Regulation is something that often impacts the advertising industry, and as digital targeting evolves, we see more regulation come in, particularly as it relates to privacy. The General Data Protection Regulation (GDPR), is the latest to be introduced. It prevents brands from using a person’s data unless they have explicit permission for any EU citizen.
The impact on the mobile market is particularly high as publishers gather so much information from users based on multiple parameters to inform focussed targeting, such as location and app usage. Therefore, those publishers not prepared for the introduction of the GDPR could see an impact on business performance.
The industry view is we could see an increase in ad spend to premium publishers that are more likely to obtain user consent than lower-quality publishers. Additionally, it could negatively impact any publisher relying on programmatic advertising as the regulations will make it harder for advertisers to measure conversions, leading to advertisers reducing spend.
Ad tech companies powering advertising offerings are often based in the United States, and the regulations will affect revenues. According to Seb Joseph at Digiday, “Having just a single user in the European Union for which (a company is) not GDPR-compliant means 2-4% of their global revenues are at risk.”
Yet some companies are delaying preparations because the regulations are not necessarily simple to fully comprehend. After all, these are sweeping regulations that have 99 articles and 173 recitals.
A breakdown of potential impacts is useful for publishers (and advertisers) to consider, including the thoughts of INMA blogger Ben Werdmuller.
How GDPR could help publishers:
- If regulators force publishers to use intrusive messages to get user consent, then publishers users regularly visit could benefit from the regulation, according to Yves Schwarzbart, head of policy and regulatory affairs at Interactive Advertising Bureau UK.
- The idea is users will spend their time on fewer sites because having to deal with the annoying prompts will only be worth it if a user plans to regularly visit a site.
- Since GDPR reduces the amount of user data advertisers have access to, it will force advertisers to buy ads on sites with recognisable brands rather than target audiences whenever they wind up on the Web, which should send more ad spend to premium publishers. This could potentially mark a shift away from programmatic audience targeting.
How GDPR could harm publishers:
- While a select group of publishers may benefit from audience opt-ins and an industry-wide reduction in retargeting, many publishers relying on ad targeting will struggle to maintain competitive CPMs in an environment with stringent privacy controls.
- The regulations might also inadvertently give Facebook and Google even more control over digital media, according to Dave Morgan, CEO of Simulmedia. This will happen for Google via search, where it relies on keywords more than an individual’s information. And on Facebook, this is via login profile information where accepting the terms is already in place.
- GDPR could lead to a reduction in programmatic ad spend because advertisers will struggle to measure whether their ads lead to purchases, according to Eric Berry, CEO of TripleLift. There’s uncertainty about how the law will be enforced, but if users have to give consent to individual publishers, demand-side platforms, and attribution vendors, the attribution companies won’t have enough data to make accurate measurements.
As a brand, it is essential to be aware of these impacts, and how advertising plans might begin to change. For example, what if a publisher cannot package up audiences for advertisers to target? Or if they must seek explicit permission?
From a publisher point of view, it’s important to plan for the impact and not become a victim of “the myths” as well as ensuring technology partners are taking steps to prepare.