GDPR will rip the ad ecosystem apart, and maybe that's what our industry needs, writes WFA Stephan Loerke.
Share this post
GDPR will rip the ad ecosystem apart, and maybe that's what our industry needs.
That's because it will focus advertisers' minds and encourage them to take even greater steps to control their digital supply chains.
As of May 25, when the General Data Protection Regulation comes into force, brand marketers who use or collect people's data in the EU will be potentially liable for data collection and storage practices right across their value chain. That's true whether marketers are based in the EU or not.
The trouble is that right now too many people don't fully understand that value chain. So, if 2017 was the year that digital media transparency was the key issue for marketers, 2018 is the year that data transparency provides yet another reason to take back control.
Post May 25, the same absurdly complex and murky ecosystem that has made it more and more difficult to assess the true costs involved in buying video and other digital formats now comes with yet another considerable risk; the risk that their company could be fined up to 4% of global revenue in addition to the obvious risks to brand reputation.
The data transparency required by GDPR means that any company (wherever it is located in the world) collecting personal data from people in the EU will need "specific, informed and non-ambiguous" consent from the "data subject"—that's a real person like you or me.
Smart brand-owners will now be demanding 100% assurances that any party acting on its behalf abides by the law. That means the many third-party ad networks, which have been collecting and trading personal data without ever interfacing with consumers, could be doomed.
It means the end of the data free-for-all, the time when on average, each ad being served involved data that had been touched by up to fifty companies according to programmatic experts Labmatik. Because no company can be in control of such a complex supply chain.
GDPR will have a dramatic impact because it puts the consumer and their preferences at the heart of the relationship with the brand. That matters because when the IAB asked people if they were happy that their data was shared with third-party ad networks, less than 20% were happy with the idea.
It will also require brand marketers to re-examine their first-party data. Many companies sit on vast amounts of data, of varying quality, scattered around the organization, much of it past its sell-by date.
Some serious spring cleaning should already be under way and smart brands and marketers will be taking steps to radically cut the number of parties operating across the value chain and hold them accountable for their data collection practices.
I hope that those smart marketers will not be in a minority—when we at the World Federation of Advertisers asked companies how prepared they were for GDPR in September last year only 65% of respondents said they expected to be fully compliant, with 70% of respondents saying that marketers were not fully aware of the implications.
The doom mongers might argue that GDPR means the end of personalised communication. On the contrary, freely given personal data will become more valuable.
Enticing consumers to share their data with brands, however, will require a transparent and informed value exchange. It's the end of the secret "deep-sea trawling" for data and the arrival of greater respect for the real owners of that data, the people themselves.
GDPR will transform the digital ecosystem and help create a more sustainable foundation for brands to engage with people.
Getting that right means holding every party in the value chain rigorously accountable for their data collection practices. It's shining a welcome light on the data ecosystem.
It's long-overdue but it's good news for people, and, therefore ultimately, also for brands.
This articles was originally published in Ad Age.