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What the ICO’s reform of real-time bidding means for advertisers

By Ben Wood, Digital Director

Hallam

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February 19, 2020 | 4 min read

In 2019, the ICO announced that they’d identified a range of issues related to the advertising industry's approach to collecting and processing personal data for real-time bidding (RTB) purposes. I believe that reforms following this revelation will affect advertisers and PPC teams in future.

We haven't heard the last of GDPR

Hallam explain what marketers have to gain from adapting to meet new GDPR reforms.

RTB is an auction where advertisers can bid for audiences they want to target through exchanges. These auctions happen hundreds of billions of times every single day; leaking the online habits of internet users into the data broker ecosystem.

The ICO report said that RTB, as it currently operates, is in many cases not compliant with the EU’s GDPR, as well as other privacy regulations.

What’s changed?

The industry was given six months to clean up its act, after which point the ICO said it would review the progress made.

Because of this announcement, there have been various developments and breakthroughs in the advertising industry over recent months - many of which will impact advertisers over the next couple of years.

Google’s recent announcement that it will strip contextual content categories from bid requests is certainly an important statement of intent. Beginning in February 2020, Google will stop including contextual content categories, such as "sport" or "weather", in bid requests. Google cited privacy concerns as the reason for this, as these categories revealed in a bid request can be used to create profiles about individual users.

However, Brave (the secure web browser based on Chromium) has since argued that Google’s removal of contextual targeting categories will have no material impact on the RTB data breach, because Google’s RTB system will carry on broadcasting other personal data that will still reveal the same information.

The current process for RTB entails systematic, privacy eviscerating high-velocity trading of people’s personal data for the purpose of targeting them with ads. Therefore, requesting the industry to self regulate is not exactly going to solve much.

“The future of RTB is both in the balance and in the hands of all the organisations involved,” the ICO explained — as if regulatory enforcement requires industry buy-in. Only time will tell if the ICO can actually enforce restrictions in the industry - at which point, it would mean effectively starting afresh.

What does this mean for advertisers?

This move coupled with the crackdown on third party cookies will force the ad tech industry on a path of significant change over the next couple of years. For advertisers, this may mean less reliance on hyper personalisation and more emphasis on contextual targeting alongside stand-out creatives.

In a privacy-first era, performance marketing alone will not be enough. This is an opportunity for brands to integrate their teams and break down traditional silos between technology, media and creative departments. Advertisers must prioritise creative expertise at the ideation stage, rather than as a bolted-on afterthought.

Ben Wood, co-director at Hallam.

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