How Europe’s new Digital Markets Act will impact marketers everywhere
The EU’s new Digital Markets Act is likely to exacerbate the signal loss caused by privacy-focused changes enacted by the Apples and Metas of the world, explains Goodway Group’s Jay Friedman as part of The Drum’s Digital Advertising Deep Dive. Instead of playing whack-a-mole on signal loss, however, he argues that businesses must take a more comprehensive approach.
The EU’s new Digital Markets Act will disrupt ad targeting and measurement, predicts Goodway Group’s Jay Friedman / Guillaume Perigoi
The EU’s recently-passed Digital Markets Act (DMA) has the potential to completely upend how we think about big tech and the spaces they play in. While the DMA only applies to Europe at this time, there are clear implications to marketers across the globe, and ultimately – as other governments watch and react to its effects – to how big tech operates globally.
To date, brands have thought incrementally about the changes happening across big tech platforms. They have been hyper-focused on specific scenarios, considering, for instance, what might happen if they lose a given capability or data set.
We’ve seen the effect the loss of certain advertising capabilities has had on a smaller scale with recent policy changes enacted by Facebook and Apple’s iOS. Facebook lost the vast majority of its data signals from its network of apps and sites, which, in turn, weakened the accuracy of targeting. As a result, measurement across the platform’s ecosystem became much more modeled.
In the case of Google, were it to lose its cross-service signals between Chrome, Maps or Waze, Search, Display Network, YouTube, Android, Chromebook and its other properties, the results that marketers see today would be largely disrupted.
With the passing of the DMA, this appears to be the reality for which marketers will need to prepare.
Further loss of signals
If we take the example of the signal loss that has occurred between Apple’s iOS and Facebook, the impacts of the DMA on marketers become clearer.
The legislation restricts the sharing of data within big tech platforms. For example, consumers will be prompted to allow platforms to access their data as they go from one Google service to another. Marketers can think of it as a General Data Protection Regulation (GDPR)-style content-based model, as applied to the Google, Amazon, Meta and iOS ecosystems. We don’t often think of the vastness of big tech and how valuable the wide set of signals is. Amazon’s business isn’t solely e-commerce – it includes Alexa, Amazon Web Services, Prime Video, Amazon music, Amazon Pay, Fire devices, Whole Foods and more. And marketers generally benefit from the measurement and attribution data gathered across these properties.
This breakdown of cohesive data-sharing experiences will further restrict the signals that marketers can use to reach audiences, conduct attribution across specific channels and ads and measure the overall success of campaigns. The burden will fall on the brand and marketer to create new strategies to conduct these critical functions.
First-party data and probabilistic modeling
First-party data and the urgency around developing strategies around it are mounting. Most marketers now understand the importance behind these efforts. Robust first-party data strategies will help brands with signal loss from the deprecation of third-party cookies and the impacts of data-sharing among and within big tech platforms.
Probabilistic modeling is another top priority for marketers, who must become comfortable with and develop a strong point of view on which form of probabilistic modeling is most helpful in attributing success and predicting where future money should be spent.
Marketers will need to become comfortable with modeled conversions – and fast. Scientific transformation is what will come to marketing after digital transformation. Marketers, chief executives and boards will need to become comfortable with math they may not understand playing a central role in marketing measurement. It will take some getting used to.
The availability of deterministic signals will not disappear, and this fact will likely be sufficient to drive high confidence in probabilistic attribution in the future. Now we just need to modernize how we think about measurement.
Solving problems v a holistic view
We’ve reached a point where a Band-Aid approach – addressing challenges that arise from specific signal losses or occurrences – is no longer viable. This only creates temporary fixes that often don’t apply to new problems that may occur down the road or the underlying issues at hand.
Instead, marketers must begin to think about problem-solving from a more holistic point of view – examining the big picture and developing comprehensive solutions that actually resolve the problem. In the case of the DMA, this means marketers have to shift priorities from solving for specific consequences to considering whether they are set up for future success.
With legislative changes likely to continue to influence how data is collected, shared and used, addressing more minor challenges such as platform signal loss independently isn’t a comprehensive, long-term solution. Marketers must ask themselves a few key questions to determine the best path forward for their business. Here are a few to get started:
Does our brand have a guaranteed plan to build a comprehensive first-party data set?
Have we defined our point of view on market solutions to identity what we require?
Are we prepared for the scientific revolution coming to marketing with the right talent, training and tools?
If the answer to any of these questions is ‘no,’ marketers should invest in the creation and strengthening of these strategies to better position their brands for success moving forward.
A holistic perspective in practice
In recent years, we’ve seen concerns around consumer privacy grow, leading to various proposed and enacted regulations – including, most recently, the DMA, which aims to mitigate many such concerns.
The DMA is likely a step that prunes some branches but saves the tree. It presents an opportunity for marketers to shake off the moniker of ‘surveillance advertising’ and deliver a truly personalized advertising experience, while simultaneously allowing consumers to gain more control over their personal data.
While it will by no means be business as usual for marketers, the law will be crucial to helping consumers renew their trust and adopt a more optimistic perspective on advertising.
Jay Friedman is president at Goodway Group. You can read more from The Drum’s latest Deep Dive over at our Digital Advertising hub.