How data regulation can make ads less annoying

By Taejin In, vp of product

Talk to anyone outside of the advertising industry and you’ll likely hear the same gripes about digital ads. Consumers are bothered by seeing a pair of shoes they no longer want continue to follow them across sites. Maybe they already bought an engagement ring, but keep seeing ads from jewelry stores. Or they’re watching a show on Hulu and see the same ad play over and over.

Those who aren’t a part of the ad world don’t understand that these problems are often the result of inefficient retargeting, poor audience targeting or optimizations. They simply think that this is how digital advertising works — and they don’t like it. But as people in the industry know, bad ad experiences are often driven by larger systemic problems around the relevance, freshness and accuracy of the data used to build audience segments.

This is an age-old problem, but trends shaping the ad industry today — particularly privacy regulation like GDPR and CCPA — could finally force a much-needed shakeup to audience composition. The primary benefit of GDPR is that it will force unscrupulous players from the market, shining a light on any bad data collection practices. But it should also create a new era of transparency, data freshness and accuracy across the open web, and a world where ads provide value — not annoyance — to consumers.

The focus on regulation thus far has been on privacy and the right to be forgotten, but the transparency component is incredibly valuable as well. Privacy is important to consumers, but it’s not something you can immediately see. Meanwhile, bad advertising practices are very visible. GDPR compliance and the push for transparency has made it much easier for customers to check how good advertising companies are at putting people in and out of audiences appropriately.

This is important because up until now, there has been no single mechanism for doing this on the open web. And as much as marketers and vendors bemoan the dominance of the walled gardens of Google, Facebook and Amazon, for the most part those platforms provide at least some transparency to consumers around which targeting segments they belong to.

Google’s Ad Settings page allows consumers to view the exact audiences they belong to. Overall, these results show that Google is good at mining web and app activity (when using Chrome), search activity (on both Google and YouTube), location history (from Google Maps) and viewing activity (from YouTube). Facebook is fairly accurate as well, with a reporter recently pegging the platform’s custom audience accuracy at about 65%. And while Amazon isn’t as public about its data yet, the retailer likely has access to the powerful combination of search behavior and purchase history.

The trouble is that these accurate and transparent audience segments are generally only useful within the walls of these platforms. Amazon’s DSP only allows ads that point retail consumers back to Amazon itself. Google 360 promotes its own publisher assets over another. Facebook’s Instagram ads are fantastic, but they’re only useful on Instagram.

While some technology providers are doing their best to score devices in and out of audiences to ensure relevance and accuracy, no single open web player can provide the segment transparency that Google and Facebook offer. Platforms like Oracle and Acxiom have attempted to share the data they have with consumers, but it’s often inaccurate, identifying consumers as both male and female, with household incomes ranging widely from $50,000 to more than $500,000.

While fears that GDPR and CCPA might diminish the amount of data available on the open web are justified — what value does this data provide if it is wildly inaccurate? These regulations can be the catalyst that forces advertisers and tech vendors to pay more attention to how data is used for audience segmentation, adjust their practices so that the segments are more accurate and then actually share that information with consumers.

The industry has long promised a value-exchange with consumers. If advertisers and providers want consumers to opt-in to data sharing in this new regulation-driven era, they need to make sure that value-exchange is a reality, not just a promise. As more parties start focusing on improvements in this space, it’s easy to see future where segmentation becomes exponentially more accurate, resulting in fewer misplaced ads being served to an uninterested audience.

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