How can the Adtech industry adapt to comply with new and increasing regulatory burdens such as GDPR?
Over the last ten years, the world of advertising has changed enormously. We no longer just refer to ‘advertising’, but the sector covers reems of advancements creating subsectors such as ‘advertising technology’ (Adtech) which is all about the tools, analytics, and software that companies use to track and inform digital advertising and consumer behaviour. This has enabled businesses to be more intelligent in how they approach the desired audience and to therefore be more efficient in where money is spent in engaging with them.
As the world has become predominantly digital, so has the way we consume adverts and information. Having data to understand our audiences across all sectors but particularly where money is being spent on advertising is vital for running effective ad campaigns, capturing consumer attention, and maximising ad spend. By better understanding behaviours and patterns, companies can advertise to the right audience at the right time and win more business.
In the UK, adtech companies have capitalised on increasing web traffic and the ever-growing demand for tailored advertising over the last couple of years. As the time we spend online continues to increase, and businesses across the globe desperately attempting to increase revenues to pre-pandemic levels, the adtech industry could have a very lucrative future.
Challenges within the sector
Despite the thriving nature of the sector, there is a genuine question around whether it is possible for the Adtech industry as it currently operates to comply with all aspects of new and increasing regulatory burdens such as the GDPR. The complexities of the Adtech ecosystem, especially in an industry powered by cookies, where known or inferred information about the user and their interests is used in order to show them ads they might be interested in, and the multiplicity of platforms and intermediaries that are often involved in the delivery of those ads, present a real challenge to online vendors and the Adtech platforms seeking to align with GDPR principles. The lack of clarity between the Personal and Electronic Communications Regulations (PECR) and the GDP is also an additional challenge for the industry.
In September 2018, simultaneous complaints were filed against Google and other Adtech firms with the UK’s data watchdog (Information Commissioner’s Office-ICO) and the Irish Data Protection Commission alleging that there is a ‘systematic data breach at the heart of the behavioural advertising industry’. At issue are the Real Time Bidding (RTB) systems which underpin Adtech. The concerns were around RTB being a mass broadcast mechanism which gathers more information than is required for targeted advertising which is then sent to a wider range of third parties for purposes over which neither the initial advertiser nor the data subjects have any control.
Advertisers rely on the RTB process to maximise the value of their bids, because the visitor data enables them to target their advertising in channels that are most relevant to each individual visitor. These could be sensitive information including data on health, religious and political affiliations, sexual orientation that individuals might not prefer to share with third party organisations without consent. The complexity of the Adtech ecosystem, the number of different stakeholders- publishers, vendors, data brokers- in the RTB system and the data journey involving a large supply chain makes it particularly challenging to comply with GDPR.
The ICO is seeking answers to address this issue raised by privacy campaigners by working with a myriad of stakeholders, but the important question prevalent is whether a one size fits all solution would ease the tension between GDPR and Adtech.
The real solution, however, lies in innovation. As a creative and innovative industry, we anticipate that new ways of doing things will be found which can ensure that advertising remains effective for companies and protects consumer data. As R&D and innovation experts, it’s a sector that we find really exciting and whilst the red tape of regulation may be frustrating, challenges can often create the greatest ideas. It’s certainly one to watch!
Insights from Iliass Ikhanjal, Software Consultant, Leyton UK
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