Data is a very pertinent topic, but do the right executives get it right? The rise of digital marketing and use of data to make it effective has given rise to GDPR – now the interpretation of it a new era in global ad tech lie ahead. Inflexion’s Digital Associates advise portfolio companies on data privacy and share their thoughts with us.

Gone are the days of long, boozy lunches for advertising execs: in 2019, over 62% of global digital advertising was now bought by bidding for ad impressions using programmatic algorithms and technology. This number rises to 87% in the UK and 85% in the US.

The rise and rise of digital advertising has surprised even some of the world’s biggest ad giants. Even behemoth WPP for example didn’t think mobile advertising was ‘a big thing’ 10 years ago. But now it is a $200 billion business globally, and still growing faster than any other marketing medium. It’s been both an opportunity and a headache for publishers, who have struggled for the better part of a decade to generate sufficient revenues from advertising despite valiant efforts to attract and appease advertisers, while keeping abreast of a fast-evolving ad tech ecosystem landscape.

Digital advertising is on the rise, and data is the lynchpin to getting it right.

In a nutshell, digital advertising is on the rise, and data is the lynchpin to getting it right. The data and infrastructure to activate this is underpinning it and is worth around $20 billion in the US, or 15% of media spend going on the data behind advertising on that side of the pond. “It means data is now a strategic topic for CMOs rather than a ‘nice’ to have,” says Tobin Ireland, a technology adviser.

For years there had been a structural imbalance of the ‘share of eyeballs’ and share of media spend. But this equalised in 2018 for the first time with 30% spent on each, according to a Mary Meeker report. Power was been increasingly concentrated in a duopoly of Google and Facebook, though Amazon has since joined to make it a triopoly – but there is still a vibrant independent publisher industry competing for advertising spend.

With the ad tech industry just around a decade old and never expected to be the $200 billion beast it is today, the infrastructure supporting it is neither designed for purpose, well equipped, nor easy to navigate.

Rules of play

The players may be well known, but less understood is how to play with them. With the ad tech industry just around a decade old and never expected to be the $200 billion beast it is today, the infrastructure supporting it is neither designed for purpose, well equipped, nor easy to navigate.

“The ‘problem’ occurs by trying to get the ads to the consumer – the ad tech pipes which sit between advertisers and consumers,” says Tobin. The ad tech is the key, and data is crucial to activating media campaigns. And the small playing field dominated by the triopoly means each player is very powerful.  Google, for example, is the data, publisher and the ad tech. The ability to act as a one-stop-shop may make such firms easier to deal with, but an unintended consequence is that advertisers are spending more money on these firms than on the old guard, including broadsheets such as the Guardian and Telegraph.

“The industry wasn’t designed to reach the scale it is and so the ecosystem needs to change. The value is really consolidating in terms of adspend on google and Facebook,” says Tobin.

Oracle once lived up to its name as the largest independent data management provider, fuelling Google and Facebook, but also powering the media buying of all independent publishers through the open ecosystem of ad tech platforms. But alas the data management giant and has left the market owing to GDPR.

“Reputation matters,” stresses Tobin, reminding us of Facebook and Cambridge Analytica. “It makes a big impact on trust and that really hits the bottom line.  People are waking up to how poorly their data is protected.” The numbers back up his sentiment: 70% of adult consumers in US and UK don’t believe it’s even technically possible for their data to be protected.

Addressing these concerns, GDPR came into effect in May 2018. Aside from an explosion in the number of tick-box requests for site visitors, it’s had little impact thus far: “The ad tech ecosystem wasn’t ready and didn’t believe they needed to change, and because there haven’t been many big fines in first 18 months, many agencies, ad tech platforms, and data providers may be feeling a bit complacent.” This may be about to change. “Now the information commissioner (ICO) is doing a major investigation in the UK and across Europe, and the message coming out of it is that intervention is on the horizon.” He says major fines are expected in the first half of 2020 from some large firms as well as DMPs. In the US, the first meaningful data regulation (CCPA – California Consumer Protection Act) comes in at the beginning of 2020.

While many may have viewed GDPR as a box-ticking exercise, it's about customer experience and accountability going forward.

Accountability

While many may have viewed GDPR as a box-ticking exercise, Chad Wollen argues it is about customer experience and accountability going forward. The founder of the Privacy Experience Agency points out: “Accountability is what is different between GDPR and the previous regulation.”

Despite the word being buried in the regulation, Chad feels it’s the most important change in the latest iteration of the law. Who is accountable to whom, and for what? He reminds us of the anonymous nature most are undertaking the task with. “Companies are installing large compliance programmes with data compliance officers. But who is all of this for? This is what often gets missed. We have to stop thinking of compliance as being for our boards and realise it’s actually for our customers.” Here he reminds us it is about customers, and they are people who need to be considered as such and therefore thought about in all the processes.

We have to stop thinking of compliance as being for our boards and realise it’s actually for our customers.

“These people are prospective clients, and so need to be treated with respect and consistency. Each one really matters, particularly in B2B as there are fewer participants and thus fewer contracts.” The more convoluted companies allow the process become, the more prevalent lawyers may become to interpret – and they may act as a wedge between you and your valued customer.

Chad concludes, “All businesses are connecting things, but there are big risks if they don’t really think about how they are treating people’s data. It needs to stop being a box-ticking exercise and be about treating people like people. Caring about the experience and viewing consent as an extension of the overall customer marketing journey. Companies and the people behind them value respect and trust. By designing the privacy experience properly – companies will achieve higher opt-in rates and gains in customer Net Promoter Score (“NPS”) and trust. Consent becomes a strategic marketing asset.”