Reframing privacy: a new paradigm to combat data-driven discrimination and harm

Recent headlines have been dominated by social platforms’ restructuring actions following disappointing earnings, several of which vaguely cite the challenging ‘macro environment’ – triggering speculation by industry experts on platforms’ reluctance to acknowledge the profound impact of Apple’s AppTrackingTransparency changes on their advertising business.

With five US state privacy laws set to be effective in 2023, the EU’s digital reform progressing via the Digital Markets Act and Digital Services Act, and sustained regulatory and enforcement momentum, the headwinds caused by Apple-induced signal loss are a harbinger for challenges that will impact all corners of the online ad ecosystem.

Yet, like platform-driven changes, regulation itself is a downstream symptom of a deeper root cause. It is one that EU lawmakers and regulators around the world, including the increasingly vocal and resourced US Federal Trade Commission (FTC) continues to expound: the risks to individuals and to society bred from the unchecked commercial data collection and use that underpins the online advertising industry – and sustains the business models of platforms that wield tremendous influence on the information economy.

The growth of data-based discrimination

The FTC held its annual PrivacyCon event on November 2 this year, featuring research across several of these topics ranging from consumer surveillance, children’s privacy, dark patterns, along with an entire panel focused specifically on adtech. A particularly salient presentation interrogated whether cookie-less solutions would indeed deliver on the promise of enhanced privacy. Among the findings of Patrick Parnham’s research is that alternative identifier solutions create dynamics that increase the likelihood that audiences syndicated to platforms for activation may “override existing targeting restrictions” – or the “loosely-enforced” platform policies purported to prevent targeting on sensitive data such as health information and prohibiting discriminatory targeting of opportunity ads like that which relates to a target’s housing, employment and credit data.

Put simply, this means that proposed solutions are at risk of leading to more – rather than less – data-driven discriminatory outcomes. The US Department of Justice’s recent settlement with Meta requiring the sunsetting of ‘Special Ad Audiences’ and fundamental changes to Meta’s ad delivery systems to mitigate disparate impact further emphasizes the real-world harms associated with these gaps in accountability.

This paradoxical outcome underscores the importance for marketers and the broader ecosystem to recognize the deeper challenge – one that is far more profound than what is traditionally associated with ‘privacy’ in the collective conscience of the industry.

The fundamental challenge is not about cookie banners or liability volleyball – it is about realigning incentives to foster accountability and to serve as a check on optimizing engagement and attention in exclusive contemplation of commercial outcomes, even where at the expense of societal and individual harms.

The call to action is about restoring trust in industry and institutions, promoting equitable access to opportunities, mitigating information asymmetry and algorithmic amplification of misinformation and disinformation, enabling personal autonomy, protecting liberty and safeguarding democracy.

For lawmakers, the task at hand is striking the right balance of protecting consumers and promoting innovation and competition in a healthy digital economy – while safeguarding individual privacy, human rights and civil liberties, preventing discriminatory data use and sustaining national security.

Establishing a new paradigm

Advertising is not the cause of these challenges, but making meaningful progress requires open and active engagement of stakeholders across the online advertising ecosystem. Advertising undoubtedly plays an important role in society; and of course, relevant advertising is mutually beneficial to brands and consumers alike. However, where unchecked, relevance can become a euphemism for discrimination and intrusion. Transparency and fairness are the fenceposts that separate personalization from manipulation, exploitation and the erosion of trust.

Preserving the benefits that the ad-funded web offers to society requires collaboration across the industry in the development of a new paradigm for data collection and use in which each party in the online advertising supply chain has unique responsibilities to fulfil.

There is opportunity for marketers to do their part in embracing this new paradigm where data collection and use is guided by core principles that combat data-driven harms, and the collection and use of data is:

• Authentic: Building authentic connections must serve as the north star.

• Transparent: Transparency and accountability are prerequisites for partnership across the supply chain. We must move past compulsory disclosure and toward raising meaningful awareness that empowers individuals.

• Fair: Data and insights derived therefrom are collected, generated and used in alignment with individual expectations to deliver value as perceived by the individual.

• Responsible: The intent of data collection and use furthers the collective interests of individuals, businesses and society – while upholding respect for human rights and civil liberties.

• Ethical: The impact on individuals and society is dispositive in the balance against commercial interest.

Over time, embracing these principles can reset the calculus driving commercial data practices. For example, disincentivizing collection of sensitive data and combatting the algorithmic opacity that impedes accountability in fighting discriminatory outcomes and harms associated with optimizing exclusively to engagement can help establish new incentives for advertisers. It also can break the pattern of uncertainty and disrupt the dynamic that is equal parts frenetic and stagnant, driven by the third-party cookie deprecation waiting game and the ever-evolving regulatory environment.

Putting it all into practice

By way of example, consider how integrating these principles into media and audience strategy may combat the potential harms cited in Parnham’s aforementioned research.

Advertisers can and should define appropriate targeting for their campaigns – within and beyond the housing, employment and credit context. They can collaborate with their partners to determine the activation tactics and audience attributes – demographic and behavioral – that they deem appropriate or inappropriate for these campaigns. Their agency can activate in alignment with these principles – ensuring that even where discriminatory targeting controls do not exist (like within DSPs), the brand is driving inclusive advertising of opportunities, promoting equity in alignment with their corporate values. And, when the EU’s Digital Services Act package compels disclosure by platforms of key parameters used in serving an ad, the brand can be confident in how they show up to their consumers.

To be sure, the road will be long and winding – and this example is one small piece of a far larger picture that includes difficult tradeoffs, likely unintended consequences and course corrections. Nevertheless, all corners of the industry have a duty to their shareholders, their communities, their employees and to society to do their part in mitigating data-driven harms.

Arielle Garcia is chief privacy officer at UM Worldwide. For more on how the world of data-driven advertising and marketing is evolving, check out our latest Deep Dive.