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What are the key factors we need to know about privacy in the digital space right now?

Privacy and the impacts on digital media continue to be front and centre in Clients' minds. This week, we discussed the basics with Ryan Sullivan, our programmatic media partner at Bench Media. This is the first in our series of Planning for Digital Success, as we attempt to dispel some of the myths around digital and programmatic, so keep an eye out.

Q: What are the key factors we need to know about privacy in the digital space right now?

Ryan: "It’s safe to say that marketers have been riding an ever-changing privacy wave over the last couple of years, a wave that has been driven by declining consumer sentiment towards the ad industry itself. Events such as the Cambridge Analytica scandal alerted consumers to the nefarious ways their data was being collected and used without their knowledge or consent. In the wake of this, both consumers and governments demanded more transparency in how consumer data was collected, used and shared across the web. Policies such as GDPR, CCPA (California Consumer Privacy Act) as well as many similar privacy codes were brought into effect around the world. The changes we’re now seeing as marketers are the industry’s response to the global pressure."

 

Q: So let's talk about the first changes from Apple that caused major concerns 

Ryan: "Apple's iOS 14.5 release heralded a new privacy policy (the App Tracking Transparency framework), forcing all apps to ask the users' permission upfront whether they wanted to be tracked across the web for personalised ad purposes. As you can imagine, roughly 80% of consumers have said no to this. With Apple accounting for 55.8% of all mobile users in Australia, this has a pretty significant impact on ad revenue, mainly felt by platforms such as Snapchat, Youtube, Twitter and Meta. With an estimated $9.8billion in lost ad revenue forecasted, Facebook launched scathing attacks on Apple's decision, positioning itself as "fighting for small businesses everywhere." If we pretend Facebook's shareholders are small businesses, then sure."

 

Q: And then Google wanted to get involved?

Ryan: "In June 2020, Google announced that they would deprecate all 3rd party cookies from their Chrome browser by 2022, which has since been delayed to 2023. This is the bigger of the two announcements, in my opinion. What this means for the consumer is that when they visit any website, no 3rd party organisation will be able to capture or track their data for any purpose elsewhere across the web. This was Google's response to privacy concerns and brought Chrome into line with other browsers such as Firefox and Safari. Considering that around 80% of advertisers use 3rd party cookies in their digital advertising mix, this announcement sent the industry reeling. However, Google quickly realised that things are easier said than done, and ever since the announcement, they have been plagued with problems. Their first solution (FLoC) was quickly mothballed due to privacy concerns. Their second (Topics) has received a reasonably frosty industry response with fears of further monopolisation and issues with transparency."

 

Q: So the outcome isn't necessarily great for all digital publishers?

Ryan: "As it stands right now, this doesn’t benefit a free open web. So before the privacy warriors start claiming victory over the big-bad internet, let's not fool ourselves into thinking that either Apple or Google had altruistic motives here. These announcements were, quite simply, strategic power moves by two of the largest tech firms in the world. For example, Apple's strict privacy policy doesn't apply to their own apps, just everyone else's. While Apple says it abides by the same strict guidelines, they continue to freely capture its users' data for the purpose of "creating a personalised experience." Similarly, Google's first two iterations of cookieless tracking solutions (FLoC and Topics) seemed to benefit Google exclusively, to the detriment of the open web."

 

Q: Okay, but are these privacy improvements ultimately good for the consumer? 

Ryan: "Ultimately, I'd say yes, these changes are positive for the consumer. Consumers should have control over how their data is collected and used. However, I feel that there's a disconnect between two overlapping topics here - privacy and personalisation. These haven't been adequately communicated to the consumer, and unfortunately, I believe they will result in an inferior web experience overall."

To explain what I mean, let's consider these two studies:

"Results of a recent study from Cisco show consumers are interested in protecting their privacy, TechRepublic reports. The study indicated that 86% of consumers "care about data privacy" and want more control, and 79% of consumers are willing to invest time or money to better protect their privacy." 

However… 

"From web to mobile and in-person interactions, consumers now view personalisation as the default standard for engagement. Our research shows that 71% of consumers expect companies to deliver personalised interactions. And 76% get frustrated when this doesn't happen."    

 

Q: So this is where the disconnect occurs?  

Ryan: "Yes. It is exactly the ability to collect and track consumer data that allows brands to provide the curated online experience that consumers demand. Also, neither of these privacy changes actually reduce the volume of ads a user is exposed to. The result is that consumers will now experience an unwelcome increase in untargeted ads and also arguably at a much higher frequency than they had previously." 

 

Q: In Summary, where are we up to right now?

Ryan: "OK, so to recap yes, what we know so far is that these are huge changes that unquestionably disrupt the status quo of the digital marketing industry. Privacy policies are changing almost daily and we all need to be able to roll with the punches for now. 3rd party cookies were an imperfect solution that we all became far too reliant on and there are so many alternatives to cookie-based targeting available to us today. Once the dust finally settles I think we’ll realise it was precisely the big shake-up we could all have done with."

 

Ryan Sullivan Senior Partnerships Manager - Strategic Accounts Ryan Sullivan is Senior Partnerships Manager - Strategic Accounts at Bench Media

 

 

 

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