The Real Impact of Data Privacy on Digital Marketing

How the bid stream is impacted by regulatory privacy changes and why it is important to B2B marketers

Many in the B2B space don’t know what a bid stream is or why it’s important to media performance. But with changing privacy and data regulations impacting digital marketing around the globe, it’s important to understand what these changes mean, what the bid stream actually is, and how that can impact your media activity. 

In this article, we will discuss the real impact of GDPR, data, and privacy regulation on the programmatic bid stream and what it really means for marketers. This is especially important for B2B marketers that, whether they know it or not, use programmatic technology for ABM, content syndication, and other tactics that rely on cookies for targeting and segmentation.

But first, let’s define the bid stream

It is essentially a feed of inventory combined with a collection of millions of data points from searches and content consumption to unique IDs and publisher pages as well as user preference insights that are used in an exchange or auction for the purposes of buying and selling media programmatically. 

Some of this is RTB (real-time bidding), but not all of the inventory is processed this way. Many IO-based buys, ABM campaigns, and content syndication use programmatic delivery on the back end for execution. And most of this historically revolves around 3rd party cookies which we all now know is going away quite quickly. 

As such, many believe regulatory changes to privacy are going to kill programmatic by choking the bid stream of usable data and thus changing how the digital media system operates. 

Let’s be clear though, the bid stream will never go away. It is required to validate won and lost bids for media within the auctions. Plus certain data parameters are still required for the delivery of the ad itself after the request from the server. 

So even though privacy changes are stripping out a lot of data, there is plenty of legitimate usable directional data left over for those that understand how to use it.

How to leverage your 1st party data and ABM activity for better B2B marketing while being privacy compliant

The short of it is consent and 1st party data will become mission-critical and quality content will drive performance. 

Buying will become less about behavioral segments and other data points gathered from 3rd party means. Many of us in the industry have questioned the quality of this data anyways. So while these are big changes, they are better for the publishers, brands, and the people we target by providing a cleaner better digital experience. 

Many of us believe less is more and there will be a return to less intrusive old school marketing best practices executed in new ways using programmatic delivery. This is what I call going back to the future of marketing.

At the heart of digital media is a value exchange between a person and a publisher subsidized by advertisers in order to deliver the desired content. 

Along the way this got convoluted. There has been a diminishing value and accuracy of this data going on for some time now and the user experience has suffered for it. 

This value exchange should have been clearer to start with. The whole point of regulating privacy is to undo the crap the industry has fed itself for years now. Crap in and crap out. And usually the culprit of underperforming media. 

Digital media supply is sort of like working a farm. The natural quality of what goes into nurturing harvest matters and crops need to be rotated to keep the ecosystem fresh. Similarly with data, where and how you get it matters. It is important to nurture and maintain the database with quality controls and refresh it regularly. A more friendly ecosystem can and will thrive coming out of this. 

Marketers and publishers just need to change their focus and be creative about data application. Content experiences become a more open exchange or trade as part of a building relationship between brands and people. B2B has always excelled here and actually might be best suited to a digital media ecosystem not reliant on 3rd party cookies. This consent for quality content and experiences is the cornerstone of any good ABM program.

Going forward brands and publishers, as well as their agencies, have to comply and prove they are adhering to new privacy regulations. Ultimately providing people more control over their digital privacy through certain flagged data points. 

Essentially, even if a person is unaware that their details are being collected without consent, well then … It’s still illegal. 

So this begs the question: 

“How do you educate a population that has been trained to click yes to everything and give away their privacy for free content for decades?” 

Ultimately most of us have no idea how our data is bought and sold on the open market to power digital advertising and media buying. 

CCPA and especially GDPR gives those personal bits of data identity rights to the consumer within the bid stream. This means personal data only becomes usable with explicit consent.

Consent is one large grey area

What is the right way to get said consent and then prove you have consent? Tough question. This also doesn’t even then address the task of separating that from all the other data identifiers being scraped within the bid stream and applied to digital marketing in a variety of legitimate ways as aforementioned.

To make it more complicated, in the CCPA regs, the AG explicitly makes it clear that sharing data is the same as selling data. This is in complete contrast to the stance that the IAB has historically taken.  

In this instance, the CA AG has proven to be more powerful than self-regulation within the industry thus invalidating IAB’s framework for service providers that many have followed to date. 

And yet we all still get annoying cold calls and texts. Especially now with politics being front and center here in the US. When the Do Not Call database went into effect there were hundreds of thousands, probably millions of consumers in the US who opted out. 

Yet, we still get 4-6 spam calls on the phone per week and about the same on mobile. We also still get a ton of direct mail in the physical mailbox too. But should we also be getting rid of all postal addresses, all credit scores, all 500+ data points held by Equifax and Transunion, etc? Can all the 3rd party cookie alternatives being considered ever actually meet the legal requirements being set forth? These are just a sampling of the questions all of this raises. And no one has all the answers yet. 

Even after all the recent announcements, most recently Oracle removing 3rd party data from EMEA starting this month, and all the benefits of this privacy awakening, the challenge is that many question the actual impact regulation can have and how enforceable it is, while others question whether policy goes far enough.

The fact is though, GDPR is proving enforceable, albeit slowly. At sites like EnforcementTracker you sort by value and filter by date for yourself.

Digging into EnforcementTracker’s data, you can see that as of September 2020 the cumulative total of fines leading up to the month is 362. Enforcement thus far has fallen under “insufficient legal basis” for usage and “non-compliance” with the principles of GDPR. 

Let’s look at what some of the numbers say in just a couple years:

  • Thousands of cases under review
  • Hundreds of “publicly available” decisions have been made 
  • In some markets, it’s a weekly occurrence
  • Millions in monetary penalties across Europe and the UK

Define a clear path to consent for your own company

Another part of the challenge is the reality that people cannot freely consent to something they don’t understand. It gets complicated with such fragmented media consumption across device, player, OS, provider, and producer. 

The simple solution is that consent needs to be clear with a strong value proposition to make the exchange of content and consent. Then the tactics and tools become great for marketers with good first-party data. Marketers need to be proactive and do the right thing. I have often felt that just because we can, doesn’t mean we should. 

Once you have clearly defined your path to consent, smarter media is how you activate this to drive pipeline and sales

What we do at BusinessOnline is help our clients get in front of this with quality content and experiences, smart targeting, and personalization that allows us to better leverage the bid stream for performance media with a clear cut line of consent. Often this means starting small and amplifying scale as you strengthen your 1st party database versus starting with more volume based on 3rd party segments and quickly optimizing down to what works (even if we don’t really know why). 

This is what we call making your media smarter. 

Your media gets smarter the more holistic your view. Treat your media like investments and your hedge funds. You use data and insights to optimize your investment portfolio. B2B performance digital comes from having a contextual understanding of your media activation as a portfolio. Deconstructing how and why various media performs creates efficiency and insights that can transparently compensate for a lot of the impact of these changes. 

B2B marketers are in a unique position to leverage their ABM activities in innovative ways to be proactive, privacy compliant, and provide better customer experiences

Given that most people simply “accept” when they visit a web site, most brands have changed notifications and so they have the consent needed for GDPR and others. 

The advantage for B2B marketers is that we can take this a step farther and map those cookies to CRM so you know what each is worth and what segments they are in.

At the risk of repeating myself, this is good ABM. A key element of turning this disruption into an opportunity will come in the form of systems integrations and data interoperability on the back end in order to have the right data structure to power the technology needed to feed smarter media campaigns in a privacy-compliant manner.

This will also help you identify buys signals better and map them to specific media touchpoints. Just remember we are bidding for the chance to serve messaging – so it better be good and relevant.

So What Will Happen Next:

  • Third-party data is going away 
  • Ads become content (entertainment even)
  • Fewer ad units, higher CPM’s, better quality  
  • Clients will pay more for audiences
  • Transparency in data and numbers will compensate
  • More and more digital inventory will become available
  • New distribution ad formats and channels
  • Consent will be collected when it’s given
  • ABM grows in importance
  • Brands will need to get better with their 1st party data

There was an interesting article in TechCrunch earlier this year that supports these observations.

NPO, Netherland’s public broadcaster, released reports showing sustained revenue growth after turning off various 3rd party data solutions and focusing on contextual, composition, reach, and other tactics.

This is in contrast with most claims that these privacy changes will kill digital publishers. And if it is sustained, advertisers and audiences are likely happy too. This says to me that gutsy publishers and marketers can embrace this, create better experiences, and still use programmatic and the bid stream as part of an overarching marketing strategy. 

ABM is an ideal approach for a proactive consent-driven 1st-party data model to meet today’s and tomorrow’s evolving privacy compliance guidelines. What is dead is bad marketing. Innovative B2B marketers can future proof themselves against this if they start now and go back to the future of marketing.

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