iOS 14.5, FLoC, and More: How Data Privacy Updates Will Affect eCommerce Businesses

To hear marketers talk the last few months, you’d think Google FLoC and iOS 14.5 is the end to all consumer targeting as we know it.

It’s actually a glimpse into a brighter, more effective marketing future, especially for eCommerce businesses. As long as you’re prepared, that is.

We want to help you get there. That’s why we’re sharing some of our insights and recommendations we’ve gathered from our partnerships with our online retail clients, including:

• Why Google and Apple’s new policies aren’t that shocking
• What these changes involve and how they’ll affect your eCommerce ad campaigns
• And how you can prep your business for a privacy-first future

Why the Change in Data Privacy, and Why Now?

Initiatives protecting customer privacy and data have been limiting advertisers’ data for years, so the new policies from Google and Apple should come as no big surprise. Users have been calling for these improvements for years, and technology companies are implementing their solutions, both beta and permanent.

In 2020, Safari and Firefox led the way for major online browsers by blocking third-party cookies by default. Google, with a goal to remove third-party cookies by 2022, is playing catchup with its recently announced FLoC alternative (more on that later).

Add in recent privacy laws like GDPR and CCPA, and you’ll see these “new” privacy changes aren’t that new after all. They’re just a natural continuation of what we’re already seeing in the digital space — a move away from personalized and individualized advertising.

In short: If you’re not already paying attention, your business is already at a disadvantage.

New Data Privacy Changes Affecting eCommerce Today

Countless data privacy issues will affect eCommerce businesses now and in the near future. For this blog, we’ll focus on the two dominating recent digital marketing talk: Apple’s iOS 14.5 update and Google’s FLoC initiative.

1. Apple’s iOS 14.5 Update

What It Does

Apple’s iOS 14.5 update drastically changes the field for all mobile marketers by requiring permission before tracking a user’s behavior.

Where mobile user tracking was the default for years, if a user downloads a new app on iOS today, that app has to be manually granted permission to track the user’s behavior. Advertisers anticipate the majority of users will opt out of tracking, contributing to a huge loss in audience data.

Essentially, this update signals the end of mobile retargeting for any iOS users (who currently stand at more than a quarter of all mobile users in the world). eCommerce businesses that use Facebook advertising are likely to feel the greatest effect from this data loss — fitting, due to Facebook’s not-so-stellar history with sneaky user tracking.

How It Will Affect You

If you’re running Facebook ad campaigns for your online business, you’ve probably already seen the effects of iOS 14.5’s rollout. If a user opts out of tracking, they won’t be counted in your reports, even if they convert. Your data will be skewed, as you can see in one of our client’s reports below.

Facebook Ads attribution windows will also singularly be 7-Day Click moving forward. If a user opts out of tracking, you’ll only see conversion data for them if your ad sets are optimized for a 1-Day Click window — which, for many eCommerce businesses, is too short to see any results, unless you sell an inexpensive, snap-decision-type product. Instead, you’ll need to rely on your historical reports for accurate campaign forecasting and modeling.

Get ready for your remarketing audiences to shrink, too. The Facebook algorithm won’t optimize your campaigns as well as in the past, and lookalike audiences will perform poorer. Manually optimized campaigns will become king, which means it’s time to flex those creative marketing efforts.

Compelling creative and ad copy will be the key to winning ad auctions and customers, not budget or data. Your brand should start building out your organic and in-platform strategies to create on-point storytelling that addresses your customers’ pain points and motivates them to convert.

Should You Care?

Yes. While the actual effects of this privacy change won’t be felt for another few weeks, you need to readjust your paid social marketing playbook starting now. Start with what you have control over: Make sure your social accounts are verified and that you’re generating unique and compelling content to drive your consumers to convert, even organically.

If you have access to your old conversion and attribution data, you’re already one step ahead. You’ll need to use this data to extrapolate to your future campaigns (the skewed data from the iOS update won’t give you the full picture of your audience conversions). Knowing how your campaigns have performed in the past will help you better plan and analyze your reports.

We recommend paying close attention to your Facebook ads performance over the next few months to see the exact effects for your business.

2. Google’s FLoC Initiative

What It Does

Before we get into the details of Google’s new FLoC privacy initiative, it’s important to recognize that this is a beta test. FLoC is not necessarily the future of user tracking with Google’s browsers, but it is an indication of what to expect when Google finalizes its third-party-cookie phaseout in 2022.

FLoC (short for “Federated Learning of Cohorts”) is Google’s current way of protecting individual privacy while still gathering the data that makes them money. Instead of identifying individuals’ browsing data, Google will now place users in a “cohort” of individuals with similar interests or demographics. Advertisers can then target these cohorts without ever identifying the individuals within them.

How It Will Affect You

Because FLoC is a short-term beta test, we don’t expect it to drastically change marketing strategies for eCommerce businesses anytime soon. However, if FLoC sticks around, larger businesses that rely on display and video ads will take a bigger hit than online retailers who rely on Search and Shopping Ads.

Campaigns that rely on audience targeting — such as Smart Shopping, display, and video ads — will change the most. Instead of placing ads due to user behavior, retailers should get ready for content targeting in line with a chosen cohort’s interests. For example, ads for home improvement products should be deployed to DIY blog posts, rather than following a searcher across the internet.

Remarketing audience size will shrink due to ad blockers, but remarketing will still be important for retail brands, especially as you grow your first-party data lists.

Should You Care?

As mentioned, we don’t anticipate any major changes to pay-per-click (PPC) campaigns just yet — but that doesn’t mean your eCommerce business shouldn’t care. On the contrary, Google’s FLoC is a move in the direction of first-party data, which is the future of online marketing.

While there’s no need to panic about what FLoC means for your online business, there are some lessons to be learned. Although advertisers may receive less data without third-party cookies, the first-party data they do receive from consumers will be more valuable. When consumers have more control over their data, retail brands have more control over targeting, instead of being at the mercy of Google’s automation.

We’ll talk about it a bit more below, but FLoC also shows how crucial first-party data will be to your retail search and shopping campaigns — so now is the time to start gathering what you need.

What Should You Do?

With a little reorientation and manual work, you can easily prep your online store for these eCommerce data privacy changes (and the many more expected to come in the future).

1. Focus on gathering first-party data.

Many digital marketers have become reliant on third-party cookie data, but those cookies are on their deathbed. First-party data is what you’ll need in the future to target and remarket to the right customers for your products.

A few of our suggestions for obtaining a customer’s data (with their permission!):

• Offering a discount for signing up for your email list
• Prompting them to create an account and save their cart before they leave your site
• Prompting them to create an account when they head to checkout
• Progressive profiling form fills
• Prompting them to link their site accounts to their social accounts

Don’t forget proper cookie notifications, too. Make sure your website cookie policy explains why site cookies are beneficial to your visitors; this can boost acceptance rates by users.

2. Build out your customer email lists.

Email lists are a great way to build upon your first-party data and remarket to customers, especially if your paid search campaigns are affected by eCommerce data privacy changes. If you create robust email lists and segment your audiences appropriately, you can extrapolate that data into your other campaigns for better results.

Offering discounts, free shipping, and other promotions is extremely effective in generating eCommerce email marketing list growth. Incorporate email signups into your paid and organic social media campaigns, too.

3. Work with an eCommerce marketing agency.

If your store’s digital marketing campaigns have been running on autopilot for years, you’ll have a much harder time adjusting to these eCommerce data privacy changes. To gather the data you need and reoptimize your existing campaigns, it may be best to hire an experienced eCommerce digital marketing agency.

An agency can evaluate your campaigns, see what’s missing, and pivot your strategies for the best results possible in a first-party-data world. The right one will set you up for success and educate you on the new privacy landscape and its effects on paid search, search engine optimization (SEO), social media marketing, and more.

Bottom Line: Data Privacy is the Future

The trend toward marketing automation brought a lot of advantages to eCommerce businesses — but it’s also made this move to first-party data that much harder for marketers. Yes, these data privacy changes will come with a loss of data, but they also bring a huge opportunity for online retailers to embrace customer privacy and boost their online sales.

Remember: If you’re an online retailer, your website is your storefront. Converting customers is a multi-faceted process, and it’s time for your business to incorporate (or re-incorporate) that into your marketing strategies. If you’re ready to roll up your sleeves and get back to the manual work of gathering data and optimizing your campaigns and accounts, you’re in good shape for the future.

Neil Robertson is a Senior Paid Strategist at Inflow. Based in Denver, Colorado, he oversees strategy, management, and reporting of eCommerce clients’ paid marketing efforts.

Inflow is an eCommerce digital marketing agency offering custom SEO, CRO, and PPC strategies to online retailers across the world.