The General Data Protection Regulation and its Effects on the Programmatic Growth in the UK

    Programmatic Marketing, GDPR, Global Data Protection Regulation, UK, Europe, ICO, Information Commissioner’s Office (ICO), Ad-tech, Integral Ad Science,
    The General Data Protection Regulation and its Effects on the Programmatic Growth in the UK

    The UK is the world leader of programmatic ad trading. The GDPR enacted in May 2018, was expected to create a massive backlash against programmatic trading in the UK. Experts speculate on why these predictions failed.

    The GDPR was going to bring a heightened awareness of privacy among customers and more scrutiny of ad tech than before. Marketers are becoming cautious about playing “fast and loose” with consumer data. While the initial effects were felt, the longer-term impact on programmatic ad spend has not been genuinely substantial. Programmatic is the rule in the UK that has been for some time. Nine out of the ten digital display ad pounds will be spent programmatically in the coming year, and that proportion will only increase in the years to come. Growth is slow, though, and some inventory will always be traded traditionally.

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    In 2019, approximately 90% of digital display ad expenditure was transacted programmatically, with spending totaling up to $7.74 billion. Publishers and brands are increasingly favoring control and safety in the automated advertising space, particularly as the result of the GDPR. Private marketplaces and direct programmatic deals have thus grown faster than open market trading. However, programmatic continues to take the significant share of the overall market—65.5% this year, expected to rise to 68.6% by 2021. Social media ad expenditure underpinned this growth, given that it’s exclusively traded via direct means.

    This year polls by Ipsos for the Accenture Interactive and Interactive Advertising Bureau (IAB) had brought their programmatic buying in-house. As per their research, 67% confirmed that they agreed with the statement that they had multiplied their programmatic spending post-GDPR. This is mostly in line with the European average. A measly 5% disagreed—a percentage lower than the European average.

    Much of the changes that happened are related to the transactional mix. The trust in open exchanges has been compensated for by growth in programmatic direct and private marketplaces. Marketers aren’t bothered about the challenges of programmatic trading anymore. According to the Integral Ad Science report, 45.5% of UK digital media professionals confirmed targeting the correct audience as a significant challenge presented by programmatic advertising. Not far behind were ad fraud, brand safety, and viewability.

    However, programmatic trading in the UK isn’t a big issue in these areas like other countries. Viewability rates, which were a point of contention for programmatic buys, appear to perform reasonably well for traditional vs. programmatic buys in the UK. Integral Ad Science H2 2018 data, for example, revealed that rates for programmatic ad impressions across purchase devices and methods were often as high as for direct publisher buys.

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    So, despite all the controversy surrounding GDPR and the impact on the programmatic, industry may be witnessing lasting effects. Ad tech shouldn’t get too comfortable. In June 2019, the Information Commissioner’s Office (ICO), responsible for implementing GDPR in the UK, published its “Update report into ad tech and real-time bidding.”

    This report outlines the concerns that ICO has with the creation and sharing of personal data profiles brought in, especially by real-time bidding practices. This was passed to the ad tech sector players for the response to be further reviewed by the end of 2019. They are not happy with the way ad tech is managing GDPR and are essentially asking them to be stricter shortly.

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    In the next two years, consumers who have consented to be targeted based on data are going to become rarer, which might make them more expensive.