The Apple iOS14 update is causing quite a stir in the small business space and Facebook is being very vocal about how this change affects small businesses on its Facebook Ad and Instagram Ad Platforms.
In this episode, I cover the effects this change will have on your ad campaigns and what you can do to adapt.
Burhaan Pattel 0:00
Welcome to the marketing stack, my name is Burhaan, I have businesses around the world, targeting message, we're using Facebook ads using the marketing funnel, getting more customers, for their businesses, for the right price, whether it be courses, whether it be coaching programs, whether it be just, you know, physical products, I help my clients acquire their customers, you know, I've scaled myself up over the last six years to, to really hone in on that skill, and help my clients to do that. And so in this, in this episode of the podcast of the marketing stack, I'm going to be talking about how Apple, how the Apple iOS 14 update is gonna affect your ad campaigns, specifically on Facebook, and Google, and any of the other platforms that you're talking about. I focus specifically on Facebook, in this episode, but because Facebook is making the most noise about this update, and I'm going to be sharing a bunch of resources down in the description, if you're checking this out on the website, or on whatever platform you're listening to this, there will be links to different resources. And I'm sure that this information will be updated and may or may not be relevant in the future. But this is an episode to tell you in in late 2020, in December 2020, this update from iOS four, for iOS 14, by Apple, and what Apple is saying about, about advertising and privacy, and privacy of people's information online. So enjoy the episode.
Burhaan Pattel 1:28
The apple update, the iOS 14 update, and how it's gonna affect advertisers, how it's going to affect people advertising on Facebook, on Google, and all the other platforms, because of what Apple is doing in terms of limiting tracking. But to be more specific, to actually give people the choice of either being tracked or not. So you either opt in for tracking or you don't basically that's what is coming to us, or has come to us or some of us on the iOS 14 update. And so this video is all about that. And I want to cover sort of what it what it does, what it's going to do in terms of advertising, how it's going to affect your business in terms of advertising, what Facebook is saying about it, what Apple is saying about it just basically, in terms of what I've understood, this is obviously my opinion, I haven't looked at any other bloggers or any other people's opinions, I haven't watched any videos or any part or listened to any podcasts regarding this topic, I wanted to give a clear, or just a very brief un understanding from my point of view, just as somebody who's been advertising on Facebook for the last five or six years for my clients, and for myself as well. And just based on what I see on surface value, what it's what it entails, why it's gonna affect you and what you can do about it, essentially, that's what that's what it's all about, like, these changes are coming.
Burhaan Pattel 2:50
Good, they've arrived already. And so, you know, it's 2020, it's great, we're going into 2021, this year has been fairly, you know, impactful on most of our lives, if not everybody, whether you're a business owner or not. And, you know, if you're a business owner, you that's probably why you clicked on this video, and you're watching it. But I hope to at least give you some solutions or some ideas towards the end of the video. So definitely stick around for that. And don't forget to hit the subscribe button, hit the notification bell so that you don't miss another video, if you're if you want to, you know, follow along and get more updates from me. So my name is Burhaan. And like I said, I've been advertising for my clients on Facebook building marketing funnels, building digital strategies for my company's for my clients to actually just build a business online.
Burhaan Pattel 3:41
And now more than ever, is the time to do it, or 2020. Specifically, it's never been, in my opinion, it's the best time to actually go online, out of necessity, but also, just because the online marketplace is massive, and the potential to actually expand your reach. Get into sort of helping more people making making more money, obviously, and just having more impact in the world. You can you can use the internet to deliver on pretty much every goal or every sort of change that you want to have or vision that you have for your life. For the future. This is what the promise of the internet brings in terms of business. And this update this iOS 14 update basically affects people's vision or people's plans or people's the internet's ability to leverage our ability to to actually get in front of people. Before I explain. I want to go into a little bit of a backstory just a few minutes to talk about how the how the internet changed things. Pre internet, so pre internet, we had magazines, we had newspaper articles we had, you know, circulations direct mail people were posting things to offer certain products or to offer solutions to, to people, people knocking on doors, you know, literally walking from door to door, apartment to apartment to offer, you know, hey, do you want this vacuum. I remember, when I was very young, I think it was eight at the time, this Kirby sales rep rep who had the same name as me Burhaan knocked on the door, and actually asked my mom, if he could demonstrate this Kirby vacuum cleaner. And back in the day, Kirby was sort of the best in terms of, you know, cleaning your carpets. And so that's what my experience was in terms of direct selling, right. So this man who had the same name as me, and I listened to his presentation, I saw my mom purchased the vacuum cleaner through his demonstration and through his ability to sell. And also just the fact that the product was good. So and my mom believed that the product was good. So so that was how things were done in the past, right. So you would pick a magazine, maybe there was a magazine around fitness, maybe like a men's health or, you know, something like that, or a cosmopolitan or something, depending on where you want to place your product. And that was how you were able to niche yourself out.
Burhaan Pattel 5:11
So you pick a location to circulate where the magazine circulated, they would give you the number of prints that they would distribute every single month or every week, depending on how often the circulation went out. Most probably it would be monthly. And then you'd advertise in that magazine based on where you wanted to be right, depending on what your product was, depending on where your message was, depending on how much you could afford, you would place your ad in this magazine at a specific point, either full page or a half page or, you know, either a site banner, depending on whatever what you could afford. And so that was how you niche down. That's how you, that's how you targeted your customers. Then the internet came along. And the internet was Google. And then later Facebook gave us the ability to target people based on search keywords, specifically on Google. And when Google bought YouTube, they extended that search capability to YouTube. And so now you're capable of running search ads on on Google itself. And then search ads on YouTube as well, which came a little later, but it's all tied into the same platform.
Burhaan Pattel 6:18
And so then what you could do is based on people's intent based on things that they searched for in the past, or based on things that they searching on right now, you can show them your ad based on a very, very specific keyword a very specific target, right. So if somebody was looking for, I don't know, gardening tools for I don't know, Herbes, right, like, that would be a very specific niche. They're looking for tools only for herbes, because maybe herbes need a different treatment, or they need their specific tools. I don't know, I'm not in the gardening industry. But this is how specific you can you can get on Google. And you can still get that specific on Google now. These, the functionality hasn't changed. But when Facebook came along, Facebook extended that ability, when it introduced Facebook pages, and it introduced Facebook groups, because with the ability that we have of following somebody when you follow somebody, or you follow a specific type of business, or you first follow a business that has a certain type of product.
Burhaan Pattel 8:20
And obviously, apart from all the demographic information, right, your age, your location, your you know, people you're friends with the university that you went to, it asks you sometimes what subject that you studied, what business you're into, right, it asks you for all of this information, so that one, it can taylor the feed to you. So you know, based on your interest, you're giving an indication to Facebook that, hey, I want I like to see content from gardening businesses. And I'm extending that metaphor based on that indication by you actually opting in and telling Facebook by liking pages and liking posts, and commenting on posts and watching videos. And doing all of these actions on Facebook, you're telling Facebook, invariably, you're telling people, Facebook, what you're interested in. And so Facebook and Google and all these platforms have built a very sophisticated, I would say Facebook's probably the most sophisticated and Google but they've built a very sophisticated learning algorithm, which you know about already, which we've been using and trying to exploit for years now already to cater the newsfeed to you. To cater the newsfeed to what you like and the goal is to keep you on the platform, right?
Burhaan Pattel 9:39
That's how Facebook makes its money when advertisers place their ads in your newsfeed based on your interests, because we have the ability to do that by targeting in on those specific things. Not using keywords but using interest groups because you like things and commented in things and etc. That's your news feed cater to you, nobody's newsfeed is the same, there is no newsfeed that's identical on play on Facebook doesn't matter where you're located doesn't matter, you can be sitting next to your friend but your interest because your interests are slightly different, or your you know, your whatever it is in the feed is going to be different. There's no note no newsfeed on Facebook, any of these platforms. Even the Google search results are catered to your to your specific profile. So if you sign in on with your Gmail or your business gmail account, then the the search results are going to be based on the things that you're most actively seeking for your YouTube videos are cater to what you like people you subscribe to people, you've commented on videos, videos that you've watched for longer than one or two minutes or you know, certain view count of view, length of a video.
Burhaan Pattel 10:48
And this, the same applies to Facebook. So how does this change on iOS actually affect all of that data? Well, if people are not allowing Facebook, Google, Twitter, Pinterest, all of these platforms who we advertise on LinkedIn, especially if we're not giving the permission to these platforms to tell them, Hey, this is what I'm interested in, oh, this is what I like, then they can't give you a news feed, or they can't give you Facebook can't give you a news feed, that's going to be very specific to what you like, right? Advertisers can't use that data, to show you solutions to some of the problems that you have, because we all buy products to solve a solution. Or we buy products because we have a dream or a goal or, you know, it's just a want type of a thing. But ultimately, we're wanting to solve a problem in our lives. So we buy, you know, glasses we buy glasses to drink from the glass is a container that we can use to be as civilized human beings to pour a bottle of water into, so that that glass serves a specific function where we don't have to actually drink the water out of a bottle. Like that's a very simple example.
Burhaan Pattel 12:04
Or if you're a coffee drinker, your love for the taste of coffee is what gets you to drink more coffee, and maybe you're a connoisseur, or maybe you're just, you know, you like drinking coffee, because you like that. Hit that you get that feeling that you get when you drink the coffee, maybe you need to keep awake, whatever the reason is that you're buying coffee. And so when an advertiser advertises a coffee brand, or a brand advertises their product to you, it's giving you it's reminding you of that emotion of that need of that one. And so maybe you buy that product, because they were able to message you, they were able to get in front of you, they were able to draw your attention into that ad. And and you buy their product. And so Facebook is a money machine. Google is a money machine, these businesses have to function for profit. They're not a nonprofit, they're not a funded organization where people are, you know, donating money to keep them them alive. And the popularity of the platforms has come about mostly because of that personalized experience that we have on these platforms, right?
Burhaan Pattel 13:11
Google got better by giving you really good results, because you're able to get the answers that you wanted from the internet. Right? Google is, in my opinion, the face of the Internet, and because of the ability that they can cater that result to us, is why we use it more. It's the same thing with Facebook, Facebook, when we like, let's say football, we're going to see more football content, because maybe we're football fans, maybe we're fans of a very specific team. And so Facebook can now cater that feed around news that's going on with that team or, you know, oppose opposition to the team, or maybe because of your late, like, there's lots of different ways that that a dice that that can be sliced, right that that orange can be sliced to give you a feed that's catered to you specifically. Because now people are going to be opting in for the ability to, to, to show you in show interest on against certain things. The quality of the news feed is going to reduce your advertising ability is going to reduce, which means Google and Facebook can't track the purchases, you're making they can't track the the interest that you have against a certain product, right, because the advertisers actually pay Facebook, that's how they make their money.
Burhaan Pattel 14:32
And so the advertisers then can't put the products in front of the people that are interested in it. And two, they can't understand or they can't track what they've spent and how many customers they got. So what Facebook is has created a bunch of posts and obviously they're going a little bit nuts with the news type of stuff. But they're saying that the update threatens the personalized ads that millions of small businesses rely on to to find and reach customers, we're giving small business owners a place to speak their mind. So this is a site or a page that they've created, where they've, they're asking for people's opinions, they're asking for people's, you know, viewpoint on what Apple has done. Now, obviously, this is based on their understanding of what the iOS 14 update is. But he has somebody that saying, There's no possible way for that company could have, that our company could have reached the level of success that it has today without personalized ads. And that's a very important statement.
Burhaan Pattel 15:30
Now, you'll notice that Facebook is talking specifically about small businesses, right. The reason why they're talking specifically about small businesses is because what Facebook has been able to do for small businesses is on a very small budget, $5 a day, $10 a day, $20 a day $100 a day, is get in front of the people who are most likely to buy your products, if you've set your funnel up when you set your business up, according to Facebook's guidelines, and Facebook's pixel rules and etc, etc. And your website is optimized blah, blah, all these technical things. But it's given small businesses the ability to do that to track and to personalize the ads to be able to, at a very low cost, advertise and put their ads in front of people who are relevant to them, who are who want their product, who are looking for possibly looking for a solution to that thing that they they're wanting to solve. And so now that the tracking ability is reduced, right, and I won't say it's gone away completely, because people can still opt in for the ability to give your give their information to Facebook, it's going to reduce the conversions.
Burhaan Pattel 16:43
And so what will happen is, let's say for example, you've spent $100, today on an ad, and you've got five conversions, and Facebook actually gives this example. So here's another another page, where you know, it's explaining how Apple's changes may significantly impact your marketing efforts. And down here, this is where they talk about the example right, without using your own. So they use the example of $50. So let's talk about this. So for example, a local bookshop could spend $50 on a relevant and personalized ad, and maybe in five sales, that effectively means you're spent, you've spent $10 per sale, right? So $50, in one day, you got five sales, each one cost you $10, without the use of their own data to personalize an ad, that business would spend $50 and may only made two sales. Now they're not saying that the three sales that are that would have come in is not tracked, they're saying that you're only going to get two out of the five, that means you're going to spend $25 for every sale. And that's more than double, right, that's a 250% increase on the $10 that you were spending.
Burhaan Pattel 17:59
And small businesses most small businesses can't afford for the ad costs to go from $10 to 50 to $25 on a product. Now let's say you're in a bigger business, and you're not selling, you know, $20 things or you're not you're selling higher ticket item, or let's say you're in a small business, right? A Shopify store, you're and you're selling $20 items, $30 items, something less than $100. When your ad cost doubles overnight, that that means that you're dropping your profit margin by a drastic amount. Because if you're spending money on Facebook ads, then it costs you more money to get that customer, which means you need to do more work on the creative side, which means you need to spend more money on Facebook to get in front of the same people or the right people, you don't have the ability to get in front of the right people anymore. And so your spend your overall budget goes up and most businesses can't afford that, whether it's COVID or not. And so COVID has actually made that harder because now it's harder to make a profit. It's you know, you're spending money on building up your website on doing all these extra extra things, buying equipment to make videos or, you know, you've got reduced turnover because you don't have as many walk in customers anymore.
Burhaan Pattel 19:17
And so because of that a lot of people are now using Facebook ads, and have been for a little while already. So now in your ad costs doubles overnight. Now you've got to be like, well, am I, is it is it okay to survive? Because the the fact of the matter is, Facebook is the best platform to advertise on. Because it's cheap, because it's cost effective. And because you get data back on what's working, right you've got the information in front of you of which ad creative worked, which message which headline, which video which image, which audience, which location, which device, which everything right? Demographic, you've got all the information in front of you and so that what that makes, that's what makes Facebook so powerful. But now when you're spending more money to acquire those customers, then you've got a big, big problem. We want to be able to target our customers in the right way target the right customers, and we want to, we want to be able to use these tools, because we wouldn't be able to do that without them. Right. Without the magazines in the past, we couldn't just do a newspaper ad, which would go to everybody, and hope that the ad would resonate. This is why the classified section is broken up into sections, right, you have the houses, you have the you know, all these different categories.
Burhaan Pattel 20:36
This is how Amazon has built their businesses, they've got categories for everything. Now, when you can't categorize your ad, and you can't personalize their experience, you're basically going back to your marketing to everybody and reaching nobody, those are all the external things, right? These are the things that are against us. This iOS 14 update, the the the timing of just it being coincidentally, Apple's made this decision during this year, obviously, from past from the past, you know, scandals that are going around with Facebook, and how Facebook, abused your data of our data, and sold the data off to like this whole court case in all the stories around that. And Apple is saying, well, we want to protect our our users privacy. And yes, I agree with that people do need their privacy. And in a lot of cases, people don't read the Terms of Service of these platforms. And without sort of knowing it, even though they accept it, they don't know that they're giving the data or as much data, maybe people don't know how the algorithm works. So they are sort of ignorant to the fact that well, this information is being used, either for me or against me, it depends on which side of the fence you're on.
Burhaan Pattel 21:49
But effectively as advertisers as business owners, and even, it'll affect the customers, because customers now will see a feed that's maybe a little bit not, not so tailored to them in terms of advertisers. And so maybe they're going to see ads from clients from businesses who they actually don't want to see. So it might actually upset them more, because they are having an Apple device. And because the the the newsfeed the ads that they've seen are not relevant. So that's one risk to Apple. And that's one that's obviously a huge risk for Facebook. Because now, if Facebook is saying, you know, they get somewhere between 42 and $50 per, per person using the platform, the money that they make per user is going to be reduced as well. So their profitability goes down. But what we're talking about is as an advertiser as a business, how does this affect us? Obviously, we're worried about competition, we're worried about the algorithm because the algorithm organically doesn't work as well as it used to be worried about market forces, we've got COVID, we've got, you know, going into 2021, there's potential economic factors that are going on, there's all these things.
Burhaan Pattel 22:56
And this affects business, like every single element outside of our control affects our business. But in in terms of internally, the only thing that we really have to worry about is what do we spend on advertising? What types of creatives do we use do we do to advertise on whether we go organic, or we or whether whether we pay for the advertising, we have to worry about how effective our ad campaigns are. And we have to worry about optimizing that ad spend so that we can get the most out of our ads as possible. Now, that's still relevant, whether we have tracking or not, whether people have tracking or not available, these are the these are things we have to factor in. And if we're saying if Apple is saying, hey, you need to be spending more money to get in front of your customers, indirectly, that's what Apple is saying, then that's a problem. Because then the chance of your business surviving, depending on your product, may not, you may not survive, your business may not survive. And so this is the this is the issue, you know, x you're expecting, or we are all expecting a drop. If Facebook is saying from five conversions to two, based on that $50 spend, then you're talking about more than 50% reduction in your conversions.
Burhaan Pattel 24:07
So if you if your business was converting at 3%, now you're at 1.5% conversion, which means you're basically half the revenue of your business, I want to go through a couple of things of what you can actually do about it. Now, it's not all bad news, you have got certain things that you can do. And I'm gonna go through a couple of them right now. Number one, Dan Kennedy, back in the day in one of these books said that the business that can spend the most to acquire customer wins, right, the business that can spend the most amount of money to acquire a customer wins. Now let's think about that acquisition of a customer that means a new customer, not somebody who knows us from before, how much does it cost you or your ability to spend more to get a customer for the first time allows you to win in business. Why does he say that? It's because the more that you can spend to get like, let's say you need to, you're spending $5 or $10, to get a customer, if you had the ability to, to spend $100, to get that customer.
Burhaan Pattel 25:16
And I'm talking about ability, right? Not cost, then you're in a much better position, because now you've got leeway. Because if you can now get that person to buy for only $10, or $20, or $40, all of that saving is profit. Right? So now if you if you've got customers coming in at $100, to the door, and you're selling them at $100, your products that you must sell has got to be higher value, right, you've got to be able to sell something worth 150, 175, 200, 300, 500, 1000. Because then you have room in terms of budget, that you've got the profitability to be to cater for that. So that's one of the things you can do is have products in your business, have programs in your business, have the ability for your customers, to buy higher, more expensive products, so that you can sustain the ad spins, and sustain this hit that we're going to take to be to for the ads that are going to just be more expensive. Now, as it is ads have been more expensive as more advertisers get into the newsfeed in Facebook, as well as Google and all these other platforms. And so that rising cost of ads has been there over the last couple of years since the inception of Facebook ads.
Burhaan Pattel 26:35
But with this new thing, now we're going to see an exponential growth in cost of advertising online. Because of this limited ability to get in front of our person get in front of our clients. The second thing is because now we're reaching people on Facebook, who may not be as targeted, we need to really dial in on our on our message. And we really need to dial in on our creative. And so that's the second thing you can do is to really, you know, tailor your funnel, speak to that speak to your customers directly try to work on creatives, so that you can hook your audience in and and bring them through as a way of trying to maximize your the ability for people to click through on your ads. One of the other things, one of one of the other things that comes up from the spin off of what Dan Kennedy said, is that what you need to get in front of the right customers so that you can acquire them, you need to get in front of the right customers against your competition. So if you can spend more than your competition, you you're winning, basically. And the more you're paying, the more you the more you're profitable, I think I've covered that already.
Burhaan Pattel 27:42
The other thing you can do apart from copy creative and being able to spend more money to get your customers is to build a brand around your business. One of the reasons why Apple is able to command this type of pushback, right? This is this is how Facebook, this is how Apple has been able to just go back against everybody is because they've built a brand around the business. They use Facebook ads, right? They use ads on on Instagram, they they advertise on Google, they advertise on all the platforms, Spotify, on on everywhere, right? Maybe they didn't track their customers, but because they built such a good brand, because their marketing and their message, and their products are so good. They don't need the tracking, right, because they are at that point. Now for small businesses who don't have the budget to build a huge brand, who don't have a huge marketing team, or a copywriting team or a creative team, it becomes exceptionally difficult to now navigate through all of that. So the big brands are not going to be as impacted, they will be impacted, but not as much. They don't have to worry about it so much because they've built the brand. And so if you can build your brand, if you can find a way to spend your advertising dollars to build your brand. And maybe, you know, create a portion of that budget for conversions because we want conversions. But you're gonna have to spend a little bit more money on brand.
Burhaan Pattel 28:24
And so this goes back to what Gary Vee talks about where it's what content, it's about going organic, or going content and going volume based content, to create videos to create posts to create content so that you know you you you leverage those those posts to get in front of your people. The other thing you can do, and I mentioned it already, I want to highlight that is have a great product. Because if you have a great product, then you're going to, you're going to have good, you're going to give people a good customer experience, right? They're gonna love your product. They're going to enjoy using your product. They're going to tell your friends, their friends, and so they're going to then refer your product to their friends and their family and to whoever and they're going to share on Facebook. They're going to share on the email, they're going to share on Twitter, they're going to share everywhere. So that puts your product in front of more people, which means they're actually doing the marketing for you. And you don't have to spend that money to be able to get in front of your ideal customers. So that's very important, a great product with a great service, and a good referral program. So those, those are three things that actually tied in together.
Burhaan Pattel 30:18
And that's ultimately what you can do, like, until we know more about how this is going. And obviously, I focused on Facebook, not necessarily on Google, Google is sort of just sitting back and saying, well, we don't know how this is gonna affect us. We're waiting to see, I'm guessing they haven't said that. But they're very quiet about this whole thing. Facebook has been very loud and proud about the fact that, you know, they're they're, they're saying that they're in the interest of the public, they're in in your interest by protecting your information. I don't buy that story so well, but it's in terms of the advertisers, they're saying, they wanting to protect small business owners, because it's the small business owners that actually helped they make the most money. And so this is the message that they're sending to Apple and saying, hey, the small businesses are going to be affected the most the people who are running the pizza shops who are trying to do Facebook ads, to get more pizzas into homes. The you know, the common man on the street, the small business, the local business, the guy who's just trying to write copy for, you know, somebody's website or email copy for somebody's website, maybe he's a freelancer, and he uses Facebook ads to get his customers.
Burhaan Pattel 31:28
Maybe you're somebody like me, who, who one who's, you know, who is both the digital marketing business, and I acquire customers through my content and through sometimes advertising. And, and, and I have my business, my clients with these exact problems. So that's the purpose of me, right, creating this video. Again, this was my unbiased opinion. I didn't read anything except for what Facebook has put out. And maybe one or two articles of what sort of the news has said, but I haven't gone in seen any other people's opinions about what it was about. These are just practical things that I think you can do. Well, the question is, how practical they are. Yeah, I don't know. Because it really depends on how much money you're able to spend to get your customers in the door. So that being said, I hope you enjoyed the video, I hope it was informative. I hope I didn't worry you too much. But the fact of the matter is, you do need to have it in your mind. And there are ways around it, they always do. Slowly, progressively build your business. And if that's something that you're interested in me helping you, you know, click the link in the, in the, in the description to book a consulting call with me to chat about your campaigns, and try to find ways to you know, build your brand to put your content out there. And, and and really bet, you know, target your, your message. So again, thank you for listening to the episode.
Burhaan Pattel 32:52
Definitely subscribe to your favorite podcast channel, if you enjoyed the episode. And if you want to message me, you know, feel free to contact me on firstname.lastname@example.org that's my personal email address. Let me know your thoughts on on your advertising campaigns, how it's affecting you, you might be listening to this in the future. And if you have been advertising how I'd like to know what the effect of of this change is doing for your business or the impact on your business. And and with that being said, if you like the episode, thank you so much. And I look forward to putting out more content so that you can be informed of updates, and also just strategies on how to market your business better on the internet. Thank you so much. Bye for now.