Global Privacy Initiatives Could Leave Marketers And Publishers In A Deeper Black Hole Than They Think

The Sell Sider” is a column written for the sell side of the digital media community.

Today’s column is written by Jay Friedman, president and partner at Goodway Group.

The General Data Protection Regulation (GDPR), the United Kingdom’s Information Commissioner’s Office (ICO) and, soon, California seem to be doing their best to rain on the programmatic parade. Giving consumers the ability to accept or reject cookies isn’t enough, they say. Instead, accepting cookies must be a “clear positive action.” So long prechecked boxes and hidden reject buttons.

Publishers have a few tough years ahead as they test and learn which combination of identification, data storage and access produces the best outcome for their businesses and readers. Advertisers will also continue experiencing pain around the implications of rejectable cookies. But hidden within the United Kingdom’s ICO statement lies a landmine with deeper consequences for marketers than anything in ad tech.

Throughout the past two years of GDPR prep and implementation, most marketers I’ve spoken with have been reasonably positive. “We’ll figure out how to still do great targeting regardless of what regulation we end up with,” is the general sentiment. In part, that’s because it was assumed that analytics services such as Google Analytics, Adobe Analytics, Chartbeat or Crazy Egg would be left alone and continue to run as they always have. But that is apparently not the case.

So many marketers live and die by their analytics, not just for website measurement but for media measurement. Consumers rejecting these cookies will cause blind spots for marketers and publishers and challenge them in four ways.

Site measurement

Consumers who reject cookies are not a random sample because they demonstrate some like-minded behavior to reject cookies in the first place. By removing a non-random set of users from site analytics, publishers will be forced to make decisions based on what they know, which may ultimately optimize a site’s experience away from those who reject cookies. This, plus having less complete analytics, could harm publisher revenue and leave publishers without a way to test and learn their way back.

Yield management

Publishers will be forced to make tough decisions about which content is truly free, behind a freewall where registration is required or behind a paywall. Every incremental step required by a user before viewing content creates user drop-off the publisher wouldn’t have had otherwise. If sites make users register with their data and sign in every time, they will lose users. If they don’t make users sign in, they lose visibility and metrics. Publishers would do well to immediately start testing to find the ideal spot that balances the two.

Media measurement

Many organizations use their analytics tools to measure advertising effectiveness. This is unfortunate because the value in advertising, other than paid search, is in the impression, not the click.

What matters now is that the marketers who do use analytics software for media measurement will now be unable to measure within a set of users and user sessions, but those marketers won’t be spending any less money on media. If a marketer spent $1 million last month and measured 100,000 user sessions as a direct result, they’ve grown accustomed to paying $10 per visit and further calculating the cost per sale. If 20% of these sessions are now unregistered, the measurable cost per user session (and presumably sale) increases 25%. This will be a tough one to explain to the board.

Consumer privacy

As many bosses have told me, “Don’t complain unless you have a solution.” But that’s exactly what consumers, and now legislators, have done. They’ve told the industry what can’t be done, and because they haven’t provided a solution, I don’t believe consumers will end up with any more privacy than they had before. In fact, identifying users may become more deterministic and persistent by increasing the login frequency and requirements. As more publishers store identity site-side as opposed to browser-side, the information publishers have on consumers is no longer controlled by the consumer.

I believe we’re in the bottom of the first inning of the privacy game across the globe. There is far more to be discovered and understood than has been accomplished. As with any sweeping action, there will be unintended consequences. It’s up to publishers and marketers to play out these war games now so they don’t find themselves on their heels down the road.

Follow Jay Friedman (@jaymfriedman) and AdExchanger (@adexchanger) on Twitter.

1 Comment

  1. Mark Simpson-

    Great article Jay! I agree that we are still very early on privacy, the majority just don't seem to care about the daily hacks and data leaks unless it truly personally affects them somehow. There are some solutions out there like the amazing Brave browser and its Basic Attention Token which, as they grow, could lead to a radicial shift in thinking. New metrics, no more view-through conversions, new styles of advertising, user data kept on device and matched anonymously with an ad catalog, etc but agencies will have to be educated, take risks and see results.

    Reply

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