If 2019 felt like a year where data privacy was never out of the headlines, 2020 shows no sign of being any different. In the US, the California Consumer Protection Act (CCPA) came in to force on January 1, introducing a set of regulations similar to those laid out by the General Data Protection Regulation (GDPR) in Europe. Legislators from across the globe are now following suit. Mexico, Brazil, Australia, Japan, Singapore, and India are among the various markets creating or updating their regulations to protect consumers’ data. In 2020 brands and publishers across the globe will face increasing concerns for privacy and data protection. Why? Because users are more aware than ever that their data is coveted by organisations.
The digital advertising industry continues to be the focus of intense scrutiny for not respecting consumers’ data and privacy. Hidden beneath complex technology and opaque operating practices, high profile data breaches have been uncovered and exposed at an alarmingly frequent rate over the last 18 months. The issue is of such mass public concern, it’s even caught the attention of Netflix. In 2019 it released a prime-time documentary called “The Great Hack”, exposing the data abuse and rogue techniques that have powered much of the multi-billion-dollar digital advertising industry for years.
There’s no doubt the curtain has been lifted. Advertisers, publishers and consumers are now fully aware that the ads they buy, serve or see are often delivered by technology companies that are collecting and using consumer data without permission, and without giving consumers a choice - exactly the type of practice that incoming regulation is designed to stamp out.
The advent of consumer privacy laws around the world, coupled with high profile news stories (and Netflix documentaries!), have changed the way digital advertising will be executed from here on in. Consumers need to have control over their own data, privacy, and advertising experience for that matter. This model needs to be embedded into company practices.
In order to take stock of how far we’ve come, and what is left to achieve, the mobile adtech company Ogury conducted a number of interviews with leading figures from UK brands and agencies, shining a light on the imperative shift within the digital advertising industry in 2020 and beyond.
GDPR: The start of a new industry
The introduction of GDPR provides consumers with significant legal rights over their data and privacy. Meaning, deceitful practices within the digital advertising industry are now more than just morally questionable, they’re illegal.
GDPR had a marked effect of the industry throughout 2019, according to Miles Pritchard, a Managing Partner of Data & Technology Solutions at OMD EMEA. He believes that “GDPR’s impact on the digital advertising industry has been to refocus our attention on the end consumer and the appropriate use of personal data in developing and placing advertising.” Pritchard tells us that “strategically it has tasked us with taking a step back and rethinking our approach to identity and personalisation at scale, to ensure that we place the consumer at the heart of that process.”
Brendan Greenwell, Audience Strategy Director, EMEA at Initiative agrees with this view. He says: “Digital advertising was one of the only industries left unregulated until relatively recently. This lack of regulation resulted in several areas of concern, much of which stemmed from a lack of focus. Overall, more control was needed: the pre-GDPR market had created a supply chain that made it near impossible to know when and in which context data was collected, or even its real source.” Greenwell believes that data privacy laws are doing more than just regulating the industry, they’re shaping the effectiveness of advertising results - “What regulations like GDPR have done is help the industry mature. We now advertise to people that actually want to listen… and that is producing some amazing work.”
Privacy regulations are being well perceived by organisations who’ve adapted their advertising practices accordingly, and are therefore witnessing the positive business results. For others however, there are some serious questions being raised - and professionals such as Pritchard are aware of the challenges that come with these laws. “It is undeniable that privacy regulations are creating friction across the digital advertising industry and ad tech landscape. For many companies, the GDPR introduction has created an environment of uncertainty and a high degree of risk, which has undoubtedly increased operating costs, reduced productive output in favour of administration and due diligence, and skewed potential innovation.”
Helping consumers understand the value exchange
From an end-user perspective, Pritchard believes that: “The GDPR is aimed at improving transparency and control to users. However, the average consumer, not well-versed in digital advertising, may not be aware of these benefits.” This demonstrates the fact that the industry needs to help educate consumers, compassionately without patronising or assuming knowledge. The perfect way to do this is through the consent notice. Making them clearer, non-ambiguous, and ensuring consent isn’t forced (which is often the case), will help build trust with consumers.
He also warns against unintended consequences. “Quality content through digital publishers could become a luxury as subscription fees come into force, replacing advertising revenues currently accrued through the monetisation of audience data. Most of the focus will likely be aimed towards ‘pushing back’ on tech giants, who are perceived to have gone too far in harvesting and monetising personal data for nefarious purposes.”
The only way to overcome this, is to really help consumers understand the value exchange that comes with sharing their data and receiving ads in exchange for free content. For example, Spotify does this very well. You pay a subscription fee to access content (music) without ads. Or, you listen for free, and receive relevant ads. Consumers understand this, because they're given a fair choice. The same approach should be applied to the open internet.
Digital advertising must now be driven by user choice
Jorma Kremser, Global Media Manager at Bose Corporation, believes that putting user choice at the core of a company’s strategy is a top priority. “Having our customers and potential new clients consent to data sharing is of the highest importance to us. We take the user experience very seriously and that neither starts nor ends with our advertising, site visits or the usage of our actual products via our app. When you look at our brand’s heritage, which took a lot of blood, sweat, tears and years to build, we always put the customer first.”
At Ogury, it’s a topic close to our hearts. Max Pepe, VP Marketing at Ogury tells us that “Consumer data has been mishandled systematically for decades. Data privacy regulations such as GDPR represent a necessary turning point for the digital advertising industry. A new era is upon us now. Consumers now expect choice and control over their data and digital advertising experience. Brands and agencies who put user choice at the centre of their ad strategy will thrive over the next decade, those who don’t will struggle.”
Traceable consent is a global industry imperative
Pepe also believes that traceable consent will be one of the hottest topics within the digital advertising industry in 2020, and beyond. “For decades the industry has turned a blind eye to the ways in which consumer data is obtained. As such, most of the data being used to fuel vendor technology today has a layer of mystery covering it. When, where and how was it collected? Was it taken with consumer permission, or not?” says Pepe. “This is no longer acceptable, or indeed legal. Being able to unequivocally prove the traceability of consumer consent is mandatory. Any advertiser or agency spending money with ad tech partners, should seek proof that the vendors they work with comply to all global privacy laws.”
As GDPR increases in importance to the industry, new regulations in other territories are set to emerge in 2020. Greenwell says that Initiative handles any local nuance by leveraging its local talent. “This is to ensure that what we do is not just legally correct, but also the right thing to do, both from a cultural and regulatory standpoint. This isn't a new challenge though. It's just one digital advertising didn't have to solve until privacy laws came to regulate the industry. When you look at traditional advertising mediums, most of them require an independent governing body to approve the ad before it can be seen by the public. Then, the time and place of the ad placement needs to be carefully considered to comply with the specific markets regulations. Now compare that to the effort required to get an ad live in the almost entirely self-regulated online video space...”
Data protection and privacy: the way forward
There were clear commonalities across all the industry leaders we spoke to. Shifting from data-driven to choice-first is the only way to build trust and ensure consumer privacy is respected in the digital advertising industry. GDPR has clearly been a crucial stepping stone to a fairer, choice-driven industry, but this is just the beginning. In 2020 data privacy regulations will continue to get stricter, with more sanctions being enforced, and will become a major global challenge for brands, agencies and publishers. Giving users choice and control over their data, privacy and advertising experience must therefore become a priority if they want to survive.
Raphael Rodier, CRO, Ogury