How Changes to User Privacy Affect Advertisers

In recent history advertising has changed from broad and general targeting such as audiences based on tv programming or general magazine reader demographics, to specific data points on individuals in the digital world. We believe this is a positive for both the advertisers and the audience. This way the advertiser can target the people most likely to purchase, and the audience sees ads both relevant and specific to them. The challenge lies in this question: How much is too much information for an advertiser to have on an individual?

As consumers, we want to give away as little information as possible about ourselves to people who will exploit that data for our hard-earned dollars. On the other hand, if we’re going to see ads, we want to see ads that are of interest to us. As advertisers, we have one goal, to put our ads in front of people who are most likely to purchase. It’s a common debate and there isn’t a right answer. In this post we will explore the recent privacy changes that affect our ads, and what, if anything can be done about them.

Data Protection and Consumer Privacy

Some of the most prominent changes in recent history are GDPR in 2018, CCPA in 2020, and the most recent iOS14 updates in 2021. While there are many updates in between, these are the biggest changes that advertisers and advertising platforms (Facebook, Google, TikTok, etc.) face.

Most prominently, users will need to specifically opt-in to sharing their personal data with advertisers, versus the current opt-out model.

GDPR (General Data Protection Regulation)

In May of 2018, the EU enacted the biggest change of its time to consumer data protection. It is a set of rules outlining the governing process for personal data within EU member states. While the protections apply to EU citizens, the rules govern anyone who may process or store the personal data (think contact or payment information, social posts, IP addresses, and more). Consumers have the following rights under GDPR:

• The right to be informed about the collection of their data.
• The right of access a copy of their data.
• The right to rectify or complete any incorrect or missing data.
• The right to erasure, or the right “to be forgotten”.
• The right to restrict processing or data suppression. Meaning, the data can be collected and stored but not used in some circumstances.
• The right to data portability allows consumers to obtain and use their personal data for their own purposes.
• The right to object to processing of their personal data, such as direct marketing.
• Rights in relation to automated decision making and profiling.

The most obvious part of this change is the warning all websites have now which informs the consumer how cookies are used to track your movements on the website, and it prompts you to opt-in or opt-out of tracking. When opted into, this then gives advertisers permission to show this person ads based on the information collected. On the other side, changes also include removing people who request “to be forgotten”, or who object to processing.

For more information on GDPR, please see more information here.

CCPA (California Consumer Privacy Act)

CCPA went into effect on January 1, 2020 and remains one of the US’s most significant data protection policies to date. Simply put, California Consumers have the following rights:

• Right to Know what personal information is collected, used, shared, or sold.
• Right to Delete personal information held by the business.
• Right to Opt-Out of the sale of your personal information.
• Right to Non-Discrimination in prices and services should any of the above rights be exercised.

There are many intricacies with the Act that we won’t go into detail about here, however it is significant to note that these policies do not apply to all businesses as GDPR does. However, if a company is in compliance with GDPR, they are likely already in compliance with CCPA. Like GDPR, this Act applies to the citizens of California, not just businesses based there, so anyone who fits the business criteria and is collecting data of CA residents, will need to be compliant if your company fits the criteria.

Facebook ads in California have seen the biggest performance hit from these ads, because Facebook is rewarding companies who are compliant.

For more information on CCPA, please see more information here.

iOS14

While not an Act or continental regulation, Apple’s iOS14 changes are a sign of more regulations to come. It will take effect early 2021, and likely have an effect on your ads across platforms. The iOS14 update will require apps to show a prompt to users asking if they want to allow the app to track their personal data or prohibit collection. If users opt-out, this means we are no longer able to include them in specific targeting.

When users opt out of tracking this does not mean they will stop seeing ads, but the ads they see will be less targeted to them. iOS14 changes are predicted to have a significant effect on advertisers potentially increasing the cost per conversion and reducing the potential audience size. Additionally, device-level retargeting will not work for users who opt-out of sharing their information.

Ad platforms such as Facebook, Google, TikTok, etc., are still working through these changes themselves and find ways to still provide positive results to advertisers. As we said in the beginning, there is not one solid solution or work-around for these updates, but we have to be adaptable, as this is the boat we are in, whether we like it or not.

Facebook has already made updates in accordance with the changes, altering the attribution window for all campaigns to be a default 7-day click at the ad set level. This is much lower compared to the former 28 day click, 7-day view default previously at the ad account level. Additionally, Facebook warns that as people opt out of tracking custom audiences and website custom audiences (i.e., uploaded lists or retargeting for website visitors) will likely decrease.

It appears that Audience Network (primarily appearing on apps) and app-install campaigns will be the most-affected conversion goal because they will now have to rely on Apple’s SKAdNetwork API to report insights. This means that there will not be real-time reporting, as data may be delayed up to 3 days. Additionally, for these ads, statistical modeling may be used to account results if the campaign has more than one ad or ad set. Further reporting breakdowns for app installs will not be supported, and the attribution window will be that set by the Apple SKAdNetwork API.

More information on how Apple’s changes affect Facebook here.

Facebook is not the only platform affected by these changes, though they seem to be the most unhappy with them, Google outlined its plan to work with the iOS14 changes through AppTrackingTransparency (ATT), which is Apple’s API for triggering the IDFA opt-in notice so they can continue to collect user data. Google also notes that developers may add a pop-up before the ATT notice to explain how the data is used and the benefit to opting into personalized ads.

More information about Google’s recommendations for iOS14 here.

What Does all of this Mean for Advertisers?

Advertisers have no choice but to follow all regulations, acts, and laws put into place by any controlling government of the consumers whose data they collect. While this is not a new issue, however it is becoming more and more widely spread, especially since the most recent iOS14 changes are forcing the hands of advertising platforms around the globe.

These changes do not render advertisers powerless. Much of the time, there Is a lack of education surrounding why it is beneficial for consumers to opt-in to targeting, so in addition to following the regulations, you can provide additional information to the consumer for them to make a more informed choice. Google notes that some apps may choose to show an explainer message prior to Apple’s prompt.

At AVX Digital we are working with our platform representatives to stay updated on changes and necessary implementations for our clients. Rest assured we are watching your ads closely and making optimizations as necessary to maintain results.