'Misguided legislative efforts' risk harming both privacy and advertising
State of Data 2022 (Part II) report prepared by MediaScience and released this week by IAB presents results of an analysis of how changes in privacy legislation, pending end of third-party cookies in Chrome and online platform policies are affecting the use of data by advertisers.
Troublesome issues identified include:
- Loss of 50-60% of reliability of third-party identifiers because of actions of Apple, Firefox and others
- New or updated privacy legislation coming online in California, Virginia, Utah and Connecticut
- Probable necessity of developing a "one-size-fits-all" approach to handling data across jurisdictions
- Insufficient education of consumers as to how advertisers use their data
- First-party datasets representing only about 20% of consumers
- Third-party data collection tools priced ot of reach of smaller publishers
- Closer scrutiny of the use of email and IP addresses for marketing
- Missed opportunities in capturing data first-party audiences not logged in
- Low buy-side awareness limiting use of seller-defined audiences
Recommended actions for industry:
- Provide users with an opportunity to choose the kinds of data they want used for advertising
- Be aware that privacy legislation is the #1 threat
- Balance investments between technology and human capital
- Further invest in first- and third-party data beyond email addresses
- Pay equal attention to not-logged-in audiences
Some top-level industry executives interviewed in this study said it's too early to tell how upcoming changes in data privacy requirements will affect their revenue, but others estimated losses of as much as 25%.
Comment: There's plenty of recent evidence showing that consumers find digital ads uninteresting or even annoying. (See links below.) That item in the IAB report about educating consumers about how their data are used and giving them choices of what data to provide seems to be at the heart of this issue. Let's everyone work on that.