Digital Advertising and GDPR: A Growth (and Consolidation) Story

The EU’s General Data Protection Regulation (GDPR) came into effect in May of this year, and it has ushered in a new era of data privacy – granting consumers in Europe a whole new set of enforceable rights around their personal data, including the right to object, the right to be informed how their data will be used, the right to request a copy of their data, and the right to be forgotten (ie. right to erasure).

In the lead up to GDPR day, marketers and ad tech companies who rely on personal data were having nightmares. Never before have individuals had the absolute right to stop their personal data from being used for direct marketing, and never before have companies faced such huge fines for non-compliance – The main issue for companies that sell third-party data is that many have a difficult time meeting the notification, consent, opt-out and erasure requirements, and GDPR places the onus on the business using the data to verify that any third-party data processing is compliant.

Indeed, data brokers and ad-tech firms have become targets of GDPR. Oracle, Equifax, Acxiom, Quantcast, Criteo and Tapad have all recently received complaints. These complaints along with new responsibilities being on placed on businesses have combined to generate fears that digital advertising might grind to a halt. Rather than an overall slowdown though, there has actually been increasing digital advertising sales in the EU. That increase in digital advertising sales in the EU hasn’t been a universal increase, however. Advertisers are spending more money, but they are spending more money with the big three – Google, Facebook and Amazon.

What’s happening? Because of their size, because they are technically walled-gardens, and because consumers will not give up their Gmail and Facebook accounts so easily, marketers are assuming that by consolidating their ad spends with the giants they can remain in close contact with their audience(s), while doing so in a compliant way. These same marketers, like the New York Times’ Meredith Kopit Levien, are noting that any member of the big three (in her case, Google) provides services that historically required three or four advertising technology companies to do so before. GDPR is/was not an opportunity to shutter our marketing organizations and go home. It is/was an opportunity to drive scale, efficiency, and ensure we truly understand our audiences and how they behave.

The question is how? How can you drive efficiencies, scale and audience insights like what Meredith Kopit Levien is articulating in that article? We think there are at least five ways:

  1. Review your traditional segmentation model: How old are the insights you have on your audience(s)? Do you know what they like to do outside of buying your product, being a patient or searching for information on the latest cloud solution? Do you have a plan to proactively collect data on your audience(s) in a compliant way? One of the largely unspoken, yet incredibly important components of GDPR is that it has forced marketers to (finally) put the audience first. Without knowing who they truly are, there is no way your organization can put them first
  2. Review your customer journey: When was the last time you refreshed your customer journey? Was it several years ago as you created new channels in the wake of the social media explosion? Was it a couple of years ago when you launched a new product? Chances are good it’s out of date, which means you are wasting a considerable amount of money developing content and distributing it in places where your audiences are not.
  3. Review your current channel mix: You could certainly do this as part of the customer journey analysis, but it’s critical to understand where you are spending your marketing dollars, whether or not those channels are reaching the desired target audience(s) and whether or not the content is right for that particular channel. Importantly, does your current channel mix maximize your opportunity to deliver a return (ROI) to the business?
  4. Developing a first party data strategy: The latest CMO Survey from Deloitte, Duke University and the AMA shows that marketers will be relying a lot less on third party data over the coming years. It’s likely that’s a result of data privacy legislation, but regardless of the cause it’s important to consider how first party data collection will be done in a compliant way. Will you drive people to your website? Do you have a plan to capture email addresses (compliantly) in 2019? Without a clear first party data strategy – how you’ll collect it, where you’ll collect it from, how you’ll store it, how you’ll remain compliant, and how you’ll use it – chances are good your marketing program will be flying blind in 2019.
  5. Conducting a marketing technology assessment: When was the last time you took a hard look at your marketing technology stack to see whether it was efficient (you didn’t have duplication of capabilities), it drove scale and/or delivering you audience insights? The latest marketing technology landscape from Scott Brinker has over 6,000 tools on it (6,829 to be exact) so we understand if it’s impossible to keep up. Still, though, data privacy legislation like GDPR (or even CCPA) should force a proactive discussion about the tools you are currently using to execute marketing programs.

The end of the year is a great time to explore the above items in an attempt to ensure your marketing programs are as successful as possible in the coming year. The data privacy trend isn’t going to stop, so it’s time to recognize it as an opportunity and get into the game!

This blog was co-authored by Dan Linton, Managing Director of Analytics at W2O.

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Chuck Hemann
Chuck Hemann

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