Privacy piracy: the programmatic Wild West needs to stop!

The days of the programmatic free-for-all and unregulated digital data collection are coming to an end. If the regulatory winds in Europe are anything to go by, agencies and other digital vendors in Australia will need to move away from the conventional programmatic model of complexity and obfuscation, and adopt a new, transparent approach which respects individual privacy.

With Australia likely to implement more stringent privacy regulations in the near future, it is clear that consumer privacy is now at the forefront of the public agenda, and the peddlers of programmatic had better sit up and pay attention. In the face of an increasingly savvy public, the current model of tracking is simply too invasive and, in some instances, illegal.

Programmatic peddlers, bottom feeders and privacy pirates

Consumer tracking and data collection have become so invasive that a recent report from the Information Commissioner’s Office in the UK has stated real-time bidding (RTB) programmatic advertising often borders on illegal.

“… the creation and sharing of personal data profiles about people, to the scale we’ve seen, feels disproportionate, intrusive and unfair, particularly when people are often unaware it is happening.”

While the report was in part a response to the one-year anniversary of the implementation of the General Data Protection Regulation (GDPR) – a European regulation we are yet to implement in Australia – the findings should be considered a shot across the bow for agencies and programmatic vendors Down Under.

The conventional programmatic approach is simply unsustainable, and the only real winners to date have been the agencies, middlemen and bottom feeders, eating into marketing budgets in the name of targeted advertising, and invading the privacy of unsuspecting consumers.

The winners have not been the advertisers, who have to spend up to 70 cents out of every dollar on exorbitant mark-ups charged by the countless digital snake oil salesmen that plague the ever-burgeoning digital “value” chain. And the winners have certainly not been the consumers, who unwittingly sacrifice their privacy and personal information, which is then on-sold to third parties at a hefty profit.

The truth is that the existing model is confusing, complex and opaque, and most consumers do not fully understand just how much personal information they are sacrificing by simply being online. Of course, consumers and regulators are becoming smarter by the day. As legislative oversight becomes more prevalent, we will likely see programmatic evolve towards a more nuanced, less invasive, opt-in targeting model.

There has to be a better way!

Consumers will no longer stand for online surveillance. While this may be bad news for traditional programmatic players, this will likely prove a boon for advertisers. In fact, respecting the privacy of prospective customers should be at the heart of every advertiser’s mission – and not just because it’s a decent way to treat your customer.

Trying to find sneaky ways to target people across a range of sites that, most of the time, are contextually irrelevant to the advertiser, only delivers a bad consumer experience and poor advertising results. Think about it, the RTB environment is currently akin to the most dreaded of advertising formats: email spam.

With privacy regulations like GDPR being rolled out and with increasingly stringent privacy regulations possibly just around the corner in Australia, RTB programmatic will need to change the way it delivers ads. A more transparent, permission-based model will likely be introduced, whereby a brand must first request the attention of an individual consumer for one to one communication.

In the same way, a person accepts friend requests on a social network, imagine if a consumer had to accept an advertiser request before that advertiser could target them individually. This permission-based model would only allow advertisers to deliver advertising to a consumer after that consumer has given their consent, and only on their terms.

A delivery mechanism like this will make RTB far more effective because for the first time ever, the advertiser will have complete visibility over the consumer and the consumer will have complete visibility over the advertiser – with both parties granting the relevant permissions. It will be transparent, open and ethical.

Targeting by this method should be incredibly effective and, as a result, should increase the value of advertising. The outcome will be better results for advertisers, more revenue for publishers and an improved experience for the consumer, without being tainted by any underhanded practices or privacy breaches.

What’s more, by targeting consumers across premium, contextually relevant sites, a real alternative will be provided to Facebook and Google – on both an RTB and guaranteed basis.

A new programmatic era

It is truly baffling that the advertising industry has been free to use third-party cookies to target consumers for so long, unchecked and unregulated. Of course, invasion of privacy is just the thin edge of the wedge. Traditional programmatic systems are drowning in complex legacy issues around viewability, brand safety, unscrupulous middlemen, a lack of transparency and overly complex platforms that are almost impossible to operate. These systems are built to keep consumers and advertisers in the dark.

However, there are signs that the tides are turning. In the wake of numerous privacy scandals facing tech giants like Google and Facebook, public sentiment is shifting. Meanwhile, the introduction of the GDPR in Europe is a potential sign of things to come in Australia. Privacy is the right of every consumer, and if Australian agencies and programmatic vendors continue with their unethical business practices, they may soon be facing liability, lawsuits, and maybe even liquidation. Meanwhile, those who embrace transparency, contextual advertising and permission-based models will herald in the new era of programmatic advertising.

Simon Larcey is managing director of Viztrade.

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