Applift Thought Series: Why GDPR May Be a Positive Thing for Ad Tech

GDPR EU data regulations

An edited version of this article was first published in MarTech Advisor.

GDPR is finally here, and while there is no denying it brings challenges for many, but now is not the time to worry or complain. It is time to take action and to consider the positives the new regulations could bring.

GDPR may ultimately be a good thing for the industry because it could weed out players who are unable — or unwilling — to make the necessary investments. To achieve compliance, companies have to check a lot of boxes on the tech side and likely invest in legal counsel, data storage, and new compliance processes. A certain level of professionalism (combined with having the right organizational structures in place) is required.

The new regulations may help the industry giants, Facebook and Google because consumers and marketers are more likely to trust familiar names. But other committed players stand to gain, too. Long-term, the businesses that will win market share are the ones that can stay agile while adhering to regulations. Agility isn’t always easy for large corporations. You need to make quick changes to your tech stack and be prepared to refine those changes, as needed, as GDPR unfolds.

Already, some players in Europe have repositioned or even left the market rather than make the changes GDPR requires. If you are investing in GDPR-related processes and changes, consider it an investment you will recoup. They are necessary steps in building a sustainable business. Be vocal about your plans and communicate your efforts to your clients and prospects.

In case GDPR wasn’t enough, Facebook’s Cambridge Analytics fiasco shed a spotlight on data privacy that consumers, not just marketers, noticed. People are increasingly concerned about how their data is used, which makes data-related policies even more important. An organization’s adherence to data-related regulations isn’t just a way to avoid fines—it is the way to earn people’s trust and position your brand as credible and compliant.

GDPR may help to rebuild marketers’ trust in the digital ecosystem. Brands have been vocal about their brand safety and transparency concerns. GDPR won’t eliminate those concerns, but it could be a much-needed step in the right direction when it comes to advertiser perception. Long-term, ad performance may even improve since customers can more easily opt out of unwanted advertising. The people who opt out would probably have been unlikely to interact with ads, so removing these users could improve performance.

Of course, it is not all rosy. Everyone is facing challenges as it relates to GDPR. In the wake of the regulation, we will probably see an increase in hasty contract adjustments as players scramble to make themselves “nonresponsible.” This won’t help with transparency in the short term. If users opt out of ads in droves, it could cause scaling and targeting challenges and affect how inventory is valued. (Perhaps inventory will become more valuable if supply decreases and performance improves, but that remains to be seen.) We will also see “bluffing,” as some companies will claim to have made the necessary changes, even if they haven’t.

Marketing technology companies should focus on taking swift action, communicating their investments to their client base, and positioning themselves as committed, trustworthy players.

In the end, the cream should rise to the top.

Learn more about how the various different types of data would evolve under the new regulation with our latest infographic, in partnership with mParticle.

To read more industry thought pieces from Applift’s COO, Stefan Benndorf, please click here.