The impact of data privacy practices on advertising in the APAC region
As part of The Drum’s Deep Dive on Data & Privacy, Rishi Bedi (managing director, Asia Pacific, InMobi), analyzes how advertisers across APAC are navigating the volatile data privacy landscape, their prominent challenges and priorities, in the face rising governmental as well as consumer scrutiny.
Accelerated digitalization over the last few years has led to advertisers and brands building immersive and personalized digital experiences to keep up with their consumers. This has resulted in increased data collection and utilization, which has sparked worldwide consumer concern over data privacy.
Regulators have rallied to uphold the privacy of customer data, which has led to the introduction of government regulations like GDPR and CCPA on one hand, and technology regulations such as the App Tracking Transparency (ATT) and Identifiers for Advertisers (IDFA) deprecation by Apple, and the deprecation of third-party cookies by Google, on the other. However, consumer privacy practices in APAC are largely still nascent. This disparity has left advertisers and marketers in the region struggling to balance consumer demand for privacy while driving campaign resonance and reimagining their advertising strategies in the absence of unique identifiers.
At InMobi, we wanted to explore the top priorities of marketers in APAC and how they are developing mobile advertising strategies in a privacy-first world. As a result, we released our Future of Mobile Advertising in Tackling Data and Identity Depreciation report based on findings from a commissioned study conducted by Forrester Consulting, which surveyed over 300 decision-makers from brands, media agencies, and app owners in APAC. According to the report, tightening privacy regulations will catalyze a shift among advertising and marketing decision-makers towards greater adoption of consumer-first data practices – as well as to embrace new advertising models and marketing priorities.
Challenges to adopting data privacy practices
While data has historically been crucial for advertising and marketing decision-makers to tailor their strategies, rising consumer concerns and awareness over data privacy are drivers behind these same decision-makers that are now adopting consumer data practices. However, this concern and awareness is also a key challenge for 65% of respondents to our survey; only one in three had well-established privacy-adhering data marketing practices in place.
Additionally, with the looming shadow of customer identity depreciation, we also found that respondents were most concerned about filling the data gap. Some of their top concerns included the future quality, availability and accessibility of customer data, how effective the data would be in achieving customer reach and frequency, and the cost of investment to build a now-essential first-party data strategy.
The challenges faced by each organization were not uniform but varied based on the maturity of their consumer data privacy journey. At an APAC level, 42% of organizations are still learning and planning, identifying the impact of consumer data privacy developments on their digital/mobile advertising strategy, and planning the necessary steps. These organizations also cited a lack of understanding of privacy practices and a lack of ecosystem partners as their main issues. The firms that had already created a team to execute data and privacy-related strategies struggled with navigating diverse regulatory frameworks and achieving a holistic internal understanding of privacy. Even one-third of respondents with the most mature data privacy practices found it difficult to scale their data privacy practices due to a lack of resources and the diversity of privacy regulatory frameworks across the region.
On top of that, advertisers and marketers also indicated that they were grappling with the rising costs of ad space and the vagaries of measuring effective impact. Despite as much as 88% of respondents increasing their digital spends, more than half (57%) felt the impact was now less measurable due to advertising identity depreciation.
Resolution opportunities for advertising in APAC
Given the backlash against traditional methods of audience targeting – such as cookies – for their infringement on data privacy, the advertising and marketing ecosystem must adapt to stay relevant and effective in the face of data and identity depreciation. According to the report, they are rising to the occasion by focusing on alternative targeting methods (51%), planning to or increasing their use of preference management platforms (56%) and leveraging mobile advertising platforms (38%).
Furthermore, despite increasing investments in first-party data collection, third-party data still has a role to play in helping brands understand their audience. Over half of survey respondents were planning or expanding investment in third-party data by acquiring consent from customers and using alternative data sources to build audience profiles. The data showed that customer feedback through interviews will be the most popular choice for third-party data collection, followed by customer surveys and focus groups.
While nine in 10 advertisers and marketers said they were testing contextual advertising to connect relevant ads to a specific audience, the other modes of audience targeting being explored included algorithmic targeting (53%) and universal identity/identity resolution (52%). Over 74% of respondents reported onboarding specialists for first-party data collection. In fact, many respondents noted that they would be onboarding specialists to expand their expertise in the next 12 to 24 months – especially for customer data platform management and identity resolution.
Privacy-first advertising is the way forward
The sanctity of data privacy is now paramount among consumers, especially when it comes to advertising and marketing. It is time for decision-makers to think beyond the box and test out a mix of alternative targeting approaches. Investing in first-party data will also be crucial for success; marketers can leverage niche tools to transparently, yet effectively, collect user data without jeopardizing the user experience.
Additionally, businesses should embed privacy-by-design (PbD) principles in their marketing approach. These principles can help build a privacy-first culture across your business and ensure that protecting consumers’ privacy is prioritized in all facets of marketing. As a mobile marketing platform that highly prioritizes data privacy, we at InMobi are excited to see how the marketing and advertising ecosystem will evolve in tandem with the consumer data privacy landscape.
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InMobi is the leading provider of content, monetization and marketing technologies that help fuel growth for industries around the world. The company’s end-to-end advertising software platform, connected content and commerce experiences activate audiences, drive real connections and diversify revenue for businesses everywhere. With deep expertise and unique reach in mobile, InMobi is a trusted and transparent technology partner for marketers, content creators and businesses of all kinds. Incorporated in Singapore, InMobi maintains a large presence in San Francisco, London and Bangalore and has operations in New York, Chicago, Kansas City, Los Angeles, Delhi, Mumbai, Beijing, Shanghai, Jakarta, Manila, Kuala Lumpur, Sydney, Melbourne, Seoul, Tokyo, and Dubai. To learn more, visit inmobi.com.Find out more