Article

Lloyd Davies
Lloyd Davies 16 November 2022

How DTC Brands Are Changing After Apple’s Privacy Changes

Since the dawn of web 2.0, social platforms have offered direct-to-consumer (DTC) brands endless opportunities to reach new audiences, grow communities, and engage with customers on a personal level. Digitally native by nature, and with minimal high street or brick-and-mortar presence, the growth of many of these brands has been down to their success on these platforms.

Despite its Facebook Live Shopping feature shutting down in October 2022 to be replaced with a focus on Reels, Meta has been at the forefront of this ecommerce evolution.

Its Facebook and Instagram features, including Instagram Live Shopping, Reels Ads and Reels, provide opportunities for integrating effective and impactful targeting, as well as building brand awareness. However, the implementation of new privacy updates on Apple's iOS system – the App Tracking Transparency (ATT) framework – has created a significant challenge for those who advertise on Meta’s platforms.

Navigating this new and changing landscape while continuing to see success has rested on the willingness of DTC brands to test different channels and dedicate budget to experimentation.

Focus on First-Party Data

ATT can be seen as part of a wider move away from third-party data across the advertising ecosystem. Despite Google again postponing its deadline for the depreciation of third-party cookies, it is clear that companies must increasingly focus on the first-party data collected from their marketing channels.

Already existing channels such as websites or email newsletters are a good place to start, and with fully optimised creative and messaging, these can gain a plethora of consumer insights.

Social channels can also be used to bolster first-party data strategies; brands could, for example, run a contact collection campaign on social networks using lead forms, instead of a landing page. Further reach can be achieved through the expansion into new channels that are relevant to target audiences, such as Connected TV, which has seen a boom in recent years.

First-party data, collected with consumer privacy prioritised, can be a powerful and accurate source of information for DTC brands, providing a better understanding of customers, which in turn allows for targeted personalisation and granular knowledge of their journey.

The Attraction of Influencer Marketing

Influencer marketing has been an important tool in the arsenal of marketers for a number of years, and its power only continues to grow.

The global market for influencer marketing is valued at $13.8 billion, and Meta’s recent launch of Instagram Creator Marketplace signals its continued importance, especially to digitally native brands. Whether through product reviews or paid ads, influencers can build creative, naturalistic content that engages consumers throughout the entire marketing funnel.

The key to influencer marketing success is keeping a firm grasp on the effectiveness of spend. Though influencer-led strategies rely on creativity and close creator-audience relationships, brands need data to drive their strategy.

The use of affiliate links or discount codes can help to quantify the direct effect of each influencer or campaign on a brand’s bottom line. Reach and interaction stats can also help to show awareness of consumers at the top of the sales funnel. With these insights, DTC brands are able to pinpoint which activities are supporting their objectives and tailor their strategies in response.

Having a 360-Degree Approach

The challenges of incoming privacy regulations and evolving market trends – especially when the financial squeeze might impact consumer spending habits – makes it more important than ever for DTC brands to constantly test new techniques to optimise advertising spend. By experimenting with new ways of reaching and engaging consumers, brands can be ready to pivot quickly when required.

Server-side tracking is one method available to DTC brands to support informed marketing decisions through the potentially rocky times ahead. Unlike their browser-side counterparts, these do not rely on third-party cookies, and instead allow brands to collect data themselves.

Similarly, brands can harness the power of conversion APIs, such as Meta’s CAPI, to assist with connecting in-house data to platforms to improve conversion attribution.

Predictive modelling solutions also provide brands with a powerful way of enhancing the effectiveness of their spend, while solutions that link both offline and online data – such as Meta’s approach to this –  can help DTCs to harness the full potential of the data collected across every channel.

The power of social media is not going anywhere, despite recent changes. The millions of users that still regularly engage with these platforms give DTC brands access to a huge range of consumers that have already been placed in contextually relevant audience segments.

But, as the focus on privacy grows and changes are implemented by both regulators and tech giants, brands will need to explore new solutions to reach users in an effective but secure fashion. Adopting a test-and-learn mindset will be an imperative as DTC companies look to stay ahead of the curve.

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