Keeping An Eye On The Programmatic Marketplace On GDPR Day

While the inauguration of GDPR is fueling much discussion and many questions about data management, it remains to be seen if an effect will be felt on programmatic ad buying investment levels, and brand media budgets.

At least so far on Day 1, investment levels, bids and CPM ranges in the ad exchange marketplace are looking normal and steady.

At ForwardPMX, we are monitoring the industry carefully, and are in contact with the top MarTech and data companies that we expect will be most likely affected. We anticipate that the most direct way we will see a change will be in the data options used to append targeting layers to media bought through programmatic tactics.

Some considerations top of mind that we are watching closely, include:

How data compilers and direct publisher sources eliminate their exposure to GDPR.
In talking with leading players in this space, we hear consensus that the easiest path to compliance is scrubbing 3rd & 2nd party data of EEA identified users from databases, and that’s where the focus has been.

Whose business operations are changing the most.
The biggest change so far has been with identity graph players. Already Verve and Drawbridge have shut down their European businesses because of GDPR. Neither company has made statements about changes to their U.S. operations in the near future. Recently, Oath has decided to close its Multi-Touch Attribution platform, Convertro.

Changes in data management options.
There will also be a limitation on data appends that could be used to triangulate PII, the first sign of this is the announcement Google made a few months ago stating their encrypted ID data transfer offering would be deprecated from EEA originated events on May 25th, and globally soon.

Challenges with securing consent and potential consequences.
Media publishers are starting to use tools to gain consent from their current audiences, and seeing substantial “opt-out’ rates. Reports range from 15% to as high as 60%. Google’s consent gathering tool (Funding Choices) is in beta, and with some Doubleclick for Publishers and Adsense customers, is also limiting the number of supply chain partners for a publisher to twelve. This can have an impact in the number of DSPs, SSPs, DMPs and other 3rd party companies’ abilities to survive, giving advantages to tech stacks that offer one touchpoint for many services (Google, Adobe, Facebook).

If programmatic buyers see a considerable drop in data availability due to Consent Management Platforms (CMPs) opt out rates, there will be a shift towards promoting other targeting options and inventory such as contextual advertising. Oracle’s acquisition of Grapeshot, a contextual platform that enhances data without using personal data, is just one example of an industry-leading data provider planning for a post-GDPR world.

Another potential outcome is a programmatic landscape broken into two marketplaces: targeted vs non-targeted, from a tracking and behavioral standpoint. Much like viewability options, where you can bid on percentages of viewability, auctions can be separated into verified compliant data targeted audiences and “opted out” audiences.

Facebook

Like media being purchased through programmatic display, the marketplace of Facebook is not seeing changes in investment levels, CPCs or less demand in general, but we are also monitoring closely for changes.

Under the GDPR, Facebook is classified as both a data controller (they monitor and collect information on what you do on and off of FB) and a data processor (when matching a brand 1st party data to its users, and when measuring ad results that take place off of FB), and needs to play both roles in order to fulfill the expectations that we as advertisers have for the platform, as well as the data security its users demand.

Facebook warns that the result for the user is “less relevant ads”.

In the US, Facebook is adjusting its data privacy policies that may be related to GDPR, but are in direct reaction to the fallout from the Cambridge Analytica scandal. These changes include:

• Allowing users to delete their history
• Allowing user to opt out of FB data collection

In both cases, Facebook warns that the result for the user is “less relevant ads”.

For advertisers, that means an unknown amount of spend will be applied to “non-targeted” ads. They have not provided transparency into how they will charge for these ads, how often a brand may serve them, or how advertisers can measure their performance.

We will stay tuned into these changes as they play out over the next several weeks, and beyond.