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ICO report Adtech

Croud’s view on the ICO report into adtech and real time bidding5 min read

5 min read

On 25th May 2018 the General Data Protection Regulation (GDPR) came into effect, designed to modernise laws that protect the personal information of individuals and establish requirements for how businesses process and handle data.

Since then we’ve seen “consent” and the legal grounds for this personal data processing take various forms based on the interpretation from stakeholders across the ecosystem, from publishers to demand side platforms.

The ICO released a report on 22nd June 2019 – which arrived a few weeks before British Airways and Marriott were fined for incidents related to GDPR – issuing a clear signal to involved parties across the industry that lax interpretation is no longer acceptable. The ICO wants to make clear and consistent the difference between consent and legitimate interest, as well as which cookies are deemed essential and which are non-essential.

We’ve identified three key areas the report impacts – programmatic media buying, publisher monetisation and website analytics – which we go into below.

What does this mean for programmatic buying?

  • There are two ways of buying inventory that can be categorised as Programmatic media buying; one is ‘direct’, also known as reserved or guaranteed, and the other is real time bidding (RTB), which is the format used for buying on public auctions and private marketplace ‘invite-only’ auctions.
  • RTB is the form of Programmatic that is called out, and most under threat, in the ICO report. Because of the number of processes involved in RTB, some which are very difficult to expose and understand, it’s likely we’ll see an end to RTB in its current form, due to the lack of transparency available.
  • We expect to see a reduction in third-party data providers, due to many of them obtaining data through implied consent or legitimate interest, and a premium applied to third party providers who have legitimate consent, which is the only option for industry players wanting to make use of this kind of user data.
  • We also expect to see an increase, both in terms of quality and price, in contextual targeting, as this is established upon a user landing on the site, as opposed to any predetermined profiling of the user.
  • What we’re doing as immediate next steps is to identify quality third party data providers, whereby they have an established value exchange with users or publishers directly to ensure legitimate consent is obtained, and work with them on a custom taxonomy for relevant audiences for our advertisers. As well as work closely with our advertisers, search marketing teams, and planning functions to establish core contextual environments we do, and don’t, want to appear in.

How will publishers react, and what impact will this have on display advertising?

  • There has already been an impact on publishers over the last 18 months with changes in how personal data can be shared, and more of a magnifying glass on who are collecting data and the number of tags on publisher sites capturing this data. Many publishers have been ramping up efforts into how they monetize their business outside of selling ad space.
  • Despite this, we don’t see publishers moving away from selling display (or video) ad space completely, but we do see them becoming more sophisticated in how they obtain consent, how they position the value exchange with their audiences, and how they maximise areas such as contextual targeting and on-site image recognition.
  • The overall impact should be a much better experience for audiences, in terms of number of ads on a page, quicker page-load times, and more user-friendly ad experiences in general, which we would expect to have a positive knock-on effect for advertisers buying this space.

What effect will this have on analytics?

  • Interestingly, the report makes reference to other non-essential cookies being prohibited without clear and legitimate consent, and that analytics tags, while providing useful information can potentially not be used for advertising purposes, are not strictly necessary for the correct running of a site or online service.
  • This we feel is the most interesting aspect of the report, having worked in programmatic media for a few years, the general trend towards a more user-focussed and privacy-first ecosystem always felt like a matter of time. But there was always a question mark over analytics tags as their purpose is much broader and has a wider impact on the ecosystem as a whole.
  • This latest ICO report, as well as wording from their blog like “…we recognise that analytics can provide you with useful information, they are not part of the functionality that the user requests when they use your online service…”, seems to have made it clear that analytics tags too will require the same level of clear consent from users.
  • We’re already seeing changes be made by some publishers, only recently The Guardian has updated their app to break down the difference between essential cookies, those used for things like mobile app notifications, and cookies used for performance and functionality, like Google Analytics;

ICO report Google Analytics

Summary

We at Croud believe this is a positive and measured report from the ICO. The goal is to ensure users know how their personal data is being used and by whom, and that there is consistency across the industry in the understanding and application of the law.

These changes will no doubt impact how we target and measure digital campaigns, the ecosystem is always developing and we believe this will lead to new opportunities for advertisers and agencies over time.

While this report is only advisory at this stage, and we’re expected to know a more definitive direction in a few months times, we’re working with our ad tech partners to ensure our approach in-platform, vendor selection process, and relationship with publishers is as future-proofed as it can possibly be.

To find out more about our services or about Croud, get in touch.