The catch-22 of data privacy regulation
Privacy regulations are coming, and walled gardens are writing the laws.
According to the New York Times, tech giants Google, Facebook and Amazon spent a combined $55m on lobbying last year, more than double their combined spend in 2016.
A year out from GDPR in Europe and closing in on California’s consumer privacy act and the inevitable federal legislation, the advertising trioply is essentially helping to write the laws that are supposed to put them in check.
Attribution modeling is at the mercy of privacy regulations
In a discussion on audience targeting during The Drum’s Programmatic Punch in New York, Spring Lake Equity Partners founding partner Dan MacKeigan said: “You have to look at who will have the most influence on the regulators, and in my mind it's the big platform companies. They will probably benefit from regulation.”
Gartner analyst and research vice-president Andrew Frank said these giant walled gardens have created an environment where smaller companies are “more cautious and at risk if they use personal data.”
“It's created higher walls around their gardens,” said Frank, who sees this continuing in the US. “There's a lot of regulatory momentum and the fact that these companies are likely to be able to influence the direction of that momentum suggests that they're likely to continue to dominate the rule-making environment.”
Frank described this as a “catch-22” of privacy regulation, where the rules set in place to reign in the likes of Google and Facebook only serve to benefit them, and the data behemoths then turn around to influence legislation further.
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Antitrust regulation could prove to be the only defense against Google, Facebook and Amazon’s seemingly insurmountable collection of data. As calls to break up the tech giants intensify, MacKeigan said, for example, forcing Google to divest from Gmail could level the playing field.
“If they are forced to divest Gmail, then it completely breaks down whole first-party data, because they get first-party data primarily because you're in Gmail and you don't realize that you're opted-in to every other piece of Google. If you have to divest the [email service providers], then that breaks down your whole system,” said MacKeigan.
In its pitch as a privacy-first company, Apple unveiled its own sign-in feature that seemingly offers the same internet-wide, opt-in tracking functionality that would benefit the company’s first-party data collection.
For now, if marketers believe the likes of Google and Facebook are to remain in control, Frank suggested to focus on “walled garden-based attribution”.
“You aren't going to able to resolve identity between the Google world and Facebook world, so you're just going to have to do attribution as those you are dealing with separate countries,” said Frank.
In general, Winterburry Group managing director Michael Harrison said advertisers can't "pass up" good data on the way to great, as aggregated and probabilistic data sets are still useful attribution models, just at the segment level.
"We're just not getting down to the granular level we have right now," said Harrison.