philip lelyveld The world of entertainment technology

Stronger Privacy Laws Could Save Advertising From Itself

For more than ten years, an ad network called The Deck showed the world that digital advertising could be different. The service displayed only one small ad per page. Its parent company, Coudal Partners, vowed not to collect personal data. Instead, it carefully selected both the publishers and the advertisers it worked with, cultivating a collection of relevant ads for an engaged audience. The Deck was, in short, exactly what most people would want in place of today’s nightmarish advertising ecosystem.

But last month Coudal Partners announced that it’s shutting the network down. The company blamed the ad industry’s tectonic shift of funneling dollars to Facebook and Google and away from other platforms. Advertisers are drawn to the two tech behemoths precisely because they each collect an enormous amount of user data and can theoretically serve ads to targeted audiences. And now ad networks that value privacy are casualties in a battle where gobbling up personal data is routine.

last year, the European Union passed a sweeping set of data privacy rules called the General Data Protection Regulation. The new rules, scheduled to go into effect next May, will require all companies serving EU residents to get explicit permission from those users for ad-targeting purposes. The rules also require that companies allow EU residents to view the data about them that’s been collected; update or remove that data from those companies’ servers; and even transfer it to other companies. Companies that violate the rules could end up paying out as much as four percent of their worldwide revenue.

The great promise of digital advertising was that sponsors would finally be able to know, with great precision, how many people actually saw their ads...

What digital advertisers soon realized, however, was that even though huge numbers of people might see an ad, a small percentage of those people would actually click on those banners.

The led to the birth of a huge ecosystem of ad-tech companies dedicated to collecting, selling, and mining personal data to find users who would be more inclined to engage with an ad. The trade-off was advertisers lost control of where their ads appeared, and publishers gave up a big chunk of their ad revenue to middlemen.

“We’re all wasting way too much time and money on a media supply chain with poor standards-adoption, too many players grading their own homework, too many hidden touches, and too many holes to allow criminals to rip us off,” Procter and Gamble chief marketing officer Marc Pritchard said in a speech at an Interactive Advertising Bureau event earlier this year. Pritchard gave the digital advertising industry a year to clean up its act, after which he said Procter and Gamble, the world’s largest advertiser, would begin pulling its business from ad brokers that aren’t sufficiently transparent in their dealings.

US. President Donald Trump signed a resolution just last month preventing the Federal Communications Commission from forcing internet service providers to seek permission from users before using their web browsing history for ad-targeting.

According to a survey by YouGov and the Huffington Post, 72 percent of Republicans believed the FCC rules should have been allowed to go into effect, as did 71 percent of the public overall.

See the full story here: https://www.wired.com/2017/04/stronger-privacy-laws-save-advertising/

Stronger Privacy Laws Could Save Advertising From Itself