As Apple's privacy changes ruffle tech giants and advertisers alike, some direct-to-consumer startups are turning to old-school — and offline — marketing tactics to mitigate the impact.
Outerknown, a 6-year-old surf clothing company, was adept in using Facebook ads to target prospective customers.
But after Apple's iPhone changes rolled out in April — requiring apps to serve a pop-up to users to track them for advertising — the performance of its Facebook campaigns declined.
Facebook said this fall that Apple's privacy changes were causing it to undercount the effectiveness of some advertisers' campaigns. Facebook also cited Apple's tracking update as one of the reasons its ad revenue decreased slightly in the third quarter. Many companies have said the changes have made it costlier to acquire new customers using Facebook ads.
Outerknown Chief Marketing Officer Max Lishansky told Insider the company now plans to shift at least 25% of its marketing budget toward physical direct mail.
Apple didn't respond to a request for comment. A spokesperson for Facebook, now Meta, pointed Insider toward recent blog posts and comments made on the company's earnings call.
Outerknown isn't an outlier. Men's clothier Buck Mason increased the circulation of its catalogs this year by 30% over 2020 and 2019. Luxury bedding brand Boll and Branch and men's fitness clothing company Ten Thousand have upped their use of direct mail this year, following Apple's privacy update.
"We're actively looking for and testing new platforms. And what's old is new again. Print is most certainly not dead," said Jason Nickel, vice president of marketing at Ten Thousand.
Pebblepost, a "programmatic direct mail" company that lets marketers marry online data with mailouts, said investment in its on its platform from D2C brands — around half of its client base — has increased around 72% on average year-over-year. The average campaign size has also doubled versus last year, Pebblepost CEO Jacob Ross said.
Ad experts said direct mail is inherently trackable — it's easy to trace if someone who received a catalog went on to buy an item. Plus, physical mailers tend to sit on the dining room table or fridge door for a relatively long period of time.
Direct mail isn't without its challenges. The supply chain shortage has made it difficult to plan campaigns around products that could go out of stock — and increased the price of paper in some instances. And marketers increasingly are considering the environmental impact of their pushes.
For Rockerbox, a marketing attribution platform that works with around 150 D2C brands, Facebook still makes up the lion's share of its clients' ad spend. But Facebook's share of those budgets has shrunk over the past two quarters while clients shift share to areas including direct mail, over-the-top TV, video, and affiliate marketing.
For its part, Facebook has said it's building more privacy-focused methods to target and measure ads, saying on its recent earnings call that it's aiming to fix more than half of its underreporting of iOS web conversions by year's end.
And many advertisers have held firm — Facebook still reported a 33% year-over-year lift in ad revenue in the third quarter.
"Many D2C brands are very heavily reliant on Facebook ads for prospecting and growth, so they are hesitant to make any significant shifts in strategy without a solid understanding of the impact," said Madan Bharadwaj, CTO and cofounder of ad measurement firm Measured. "Sales numbers suggest that campaign performance isn't as bleak as what Facebook is reporting."
Nevertheless, experts said Apple's privacy update has prompted Facebook-reliant D2C brands to diversify their media mix long-term.
"The days where you could launch on Facebook and scale to six-figure ad spend very quickly are over — it's not impossible, but much harder," said Will Ashton, CEO of ecommerce social marketing agency Nest.
