Data Privacy and Ad Tracking: The Real-World Implications for Businesses

The world has gone digital, and as a result, global concern regarding data privacy has skyrocketed. Consumer-facing media platforms have historically profited from ad revenue, the success of which has been fueled by the insights derived from accessing and analyzing user behavior. As users become even more tech-savvy, the way their data is used is at the forefront of their minds — and the businesses interacting with this captured data have experienced increased demand to respond to consumers’ heated concerns.

Against this backdrop, tech giants like Apple and Meta continue to weigh the best methods for providing privacy controls on behalf of their users, all while remaining mindful of potential blowback to the ad revenue that supports their business. 

Apple’s iOS 14.5 update in 2021 drastically shifted the advertising landscape, requiring apps to ask permission before tracking users’ activity across other apps and websites. But this shift was not without repercussions: data management company Lotame estimates that Facebook’s parent company, Meta, is projected to lose upwards of $12.8 billion in revenue in light of these changes by the end of 2022. 

Media giants aren’t the only ones managing the fallout from Apple’s move — small- to medium-sized businesses are also searching for ways to adjust to today’s volatile digital marketing landscape.


Before and After: The Impact of Ad-Tracking Changes

In the past, platforms like Facebook could automatically opt users into data tracking. This enabled the platform to generate personalized ads according to a user’s device activity, in addition to tracking a consumer’s actions as they clicked on ads, viewed shoppable pages and converted to sale from advertisements. It was also legal for platforms to share that tracked data back with advertisers in order to review the success of ad campaigns, improve ad targeting and ultimately enhance the advertiser experience.

Because consumers continued to rally for more data privacy, Apple rolled out a massively influential new feature — the opportunity for users to “opt in” or “opt out” of these data tracking capabilities. Quickly, more than half of iOS users chose to disable apps from tracking their data — only about 46% remained opted in.

Though Apple’s decision came as a relief for a swath of users, it simultaneously caused a disruption for advertisers. DTC ecommerce brands suddenly lost visibility into the success of their ad campaigns and were left with less insight into their true return on ad spend (ROAS). Businesses needed to quickly adjust their footing to adapt to this data loss.

Weathering the Storm

Here’s the good news: many businesses have come out stronger.

Due to the significant data loss, thousands of brands adapted by exploring alternative attribution solutions — third-party software that reclaims the data no longer shared by advertising platforms after iOS14.5. This data is critical for business owners to determine which marketing channels, as well as unique ad creative and copy, yield the most profitable results.

While businesses have always been wary of the accuracy of on-platform reporting, the implementation of these new tracking solutions has further highlighted pervasive errors amongst in-app data reporting; now, brands are even more aware of the true performance of their ad dollars.

Here are two real-life stories from DTC brands chronicling their experience scaling beyond the storm of iOS 14.5 privacy changes.

Doe Lashes is a DTC ecommerce brand that delivers luxury re-wearable eyelashes and beauty accessories. When Doe’s founder Jason Wong set out to build a viral online brand, he understood that diversifying its digital presence was key. He partnered with channel experts and top influencers on Facebook, Instagram, Snapchat and TikTok to maximize efficiency in reaching his target audience.

Doe’s ad campaigns were a hit, winning the brand a wealth of sales and capturing valuable consumer data — but with data spread across multiple media channels, it was difficult to draw big-picture insights as to which channel was resulting in the best ROI. TikTok advertising presented a distinct challenge, as the platform’s in-app performance analytics showed results drastically different from the team’s internal calculations. Without clear visibility, Wong’s marketing team were left guessing as to which marketing campaigns to scale — and this became even more complicated after the iOS updates.

By utilizing a third-party attribution solution, Doe’s team was able to get a clear idea of sales performance from each active channel, leading to more efficient, scalable ad investment decisions. The data revealed that for Doe, TikTok yields significantly higher ROAS compared to other media platforms, thus enabling the team to scale their TikTok ad campaigns more than 2,900% by upping their daily ad spend from ~$100 to $3,000+.

In the case of Obvi, an ecommerce brand that sells regenerative vitamins and supplements, Co-founder and CMO Ashvin Melwani noticed the company’s Marketing Efficiency Ratio (MER) declining after Apple’s iOS privacy update. Frustrated by the lack of accessible data, Melwani and the Obvi team launched new ad strategies, but weren’t seeing the growth they had forecasted. 

When Obvi implemented a third-party data attribution solution, they were able to make data-informed media buying decisions. Their MER and overall sales performance rebounded soon after, with year over year revenue growing from $18 to $30 million. Accurate data attribution enabled Obvi’s marketing team to determine which channels offer the best return on investment while highlighting key areas of optimization opportunity, ultimately unlocking the ability for Obvi to scale its growing business profitably by nearly +67% in under a year’s time.

Resiliency is on the Rise

Apple made a major statement on data privacy by launching the iOS14.5 update, with many other large media companies following suit. Although countless businesses have experienced digital marketing turbulence in the wake of this rollout, notable growth in learnings and marketing efficiency have come to these brands on the other side.

As our case studies indicate, businesses and DTC brands desiring to scale amidst today’s changing ecommerce market should leverage third-party data attribution solutions.

Businesses that use these tools have proven to be more resilient than ever, using the insights they uncover to re-evaluate their digital marketing strategy and ensure they’re making the best decisions to support future growth. The experience of having weathered this transformative shift in the digital advertising market will undoubtedly help brands prepare themselves for any additional data privacy changes in the future.

Based in Austin, Texas, Alexa Kilroy is the Head of Brand at Triple Whale, a strategic role that ecompasses design, messaging, event experience, PR/communications, partnerships marketing, and more. Prior to joining Triple Whale, Kilroy worked in performance marketing, creative strategy and growth for 7-figure+ direct to consumer ecommerce brands including  Superfoods Company and First Day. She’s passionate about helping businesses use data to grow and scale, and loves crafting compelling messaging, visuals and innovative branding.

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