Will the GDPR be the end of programmatic advertising?

The GDPR has been a hot topic of debate since it was enforced mid last year. The GDPR, short for the General Data Protection Regulation was the new legislation of data privacy passed in Europe. At its core, the GDPR seeks to protect user data and implement privacy control over businesses and other third party organisations who may use it for lucrative purposes. Essentially, it is to implement boundaries and laws that govern the way in which personal data can be used in a capitalist digital economy. With stricter guidelines around personal data privacy, many organisations and global platforms such a Google and Facebook have been making continual changes to their privacy policy to avoid any breaches to the GDPR. These organisations have been precariously balancing on stilts in an effort to avoid massive disruption in the space of digital advertising, more specifically, programmatic advertising. 

Programmatic advertising is, in simple terms, the automated buying and selling of ads that depend on a variety of user data to serve the most relevant ads. As such, because algorithms and automated systems govern which ads are placed where, data is a sine qua non in ensuring success. Therefore, the ads placed are only as good as the data provided to make decisions.

With the growing demand for data privacy and the implementation of the GDPR, it begs the question, will the GDPR be the end of programmatic advertising?

The short answer is, it’s complicated. However, one thing is for certain: The GDPR changed the rules of the game and will and has been impacting programmatic advertising massively. 

The Opt-In Strategy

With the GDPR in effect, online businesses have to explicitly ask for permission from users to grant 1st to 3rd parties access to their personal information. A recent study from PageFair conducted a survey on how many users will consent to tracking and the numbers aren’t wholly in favour of digital marketers. In fact, only 23% said yes to providing access to 1st party tracking and only 3% agreed to give access to tracking for other websites. 

What does this mean for targeted ads? A focus on segmentation.

If your brand is looking to target women, you can segment your audience to women who reside in Singapore, who shop at Zalora, buy their morning coffee at Starbucks. Why? Because that segmentation fits thousands of women and you can’t pinpoint to one person specifically. That way, you’re skirting past any breaches to the GDPR because you aren’t after the explicit details of a user on the web. 

Transparency Matters

Post-GDPR means one thing: transparency. That means each company wanting to process personal data of a user must have a legal reason to do so. As such, transparency becomes an underlying factor that cannot be ignored. Any online entity interested in gathering user data must have explicit permission from the user and be clear about what they intend to do with the information. These must be backed by legal agreements that hold companies accountable for the information they receive. The details of the legal agreements are lengthy but here’s a  TL;DR version: They must ensure that the information is safely kept within the limits of the company and the user is aware of how the information is processed at every turn. Not to mention, geographical limitations must be taken into consideration (i.e. data entering and leaving the EU). 

Consumers are not completely resistant to relevant and targeted ads.

It’s no surprise that users would pick a targeted ad to a generic irrelevant one. Nigel Jones, former head of Legal for Google addressed this issue by stating that relevant ads are much better for the user in terms of a web experience. For instance, if someone is interested in bicycles, they don’t want to be served ads about for cars. That’s a loss not only for the advertiser but it hinders the user experience. As such, it’s a price of privacy users may be willing to pay but it’s important that the user is aware of exactly how much privacy they have to give up in order to have a targeted web experience. 

The bottom line: The GDPR won’t be the end of programmatic advertising but it will change the face of it

It’s safe to conclude that programmatic advertising will still continue to prevail and the stats are in favour of it. More than two-thirds of advertising the US alone is programmatic. The key is to focus on consent and transparency so that the user can actively opt-in. The biggest takeaway is creating a trust-based relationship in order to leverage the power of programmatic advertising in a post-GDPR advertising sphere. 

A final note from the experts at Digital Squad, a programmatic advertising agency Auckland

Programmatic advertising is fast, efficient and gets your ads to the right people at the right time. Make sure you’re avoiding breaches to the GDPR and any other regulations by getting the help of experts in the field of programmatic. The team at Digital Squad, a leading digital marketing agency Auckland can help you set up successful ad campaigns. Contact us for a coffee and a chat.