Apple released iOS 14.5 on Monday. For most iPhone owners, it is a routine update. For businesses that advertise on Facebook, it is the update that places a small pop-up between them and a large share of their targeting.
The pop-up asks a simple question: "This app would like permission to track your activity across other companies' apps and websites." The options are "Allow" or "Ask App Not to Track".
Most users are likely to decline.
What does App Tracking Transparency actually change?
Until this week, every iPhone had an advertising identifier that apps could read by default. Facebook and many other ad companies used it to connect a person's activity in one app with their activity elsewhere. For example, a person looks at dive trips on a booking site and, an hour later, a dive resort ad appears in their Instagram feed. That connection is at the heart of retargeting and of many of the very precise audiences small businesses had grown used to selecting from a menu.
App Tracking Transparency, or ATT, requires apps to ask permission first. If the user declines, the app does not get the identifier and is not allowed to track them through some other indirect means. Apple's developer documentation for App Tracking Transparency sets out the rules in detail.
This change is not a surprise. Apple announced it last June and then postponed it. Facebook strongly opposed it, including through full-page newspaper ads in December stating that the change would hurt small businesses. These efforts did not prevent it from taking effect.
What should you expect from Facebook ads in the coming months?
Our experience with small advertisers, particularly dive operators who invest a few hundred dollars a month in Facebook and Instagram, allows us to anticipate the following effects. Some come from Facebook's own warnings, the rest from our analysis.
Less precise reporting
Conversions from iPhone users who opt out will no longer appear as they did. Some will be recorded late. Others will be modelled, meaning estimated. A booking may arrive in your inbox without Ads Manager clearly attributing it.
Smaller retargeting audiences
People who visited your site on an iPhone and declined tracking become much harder to reach. If your strategy relied entirely on showing an ad to everyone who viewed the prices page, that pool will shrink.
Costs likely to rise
Less data means the algorithm relies more on estimates. Cost per result is likely to increase for many small accounts, and the challenge will be determining whether the ads or the measurement have become less effective. It will probably be a combination of both.
What setup should you complete now?
Facebook has been urging advertisers to prepare for several months, and many small businesses have not acted on those emails. If that applies to you, this week is the time to act.
- Verify your domain in Business Manager. Without this step, you cannot configure your events properly.
- Go into Aggregated Event Measurement and choose your conversion events. You have a maximum of eight per domain, ranked by priority. Put the one that actually generates revenue at the top.
- Look at the Conversions API. It sends events from your server rather than relying only on the pixel in the browser. On WordPress, plugins make implementation considerably simpler.
This setup is not the most appealing task for a kayak rental business, but it takes an afternoon, after which the essentials are in place.
Who owns the relationship with your customers?
This is the main lesson of the change, and it is not technical. For years, many small businesses have entrusted their customer knowledge to Facebook. Facebook knew the audience, and the business selected interests from a dropdown. Now that this knowledge is becoming less precise, the businesses least affected will be those with their own list.
"First-party data" may sound technical. For a small business, it means an email list of past guests who agreed to hear from you, a booking system that keeps a history of visits (who, when and for what service), and a website with properly configured analytics showing which pages people read before they book.
These tools are simple, but they belong to you, and a phone update decided in California cannot switch them off.
Apple is not the only factor. Google says Chrome will stop supporting third-party cookies next year. In Quebec, Bill 64 is progressing through the National Assembly and would tighten the rules on personal information, including for private businesses. All of these developments point in the same direction, and we recommend planning for reduced tracking.
How should you adapt your ads to broader targeting?
By improving the ad itself. When precise targeting is no longer possible, the message has to attract its own audience. This changes how small advertisers should design their ads.
The old method relied on narrow audiences and generic ads: select "scuba diving, 25 to 45, lives in Germany," use a stock photo and let the targeting do the rest. We now recommend broader audiences combined with ads specific enough to hold the right person's attention: a real photo of your boat, a real guide's face, a headline stating exactly who the offer is for and what they will experience.
Facebook is also expected to move in this direction, with more automation that requires fewer settings and relies on better creative. This development is positive: it favours businesses that know their customers and can present their offer authentically, rather than those with the most sophisticated tracking setup.
How can you measure results reliably?
With your own site data. Do not judge your ads solely by the ad platform's dashboard, especially now.
Add UTM parameters to your ad links. Set up goals on your own site in Google Analytics, whether a booking, a contact form or a tap on the phone number. Then compare your analytics with Facebook's figures. They will not match, and they never fully did. However, if both sources point to the same trend, you can rely on it.
Good conversion tracking and analytics is foundational work. It essentially means ensuring the numbers are reliable before increasing ad spending.
The pop-up is only a few days old. We recommend waiting a month before drawing conclusions from the numbers, and using that month to correct your setup.