The US is expected to adopt a national data privacy law soon; experts predict something good coming in with it like – growth of GDPR. The core of these initiatives is centered on encompassing consumer consent.
Experts are concerned about one unintended by-product of making customer consent mandatory. Policies would concentrate commercial control over the internet into a handful of top industry players.
Consent is the foundation for building up the new walled gardens
Though data consent sounds like privacy, it is an ultimate barrier to choice.
Google, Facebook, Amazon, and Apple are already in a position to demand consent from consumers as a prerequisite for using their products and information. Marketing and ad-tech vendors such as SSPs, DSPs, DMPs, and attribution companies are necessarily transparent to consumers. So, when asked for consent – will consumers grant use of their personal information to an unknown, untrusted entity? Firms that provide vital commercial services by attributing and connecting audiences with opportunities may have zero leverage in a permission-based regime. This may well be a particular competitive disadvantage for comparatively smaller brands.
With a group of first-party data assets in hand, the tech giants will become the stewards of most of the entertainment, advertising, and online purchases. Meanwhile, with minimum ability to reach consumers in a qualified manner, agencies, brands, and ad tech vendors will become serfs in this walled garden, or they’ll fall out of business. With the sales channel consolidating, so will the leverage of these top brands.
Advertisers become frenemies inside cooperatives
This forecast is equally bleak for the majority of brands. Tech giants will defer priority to the high spenders, and emerging brands will have a harder time gaining and reaching the desired market share in a cost-efficient manner. For a top brand like Netflix or Nike that can leverage through their ad spending, multiple brands are too cash-poor or too small-sized to merit the exclusive access to the consumers that the tech giants can sell.
To get access to distribution and customer data, the direct-to-one brands will either have to buy their way into the walled gardens or they’ll have to find another path to get first-party consent.
One possibility is that brands might take a page from the direct mail playbook. Recently, advertisers pooled customer receipts by brand and product to allow the data to be resold by others in non-competitive markets. Out of necessity, competitors can become frenemies united against the walled gardens.
The solution could be an independent privacy law for online marketplace compliance that is more transparent and efficient than the current model.
The open question of third-party data
Third-party data is sourced mostly from public files like the voter census and the registration. This data is necessary to create demographic modeled attributes that allow forecasting mundane tasks like home values, discretionary income, and purchase preferences. The data is needed to enhance and improvise customer lists, and heavily use it to qualify and source potential prospects. This publicly available data is safely fuelled by entrepreneurial efforts to break into a new market segment and allow existing advertisers to identify new business opportunities.
Prospective laws of consent playing with third-party data
The new wave of privacy laws is expected to exempt third-party data collected from public sources until it is online, after which consumers have a choice to give consent. Such an exemption is a critical tool for brands, independent ad tech vendors, and advertisers alike. Analyzing the law around third-party is as uncomfortably close to NAI, IAB, and DAA recommendations on choice.
To save third party data, the public must understand how it works and what it is. Provisioning clear laws to specify the use of third-party data without consent would require an advertiser to have a permissible purpose demonstrating an opportunity for the consumer.