Data privacy legislation: what display advertisers need to know
The effective use of data sits at the heart of any marketing strategy worth its salt. The last decade saw the rise of big data and a race among marketers to reach new customers, grow business and send sales into overdrive.
The end of the decade also saw significant changes to data privacy laws. In this article we explain why data-privacy is needed, and the impact data privacy legislation is having (and will have) on display advertising. Plus, what you can do to ensure your display ads continue to deliver the biggest impact in the context of heightened data privacy.
Data-driven marketing is a catch-all term and means different things to different marketers. Essentially, it’s the practice of putting large amounts of data into segments to target both potential and existing customers in a relevant and engaging way. In a nutshell, it empowers as marketers to put the right message in front of the right people, at the right time.
Despite growing concerns among consumers as to how and where their data is used and stored, a recent Econsultancy survey of thousands of marketers globally found ‘data-driven marketing which focuses on the individual’ is seen as being the single most exciting opportunity in the marketing industry.
But is this bubble about to burst? 2019 saw the first major fines handed out by the ICO (Information Commissioner’s Office) in the UK for GDPR (General Data Protection Regulation) infringements with fines totalling nearly £300 million given to British Airways and Marriott. Alongside this, the clamour from consumers regarding concerns on how their data is used is growing. While Google has followed in Apple’s wake will phase out third-party cookies by 2022.
What is ePrivacy Regulation?
Then there’s upcoming ePrivacy Regulation (ePR) to factor in. Seen by many as an extension of GDPR, the ePrivacy Regulation will apply to any business providing any form of online communication service, using online tracking technologies, or engaging in electronic direct marketing.
The aim of the regulation is to protect personal data and privacy for individuals. It’s not yet known to what extent ePrivacy will impact data-driven marketing. However, when viewed in the context of the above factors, it does mean as marketers we need to think long and hard about how they use data.
Like GDPR, this is something we shouldn’t be scared of. GDPR gave us the opportunity to ‘clean house,’ to follow best practice, and to improve the way we communicate with customers and potential customers. It forced us to be better, to create more relevant and engaging content. And to focus on giving our customers a great experience when they interact with our marketing materials.
The same applies now for display advertising. The way the most popular browsers handle cookies is changing. Indeed, ePR will pursue a ‘consent-first’ model meaning the use of third-party data will become more difficult, and you’ll need to become more transparent over how you use customer data. However, this gives brands a fantastic opportunity to build stronger relationships with customers, and become thoughtful and creative in their advertising.
Why is data-privacy legislation needed?
According to Justin Schuh, Director of Chrome Engineering: “Users are demanding greater privacy – including transparency, choice and control over how their data is used – and it’s clear the web ecosystem needs to evolve to meet these increasing demands.”
The speed of the development of technology and the ways we can use data has outpaced the legislation surrounding it.
GDPR was designed to supercede the Data Protection Act (DPA) of 1998. An act which was created long before we witnessed the data revolution sparked by the mass use of the internet. The DPA rapidly became outdated, unfit for purpose and unable to cope with technological development. As such, the aim of GDPR –and now ePR – is to give individuals more control over their personal information. As well as simplify and modernise the protection of data.
Transparency and consent
From a consumer’s standpoint, the two key points surrounding data privacy are how their data is collected, stored and used. Plus whether, or how their data is shared with third-parties. And, according to data protection platform, Varonis: “Transparency in how businesses request consent, abide by their privacy policies, and manage the data that they’ve collected is vital to building trust and accountability with customers and partners who expect privacy.”
“But wait,” you might be thinking, “why do we need more legislation, didn’t GDPR cover all of this?” You’d be forgiven for thinking this is the case. In reality, while GDPR is the largest data regulation of its kind, it’s also confusing. Parts of it are messy and, for some experts, it doesn’t go far enough.
Consumer protection groups in Europe say ePrivacy should be a vehicle for further strengthening the data protection framework put in place by GDPR and data-driven business models need closer checks to protect consumers and ensure people’s rights are respected.
What impact is data privacy already having on display advertising?
Of all the big tech giants – Amazon, Apple, Facebook, Google – there’s only one that makes the majority of their money through selling their own devices… and that’s Apple. The others – to greater and lesser degrees – rely on ad spend and data to drive their revenue.
It’s why Apple was in a position to make the first move in the battle for transparency over data privacy. With the launch of the iPhone X, Apple announced a new feature for Safari: Intelligent Tracking Prevention (ITP).
ITP limits the ability of website owners and advertising platforms to track across domains via cookies. Websites that load scripts or images from other domains will be classified “using a machine-learning model”. Cookies from these sites will stop working for tracking purposes 24 hours after the user’s first interaction with the cookie. Furthermore, cookies are automatically removed after 30 days if there’s no additional interaction.
Firefox behaves in the same way. And with Google announcing changes to the way Chrome handles cookies (the first significant changes have already come into force), marketers who rely heavily on retargeting and behavioural targeting are having to rethink their approach.
Reducing the reliance on personal data
It’s why contextual advertising is making a big comeback. And the good news is the potential it has to reward savvy display advertising is, arguably, greater than that of behavioral targeting, as it uses both AI and algorithms to place ads based on sentiment and intent – not past behaviours.
But, more importantly, it doesn’t rely on personal data to serve up ads. The only information the ad tech performing contextual targeting uses is the content of the webpage. And this is to find the most appropriate banner ad for the page.
The upshot is, over time, you’ll be able to develop a better understanding of where to serve ads. As well as, improve both the relevance and impact of your ads.
What does the future of display advertising look like?
If it doesn’t already, your display advertising experience is going to have to leave a lasting impact. This means it will need to be creative, dynamic, and engaging. Lazy display ads with the same, tired messaging will die-off. Bombarding viewers with a single, stale message is no longer the answer.
What’s more, at its core, good marketing comes down to building strong relationships. And, like at the start of any relationship that’s going to flourish, consent is everything.
Consent means putting the customer front and centre, then building your marketing experience around them and their wants. And, once you have their consent as to how you use their data, it gives you everything you need to create more meaningful, relevant and engaging display advertising experiences for them.
Display advertising with a lasting impact
As Andy Houstoun says in The Drum: “The new dawn has brought brand experience and creative relevance back into sharp focus. It will be a mixture of embracing legislative change, giving the customer more transparency on their data. And enhancing interactions so that your permission to use that data is not taken away. With consent, your hand is being forced to build longer and more meaningful engagements through intelligent display programs that deliver real customer lifetime value.”
Key points to consider are:
- Being creative with your ads in order to stay relevant and engage your targets.
- Know where the data you use comes from – especially if you’re working with agencies.
- Be transparent with your data privacy policies.
- Make contextual targeting work for your brand.
- Research and test the best ways to get consent and opt-in from your customers.
- Create ads that stick in the memory. These are creative, and engage your target audience, making them take action.
Finally, it’s more important than ever before that you have full control and visibility over your digital advertising. You need to understand where your data comes from, how you use it and be transparent in both cases. This level of transparency forces everyone to be better – be they an agency, ad tech or brand.
And, with the key focus being on building strong relationships with your customers, having creative control of your ads through a creative management platform is a must and will give you the power, at speed and at scale, to deliver the right ad, to the right viewer, at the right time.