- Advertising agency OXG Media spends hundreds of thousands per month for ecommerce clients.
- It’s seen some clients’ revenue drop as much as 40% since Apple’s privacy crackdown.
- Some clients have shifted their entire budgets from Facebook’s Meta to Google and TikTok as a result.
Apple’s privacy changes are making it so hard for some advertisers to see how their Facebook ads are working that they’re leaving the platform altogether.
Back in April 2021, Apple started requiring apps to get people’s consent to track them for advertising purposes. Many people asked not to be tracked, leaving advertisers with less visibility about who they were targeting and if their ads were reaching their intended audience.
Advertising executives and industry analysts told Insider earlier this month that they expect Facebook owner Meta to lose digital ad market share for the first time this year in part due to Apple’s move.
Insider spoke to an ad agency owner, Jonathan Ng of Singapore-based OXG Media, about how the Apple change has impacted advertisers and why he thinks advertisers’ shift to Google and TikTok won’t be a blip.
Meta said it’s set up a hub to help smaller advertisers improve their ad performance while respecting consumer privacy and that small businesses have adopted its recommendations with success. It also pointed to its ongoing work to improve its ad infrastructure to let advertisers target people in a privacy-safe way.
Here’s Ng’s story, as told to Lucia Moses.
I run paid advertising for ecommerce brands, mostly clients based in the US and Canada. We spend on average six figures in advertising per month for brands in the SMB market selling mainly physical products.
Since Apple’s iOS change, some clients have seen their revenue fall as much as 40% due to their Facebook ad performance declining. The change especially impacted early life-stage companies — SMBs that don’t have a lot of brand awareness and need to make money on the first sale. They’re very, very dependent on Facebook. It’s the most scalable.
Jonathan Ng
Also, Facebook completely removed so many detailed targeting options, which makes it super-difficult to accurately target the customer.
But now it’s very easy for advertisers to jump ship. TikTok has become a viable alternative. TikTok is also impacted by the iOS change, but its ad rates are cheaper than Facebook’s, which is raising the price of its ads.
TikTok is letting advertisers target based on what people are searching for. You can also find influencers on TikTok. I really feel like they’ve listened to the customer. The experience is surprisingly positive. Before you even start spending, a rep will reach out and say, “How can I help you be successful, et cetera.” They know the pain points of Facebook and they’re just doing exactly what Facebook is not doing.
I would think eventually the ad inventory on TikTok will be much higher than Facebook because the watch time is higher and people don’t mind ads cause they actually want to watch the content.
Some advertisers that perform well in search are also going all in on Google, which hasn’t been as affected by Apple’s privacy change. Its traffic has much higher purchase intent than Facebook. Google also performs predictably for advertisers. They also came up with Performance Max, which provides the unlimited scale that Facebook has. I think that’ll be the next frontier of them taking share from Facebook.
I would say 45% to 55% of my spending has shifted out of Facebook. Probably 80% is going to Google and 20% to TikTok.
As a person who helps small businesses, I want Facebook to succeed. Not every business and its products or services can advertise on TikTok. Sometimes the audience is not suitable. So even if TikTok is taking market share aggressively now, if Facebook gets their stuff together, advertisers will have no problem going back.
It feels like an apocalypse now, with inflation, supply chain, gas prices — it’s very stressful. Some people say if companies are struggling, they probably shouldn’t be in business. But you’re basically saying entrepreneurship is impossible. If there’s a full-blown recession, lots of mid-sized businesses may go under. It’s going to kill a lot of people’s dreams.
