In late March 2023, it was announced that Meta (owner of Facebook and Instagram) is going to give users the ability to opt out of personalized ads. This will affect campaigns on these platforms. This is part of a broader trend: the move toward privacy by default. Consumers will have control over the data that advertisers can use. At STROOM , we navigate the constantly changing online landscape on a daily basis. Good news: with a few adjustments, advertisers can continue to reach their target audience in a targeted way.
What's going on?
Meta allows users to opt out of highly personalized ads. This is in response to a multi-million dollar fine for violating European privacy laws. Only broad characteristics such as age and global location can still be used to target ads. All behavioral information that says much about users' interests, such as what users click on and what videos they watch, is then no longer available to advertisers. As a result, targeting options will become increasingly limited. For specific targeting, audiences will become smaller, because Meta has this information from fewer people and thus fewer people fall into a specific target group. As a result, the reach of campaigns will decline. To maintain reach, maintaining broad targeting is an option. This will increase the waste of a campaign on Facebook or Instagram. If you are following a growth strategy, this is certainly not a disadvantage. After all, you will reach more non- and light-users with broader targeting.
How big is the impact?
The question is how big the impact will be in practice. In the most extreme case, targeting options on Facebook and Instagram will become even more impoverished. This previously happened when Apple blocked advertising tracking by default. This prevented Meta from tracking users beyond their own platforms, and thus less data came in. Meta already removed interest and behavioral targeting options as a result. Indeed, target groups were becoming too small due to a lack of data.
However, there is a big difference between then and now. Back then, Apple turned off tracking citywide. Now Meta requires users to take action. They must actively opt out via a Web form. This is a relatively high threshold for consumers who generally choose the path of least resistance. Probably only a small privacy-conscious minority will opt out. The changes will then be minimal.
Privacy by default becomes mainstream
Meta is not the only tech giant to start limiting data collection and targeting capabilities. Google already stopped the ability to target look-a-likes of existing audiences in late 2023. Look-a-like audiences allow you to target people who are very similar in interest and behavior to existing buyers, for example. With the elimination of this, targeting via Google becomes a lot less specific. The move toward privacy by default that was initiated in 2018 with the introduction of the AVG law seems to be becoming mainstream 5 years later.
The disappearance of 3rd party cookies, which collect information about users from different websites to use for campaigns, for example, also hangs over the market. Already most of the market is cookieless because Safari and Firefox no longer allow 3rd party cookies. When they will also be banned in Google Chrome is still unclear. When this happens it will mean the end of tracking based on 3rd party cookies. (Re)targeting, frequency capping and conversion attribution as we know it now will then no longer be possible.
How to move forward?
As the targeting capabilities diminish, the distinctiveness of Facebook and Instagram will diminish. This means that other variables will play a more important role in choosing the most appropriate platforms for a campaign.
At STROOM , for specific audiences, we look to other, local, platforms that have better privacy protections in place and are building audiences based on a privacy first strategy.
There is little chance that Facebook and Instagram will cease to play a significant role at all in campaigns. The reach of the platforms is as high as ever. Moreover, the algorithms on the basis of which we optimize campaigns to reach interested people are strong. As a result, we apply self-selection, so to speak, within a broad target group. The people who show that interest will primarily be reached. Our campaign managers optimize daily for interest that manifests itself in a click or watching a video.
Moreover, the need to look at online marketing differently is growing. We are moving from 1-to-1 targeting of individuals to targeting for content relevance based on context. Context targeting can be applied in different ways. Here we are not just talking about the online context by targeting by topic or keywords. We are also talking about the physical context, targeting at relevant moments for example based on time, weather conditions or mindset of consumers. In addition, own 1st party data more important to target an audience and to track campaign results.