Daily Management Review

Global Online Advertising Upset By EU's New Data Law


08/23/2018




Global Online Advertising Upset By EU's New Data Law
The new data privacy regulations of the European Union have put in jeopardy a number of smaller tech firms that track people online while it has strengthened the position of tech giants like Google and Facebook with respect to the online advertising industry that is worth about $200 billion.
 
Under the requirements of the General Data Protection Regulation (GDPR) that was implemented in May this year mandates tech firms to seek permission from users to make use of personal data among other measures which was aimed to protect personal information in the age of the internet,
 
There are hundreds of companies that obtain and make use of user data from websites to develop consumer profiles of individual consumers– with or without explicit permission from the users or the site owner. 
 
That group of companies have now come under pressure because of GDPR as they now need to get the consent of each and every individual user to do business. some ad tech firms are being pushed to leave the Europe altogether because they cannot ensure that every stage of the supply chain conforms to GDPR requirements even though sites often ask users for permission on behalf of the ad tech firms which directly use the sites.
 
On the other hand, tech giants like Google and Facebook are likely to benefit from the concerns about GDPR because they have a loyal user base who are more likely to provide consent to use of their personal data on these sites and therefore would aid the US tech giants to continue to gather and analyze large amounts of GDPR-compliant data which would be p[aid for by advertisers.
 
It is also likely that reader loyalty would be retained by big publishers such as national newspapers and such publishers believe that they would ultimately be able to charge advertisers more for making use of online slots because they can ensure that the data being used are compliant with the new EU rules.
 
“It’s challenging for the digital ecosystem,” said Mark Read, joint boss at the world’s biggest ad agency, WPP.
 
“But if consumers feel confident that their data is being protected and they understand how it is being used and it’s done with permission, ultimately that should be a good thing for clients and for us,” he told the media.
 
This situation has led to some of the ad tech firms leaving Europe altogether. For example, ad firm Kargo  has left Europe for now because the company was not sure how the GDPR would be applied, said the company founder Harry Kargman to the media.
 
“There is too much uncertainty,” he said. “And I don’t think (that will change) until they apply it in specific cases.”
 
Operating ad businesses in Europe have also been stopped by Verve - a firm that aids advertisers in targeting consumers on mobiles on the basis of location and Drawbridge  which is a cross-device user data firm.
 
Larger advertisers have also felt the hit.
 
For example, one of the top five advertising firms in the world - Publicis of France, has said that the pressure of the new regulation is being felt by it.
 
“Advertisers were cautious about spending money in supply chains that they weren’t absolutely sure they could target safely or legally,” said Steve King, CEO of Publicis Media.
 
(Source:www.reuters.com)






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