New European privacy and data regulations are looming. But the answer to whether they will help or hinder publishers depends on who you ask.
The General Data Protection Regulation, which prevents brands from using a person’s data unless they have explicit permission to do so, could send more ad dollars to premium publishers that are more likely to obtain user consent than lower-quality publishers. However, it’s also possible the GDPR will have a negative effect on any publisher that relies on programmatic advertising because the regulations will make it harder for advertisers to measure conversions, which in turn will lead ad buyers to reduce their spend.
There are a lot of gray areas regarding how regulators will apply the GDPR when it becomes enforceable in May 2018. Here’s a breakdown of how the new rules could benefit or harm publishers.
How the GDPR could help publishers
If regulators force publishers to use intrusive messages — like pop-ups or interstitials — to get user consent, then publishers that users regularly visit could benefit from the regulation, said Yves Schwarzbart, head of policy and regulatory affairs at Interactive Advertising Bureau U.K. The idea is that users will spend their time on fewer sites because having to deal with the annoying prompts will only be worth it if a user plans to regularly visit a particular site. For the random cat videos and listicles users land on through social media or search, putting up with the prompt isn’t worth it, so users may eschew those sites in favor of publishers they regularly visit.
One source from a comScore 200 publisher believed the GDPR will benefit his company. Since GDPR reduces the amount of user data advertisers have access to, it will force advertisers to buy ads on sites with recognizable brands rather than target audiences whenever they wind up on the web, which should send more ad dollars to premium publishers, the source said.
“The GDPR, if it works like it should, will force publishers to fire ad tech and normalize their relationship with readers,” said Doc Searls, director of Harvard University’s ProjectVRM, a research project that examines how users can take control of their relationships with tech companies.
How it could harm publishers
While a select group of publishers may benefit from audience opt-ins and an industrywide reduction in retargeting, many publishers that rely on ad targeting will struggle to maintain competitive CPMs in an environment with stringent privacy controls, Schwarzbart said.
The regulations might also inadvertently give Facebook and Google even more control over digital media, said Dave Morgan, CEO of ad tech firm Simulmedia. Google makes most of its money from search, where it relies on keywords more than an individual’s information. On Facebook, logging into your profile and accepting the platform’s terms is already a core part of the platform. For these companies, getting users’ permission to use their data isn’t as big of a roadblock as it is for publishers.
Eric Berry, CEO of native ad platform TripleLift, said the GDPR could lead to a reduction in programmatic ad spend because ad buyers will struggle to measure whether their ads lead to purchases. There’s uncertainty about how the law will be enforced, but if users have to give consent to individual publishers, demand-side platforms and attribution vendors, the attribution companies won’t likely have enough data to make accurate measurements, which will lead ad buyers to shift their dollars to other marketing tactics. This would hurt publishers that rely on programmatic ad revenue, he said.
Although digital advertising has become too reliant on intrusive ad targeting that leads users to block ads, advertiser KPIs change slowly, so the GDPR will most likely hurt publishers, said Paul Bannister, evp of CafeMedia.
“As much as I would love to figure out the right way that major brand advertisers can effectively spend their money in digital, they’re not moving over as fast as everyone wants,” he said. “That leaves digital in a place where, right now, it needs to rely on ad tech and [ad targeting] to make money.”