Privacy has been in the spotlight more than
ever before. Tech giants like Facebook and Google have been scrutinized in
congressional hearings, fined, and are under investigation from the Department
of Justice, dozens of states attorneys general, and the Federal Trade
Regulation has taken hold via GDPR. Now on the immediate horizon is the California Consumer Privacy Act, which is set to go into law Jan. 1, 2020. (And other state laws are on the horizon.) Though it is less comprehensive than GDPR, CCPA is the first significant data privacy law in the U.S. and will therefore set a precedent for how companies comply to privacy regulations stateside. It also effectively ends what has long been an environment of self-regulation.
These laws certainly impact how players
outside the tech giants operate, including client-side marketers and agencies.
Media buyers and sellers, for example, are left to make sense of how to handle
the demands of reaching targeted audiences at scale while also not alienating
potential customers by mishandling data or using it in a way that makes them
Privacy is, unsurprisingly, among the top concerns for executives in the industry, given the potential to affect how they target their advertising. A survey from Marin Software polled marketers across categories and asked them what challenges will most impact their businesses in 2019. Atop the list was data privacy, tracking restrictions and ad blocking.
CCPA allows people to know who is collecting their data, what is being collected, and with whom that data is being shared. Businesses of a certain size will be required to comply. As of now, the CCPA is not yet finalized, though approval of amendments are expected to finish this month.
What the ad industry wants is one national law. Four industry trade groups, including the ANA, formed a coalition called Privacy for America to lobby to “Congress to ensure federal online privacy legislation is less strict than a law scheduled to go into effect in California in 2020,” according to Reuters.
Dan Jaffe, group executive vice president of government relations for the Association of National Advertisers, said of the ANA’s problems with CCPA: “At the most fundamental level, it is that it is a single state law. We don’t think that privacy rules work on a state-by-state basis. The business has already gone through a substantial amount of fragmentation and that is only going to increase in 2020 unless there is a federal law passed that preempts state laws.”
Last year, tech giants like Google, Facebook,
IBM, and Microsoft began lobbying the Trump Administration for a gentler
federal law – one that would override CCPA. However, unless something major
happens, it looks like the CCPA may set the tone for how online companies
approach privacy in the U.S., at least in the near term. And the marketplace
will have to respond quickly.
But despite cries for a federal law, CCPA will
soon go into effect. So, what are agencies and marketers to do in the near
While companies have already had to make
adjustments to comply with GDPR that can apply to CCPA, CCPA is “still a bit of ‘wait and see,’ given that
there are still negotiations taking place and amendments being made,” said Jon Taylor, SVP of Global Data Strategy at WPP media agency Essence.
However, the looming California regulation
will almost certainly affect media buys and plans, according
to Taylor. This could result in more contextual-based ads (versus behavioral targeting based off
cookies) and ads that are targeted to more general audiences. “Agencies and marketers
need to be able to work more seamlessly across a spectrum of aggregated,
normative data and granular, programmable data where it’s available. This may
result in media plan that feature more generalized targeting options, but these
are hopefully informed by more robust insights.”
For agencies, said Taylor, the challenge is around vendors and “predicting how these same new rules and regulations will affect partner offerings. For instance, the advent of GDPR saw some companies completely pivot their business models (Tapad), change the way data could be accessed and used (Google) or even exit the Eurozone completely (Verve).”
agencies and marketers work together, Taylor says that “more marketers should bring their legal
practitioners into discussions with their agencies around privacy issues” to
ensure enforcement is happening everywhere along the supply chain. After all,
“agencies have excellent points of view of these issues, and a broad market
view, but are also not legal practices.”
and third-party data
of agencies and marketers working together to ensure compliance, there is the
issue of the growing importance of first
party data. Tanya
Forsheit, Partner and Chair of Privacy and Data Security Group, Frankfurt
Kurnit Klein & Selz, told the Wall Street Journal that transparency will be required, and that
marketers and other companies like ad-techs, agencies, exchanges and intermediaries,
will be among those held accountable. “Marketers will have to rely more on
first-party data, the information they get from having a direct relationship
with the consumer. They will rely less on third-party data that they don’t
Some, however, are concerned that the reliance on first party data resulting from privacy protections will only strengthen the hold that Facebook and Google have on the marketplace. “It’s actually concentrating power and market leverage within the walled garden, because they have certain advantages, direct relations with consumers,” Adam Solomon, CMO of marketing technology platform Lotame, told Ad Age.
“The effects of regulation mean that the walls of the
walled gardens only seem to get higher. But conversely, the likelihood that
those platforms will ever share data between them – for the benefit of the
marketer – only seems to get lower… In a sense, our industry is at an all-time
low in terms of data portability,” said Taylor.
About the author
Maureen Morrison is a writer and consultant, working
with agencies, startups, publishers and brands on editorial and communications
strategies. She previously was a reporter and editor at Ad Age for 12 years,
covering agencies, digital media and marketers.