my next point: a question I constantly ask myself is, “at what point are social media ads too saturated?” Yes, ads are becoming crafted in ways that are more digestible (now called “sponsored content”), but so many people mindlessly scroll through social media. It seems that our ability to scroll past (or quickly tap through) ads has become simple muscle memory. As digital ads have become more prevalent, users have adapted to paying less attention to them. Rather than consuming social media consciously, people have shifted to consume most of their content without engaging critical thought.
So at what point do advertisers and founders embrace that things have changed, that social media ads are becoming increasingly saturated, and that their efficacy seems to be ebbing (I say that anecdotally and would appreciate seeing compelling data that suggests otherwise)? Clicks and engagements do not always translate to conversions or sales, and there has to be a clear shift away from the reliance on social media ads if founders aren’t able to reach their target audiences.
The case for continuing digital ad campaigns does not seem clear to me.
Blaming iOS 14 and Facebook for a lack of growth seems like the easy out to me, especially considering companies still have the ability to target users relatively well. “We hope to have social media ad campaigns and influencer endorsements” sounds to me like a cop-out solution to growth. This may not be the mainstream opinion, but I’d be more impressed with a company that sticker bombs and street teams to reach their audience instead. To me, the height of ad efficacy is in catching your attention in a place where other brands aren’t, and piquing your curiosity.
And if a founder does choose to run with social media ads, they shouldn’t complain about their reach. Even with cross-tracking blocked and Meta’s lackluster algorithm, there are still plenty of tools to reach an engaging audience. If your product is interesting, the conversions will come. The time for excuses is over, there’s been plenty of time to adapt and adjust to the changes.