The Biggest Threat to DTC Brands in 2023: How to Combat Apple's ITP Update
Ever since Apple introduced Intelligent Tracking Prevention (ITP), limiting storage of third-party cookies to seven days, DTC brands have lost visibility into their digital customer bases. Apple followed up soon after with App Tracking Transparency as part of iOS 14.5, effectively preventing apps from collecting user data — unless they opt in. As of August 2021, over 90% had opted out.
Why has ITP been such a growth impediment for DTC brands? In this article, we will unpack:
- How ITP and seven-day cookies impact e-com brands
- What brands can do to combat ITP effects
- How to leverage industry tools to conquer ITP
While Apple’s rollouts have been a shake-up for marketers, the team at Black Crow AI knows these events have always been (and will continue to be) an important part of the landscape. And stand-out marketers will continue to learn and pivot.
Read on to learn how you can take action and make every dollar of your marketing budget impactful again.
What’s happening to brands due to ITP and seven-day cookies?
Third-party cookies have been the core tool for user targeting for nearly 20 years. And as a result, countless brands have scaled their businesses off the backs of dominant channels like Facebook and Google.
We’ve commonly understood cookies within the context of privacy – and as such, much of the news around iOS14 has focused on privacy implications. But in reality, cookies are the central underlying technology powering the internet.
Thanks to ITP, the cookies and iOS tracking data that accurately targeted valuable prospective customers effectively died; the data lifespan was reduced to 7 days. But what does this actually mean in practice? And how can marketers understand it – without needing to become web developers?
Here’s the breakdown of ITP’s impact on different layers of marketing:
Impact on web analytics
Web analytics are supposed to show you what your user is doing and help you understand those users. Previously, you could ask questions like:
- “How do my returning site visitors behave differently than my new users?”
- “How are they different?”
- “Where do they come from?”
With the introduction of ITP, however, you lose the opportunity to correctly identify returning traffic. If your visitor takes longer than 1 day if they came in through a paid channel, or longer than 7 days between site visits, you can no longer map their journey – that returning visitor is regarded as a “new user” by analytics platforms.
Impact on owned marketing
Take this example: a user has previously purchased from you, so you have their email and know who they are. Two weeks later, they come back and they want to buy from you again – but this time, they're a little more unsure. They add a product to their cart, but ultimately don't complete the purchase. In pre-ITP days, you would send them an abandoned cart email.
But what if you don’t know that this is the same user who was here two weeks ago? Without being able to connect those two sessions, you cannot know the email of the mysterious cart abandoner.
If you're unable to rely on owned marketing, from where do you think you're going to have to acquire that user? Paid – where even more hurdles are presented.
Impact on paid marketing
Paid marketing platforms have their own machine learning, used to determine which users your ads are served to. But their ML results are only as good as the data it’s fed.
As a result of ITP and seven-day cookies, their ability to track user behavior across sessions has been lost. They cannot know that the user who clicked on a Facebook ad today is the same user who visits your site in a week. Losing this crucial information means they lose the ability to provide you with the best possible users at the lowest cost.
Plus, less data on visitors from iOS devices makes it harder to build lookalike audiences and effectively retarget customers. Fewer data points also make it harder all-around to tweak campaigns.
As a result, advertisers have been left to depend on unreliable data from third-party platforms, and quickly saw:
- Soaring CAC
- Lower ROAS
- Higher CPMs
- Less Profit and Revenue
That’s why companies have reacted dramatically, moving ad spend to unique channels or shifting their marketing models entirely.
Impact on attribution
Attribution is trying to answer the question: “how should I allocate my marketing dollars to different channels?” This relies on the ability to track a full user's journey, across multiple sessions and platforms.
If the cookie you're using to identify a user only lasts seven days and a user's journey is three weeks, you're not seeing the full picture. And as a result, you can't accurately allocate dollars to different channels, campaigns or creatives; you're not seeing the full picture.
Overall, ITP and seven-day cookies have become a massive disruption to how advertisers market to consumers.
Read on to take action and combat the negative effects of ITP.
What brands can do to combat ITP effects
Major technological shifts have always been part of the e-commmerce landscape. With them, it’s up to digital marketers to adapt and pivot accordingly.
Here’s what you can do:.
1) Diversify your channel mix
Many advertisers have successfully responded to ITP by leaning on other platforms — outside of the traditional Facebook and Instagram lanes. Some options include:
- Building owned audiences by investing in email, personalization, and loyalty
- Doubling down on paid search or Google products (like Shopping or Display)
- Experimenting with socials like Pinterest, Snap, or TikTok, each of which require unique approaches and offer unique benefits
- Taking a more manual approach to attribution, i.e., presenting post-checkout surveys to buyers and matching that info with UTM parameters via Google Analytics
2) Double down on KPI measurement
To gauge the true efficiency and profitability of your ad spend, try returning to basic testing — without relying on any of your platforms’ reports. As an example:
- Instead of relying on Facebook’s direct attribution report, try running incrementality tests or halo analyses.
- Those numbers will help you conclude: “Driving more spend to Facebook results in a trackable lift on the backend of my Shopify store,” or vice versa.
In the words of Avi Ben-Zvi, Vice President of Paid Social at Tinuiti,
“If you don’t adapt past outdated methods, you only hurt yourself. Trust the testing to tell you what’s actually driving revenue right now.”
How brands can move forward from ITP
Apple’s rollout of ITP and seven-day cookies has caused severe implications for e-commerce brands and marketers — from sharp downturns in ROAS to total marketing model overhauls. And these effects are only exacerbated for brands that delay pivoting their strategy.
Fortunately, some low-hanging fruit include diversifying your channel mix and doubling down on old-school testing and KPIs, both of which reduce reliance on faulty third-party reporting.
To take things a step further, teams can also turn to cutting-edge user data platforms like Black Crow AI, which helps brands unlock the hidden value in their first-party data to improve marketing performance and customer touchpoints. Expect reduced CAC, lifted ROAS, and greater revenue and profits.
Take action to protect your marketing dollars today by getting started with Black Crow AI.
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