There's a lot of doom and gloom over the new iOS 14 privacy changes - mainly from marketers. It’s no secret that most D2C brands rely heavily on Facebook, Instagram, and Google Ads as their main acquisition channels. The upcoming changes are leading to major concerns and pressure on marketing teams to understand what this means for their business and determine new opportunities for future growth.
But what exactly is going on?
Apple is shifting to putting consumers' choices first with the new iOS 14 privacy feature. This limits how much information can be collected by third-party tracking scripts. Users now have to manually opt-in when prompted if they’re ok with their data being collected. With more users becoming concerned about online privacy these days, the majority of users are expected to opt-out of tracking.
Brands are worried because now they can’t personalize ads to iOS users’ behavior. However, these changes don’t mean that digital advertising is dead. It just means that brands have to adapt and leverage other channels to continue growing their company,
The advertising game is changing
App tracking transparency (ATT) is the major area of focus for the advertising changes. Apple and Google understand that users are wary of being tracked and want to opt-out of tracking when they can.
What Apple ATT changes mean for marketers
Apple’s privacy changes with iOS 14 mean that customers now have to explicitly opt-in and agree to being tracked - unlike before, where apps would track user activity without permission. Data privacy is increasingly becoming a concern for users, so many people are applauding Apple for the changes they’ve made.
While this has led to a public battle with Facebook (who wants to collect all the data), Apple is standing firm in its decision. With the release of iOS 14, it’s going to be harder for brands to personalize ads for their users on Apple devices. Facebook argues that this change will disproportionately hurt small businesses who don’t have as deep of pockets for advertising and where tracking behaviors is essential to reach the right audience.
What Google's privacy changes mean for marketers
Apple isn’t the only one announcing a win for customers concerned about privacy. Google has announced a change to privacy policy as well. A future update in Google Chrome will effectively kill third-party cookies - reducing how much user activity can be tracked. The good news is that activity can still be tracked, but brands using tracking technology will need to follow specific guidelines to track users.
Advertising & customer acquisition costs continue to rise for D2C brands
With the increase in acquisition costs for D2C brands advertising on Facebook and Google, it’s going to be even harder to create profitable ad campaigns because of the limited targeting options. Advertising isn’t dead, but your campaigns and budgets need to be adjusted accordingly.
Paid ads are getting more expensive
Gone are the days where you could get a guaranteed low cost per conversion through paid ads. As more brands leverage social media and Google ads, the cost of advertising on those platforms is ever increasing. If you’re selling products at a high price point, then ads can work for you. But for brands selling discount/lower-priced products, ads are becoming increasingly unprofitable.
Advertising fatigue for social media users
Are you tired of scrolling through social media only to be bombarded with ads? There’s a reason why ad blockers are so popular these days. Customers are constantly bombarded with ads when using their mobile devices, so they’ve grown indifferent to ads. Some companies try to make ads look like a native post on social media, but shrewd customers know an ad when they see one.
What do Marketers do now?
Even with the advertising changes, it doesn’t mean that sales are suddenly going to tank. As an ecommerce brand, you’ve likely amassed lots of customer data that can be used to market to customers directly. Here’s how you can shift away from overly relying on ads to focus on other marketing channels.
Owned marketing is more important than ever
While it has been great leveraging the large audiences of social media platforms and Amazon’s marketplace, D2C brands need to leverage the channels they own to reduce acquisition costs and improve repeat purchases. This is where owned marketing comes into play.
What is owned marketing? At its core, owned marketing focuses on marketing through the channels you own, hence the name. Owned channels include:
Email & SMS subscriber lists
Website
Content marketing
Referral marketing
Reviews
Owned marketing has numerous benefits to make it a major focus of your ecommerce strategy. Here are some of its main advantages:
Lower acquisition costs
When you use your owned channels for marketing products, you don’t need to pay for running promotions. So if you make a sale through these channels, the acquisition cost is zero (minus the costs of the software you’re using). If you’re a small business that doesn’t can’t spend a fortune on advertising, you benefit greatly from owned marketing.
Own your branding and messaging
If you control the brand channels, you can enjoy complete control over what you are promoting, whom you are targeting, when you are promoting, and how long you want the promotion or any other marketing content to stay. Paid channels limit how much of your content is seen, whereas your owned channels keep the content online indefinitely.
Reduce reliance on paid ads
Ads are a great way to drive growth. But with growing ad costs, they can take a big chunk out of your profits. Targeted ads will be even harder to do well and more expensive to get right, due to the recent ad changes, so profits are likely going to keep decreasing. Marketing through your owned channels can reduce your reliance on ads.
While Google ads are convenient, they can be costly. With some search engine optimization (SEO) expertise, you can use your blog posts to attract audiences and acquire customers for free. To achieve great results from owned marketing, you need to deploy the right strategies for each type of media.
Own the communication channels with customers
Besides providing more control over your content, owned marketing also allows you to connect and communicate with your customers more directly. The comments section on your website and your social media channels are perfect examples. If you own the communication channels, you can keep, remove, and respond to comments as you like.
Leverage these communication channels to promote brand loyalty by making the customers feel heard. Take suggestions from customer comments about future product launches and use them to gain insight into your customers’ experience with your current products and services.
Growing LTV
One key metric D2C brands focus on is customer lifetime value (LTV). This metric is vital to success because it determines how well your brand can retain customers. With a high LTV, your customers are likely to stay with your brand and it indicates how happy they are with your brand.
One of the best ways to increase LTV is to increase the number of repeat purchases by customers. By having them buy more from your brand through targeted upsells and cross-sells, you can continue to increase LTV without relying on expensive ads.
Optimize the customer journey
The customer journey is crucial to get right. It’s not a “one-and-done” setup. You should always look for opportunities to improve the customer experience where you can. For example, the post-purchase experience is becoming an area of focus for D2C brands. By improving the post-purchase experience, brands can increase their repeat purchase rate at almost no cost. Keeping customers happy just leads to more sales. Crazy, right?
How Malomo improves the post-purchase experience
Ready to improve the post-purchase experience for your customers? Here’s how Malomo makes it easy to improve the post-purchase experience.
Branded tracking pages
Customers check shipment tracking 4.6 times for each order. That's why it's crucial to invest in tracking pages that are both functional, offering real-time shipment tracking, and beautiful.
Malomo makes it easy to create elegant, custom-branded tracking pages that integrate seamlessly with Shopify. Malomo also makes it easy to offer product referrals that drive sales directly from your shipment tracking. Kill two birds with one stone — offer your customers the best shipment tracking experience while also turning it into one of your highest-performing marketing channels.
Proactive shipping updates
Customers hate when their shipments are delayed. But hate it more when delivery delays aren’t communicated to them. With the rise in shipping delays due to COVID-19 and the Suez Canal blockage, it's essential to effectively communicate possible shipping delays before and after customers place their orders. Expectation management is vital to improving the customer experience.
Drive repeat sales
Offer product suggestions within high-trafficked order tracking pages and email notifications that integrate flawlessly with your Shopify or Shopify Plus store — without HTML or javascript knowledge.
Deep Shopify integrations
Malomo’s native integration with Shopify and Shopify Plus makes getting started with Malomo a breeze. Additional integrations with apps like Klaviyo and Postscript make it easy to integrate Malomo’s post-purchase communications with your email and SMS workflows.
Conclusion
While the upcoming advertising changes for Google and Apple are going to reduce ad personalization, it doesn’t mean that D2C brands are going to see a massive drop in sales. While there may be an initial dip in sales, brands that focus on improving the customer journey should see an increase in sales.
Get started with Malomo today to improve the post-purchase experience for your Shopify store.
