GDPR Will Usher in Era of User-Controlled Data. Who Will Survive the Purge?
The GDPR hourglass is running out of sand yet one in four marketers aren’t confident their organization will be compliant by May 25th. With the threat of €24 million fines for failing to comply, offending vendors could be put out of business in a heartbeat. For publishers, it’s critical to vet vendors with whom you choose to work. For DMPs and DSPs that lack a secure and transparent value proposition, the outlook is grim. When GDPR becomes enforceable, it’s likely that many shady players in the supply chain will have no choice but to shutter their doors.
Longer term, publishers should acknowledge that GDPR is merely a steppingstone into a larger trend where consumer consent and user-controlled data are the norm. The model is changing, and for the first time in digital history, consumers stand in a position to dictate the terms of how their data is used in digital advertising. Ultimately, we will build a stronger, more transparent, and more impactful ecosystem.
Impact on DSPs and DMPs
It’s no secret that the vendor landscape is fragmented. Because of fragmentation, the lines are often blurred between who is deemed a processor and who is deemed a controller. As processors, DMPs will have to thoroughly vet their data providers (particularly third party), and ensure complete, universal compliance. This is easier said than done, especially for those who turn a blind eye to less than transparent suppliers. DSPs, in particular will face significant challenges, as they are inherently disconnected from the numerous streams of data they rely on for retargeting. Because of this, DSPs will have to adopt more stringent vetting of data vendors who fill their pipeline and ensure that they do not pass along unauthorized IP addresses through the supply chain.
Impact on Programmatic Advertising as a Whole
Regulation will undoubtedly be felt by those in the programmatic space. There’s been a lot of concern that GDPR and subsequent regulations could mean a death sentence for programmatic. Indeed, the programmatic supply chain will feel the impact come May 25th. However, the grim outlook is focused mostly on shady players who lack a strong value proposition. Post GDPR, it will simply be too time intensive to operate under the current fragmentation of the media buying landscape. Passing vendor inspection from an organization’s “data privacy task force” will be both time-intensive and meritless for unscrupulous players. In the past, anyone with a few executive connections and halfway decent salesmanship could line up a few contracts, thus plugging into the supply chain. Now, it’s just not feasible for an advertiser to manage and authorize 30-40 different vendor relationships. Auditing for those vendors that are both effective and compliant will purge the folks that swallow spend and evaporate ROI.
For publishers, GDPR poses a significant advantage as it will carry out a lot of the workload involved with trimming down the fragmented ad tech supply chain. However, it will be important for publishers to take an active role in choosing responsible partners that take compliance seriously. The reasoning behind this is two-fold. First, it’s obviously important to ensure that you are in compliance with new regulations and not in jeopardy of severe financial repercussions. Second, longer term, consumer consent is now the norm, and maintaining a transparent reputation will help you build trust with your audience.
Building a Better Ecosystem
One of the world’s great wordsmiths sums it up best: “That which does not kill us makes us stronger.” (Obviously, talking about Nietzsche here). Some won’t survive the GDPR purge. But those who carry on stand to capture more market share, and offer better value to the ecosystem. For publishers, GDPR has potential to strengthen your audience relationships.
And for those of us stateside, we have the opportunity to position ourselves ahead of the curve by learning and adapting our business models based on the principles laid out in new regulations. Publishers and vendors will now be held liable to safeguard the integrity and privacy of user data. Media organizations across all levels of the supply chain must now position themselves as responsible, secure and ethical custodians of user data. Google has already taken the initiative to jump ahead of this shift. Last week, Google CEO Sundar Pichai publicly reaffirmed Google’s mission to be responsible stewards of user-owned data.
Looking ahead, the fundamental shift towards user-controlled data is only growing in momentum. We are now expected to take on the role of responsible data stewardship and held accountable to sustain a transparent and secure ecosystem. GDPR is not a death sentence, it’s a wakeup call. Luckily, we’re waking up into a world with a much more viable media model.
Related story: What Publishers Need to Do About GDPR