As Meta moves to ‘consent-based’ ads in the EU, advertisers must focus on trust

This change is a departure from Meta’s previous reliance on “legitimate interests” as a basis for targeted advertising – data processing, carried out mainly to benefit the company’s interests and overriding anyone else’s.

So how could this development impact both advertisers and the digital advertising ecosystem?

Regulatory winds of change

The shift follows regulatory rulings that have raised questions about the legality of Meta’s data processing practices. Ireland's Data Protection Commissioner and other regulatory bodies have challenged Meta’s use of user data for ad targeting without having gained explicit consent, with hefty fines attached.

As a result, Meta has decided to change its approach, adjusting the legal basis for processing certain data from solely considering “legitimate interests” to actively requiring the user’s consent.

Advertisers need to focus on trust

For advertisers, this change underscores the need to transition from data-centric strategies to trust-based engagement.

With a diminishing reliance on third-party targeting, the focus on first-party data and authentic brand communication is increasing.

This adjustment emphasizes the importance of classic marketing disciplines, including segmentation, targeting, positioning, and aligning marketing with evolving user privacy preferences.

To track, or not to track?

This move by Meta is just one facet of a broader transformation in the digital advertising ecosystem.

Apple’s introduction of the App Tracking Transparency (ATT) feature, allowing users to opt in or out of app tracking, has already reshaped user data access for advertisers. Now, Meta's shift adds another layer of complexity.

The landscape is changing rapidly, calling for us to be more adaptable and creative within our marketing strategies, in line with regulations.

Privacy policies: a foundation for user control

Meta’s decision aligns with the growing emphasis on user consent and privacy. Users are generally hesitant to share personal information online, even on reputable platforms, with the rise of hacking and fraud a serious threat.

User consent empowers users in the EU to have more control over their online experience and personal data.

Privacy activists and experts anticipate that many users will opt out of targeted ads, reflecting their desire for more control over their online privacy.

The potential cost of privacy: Where are we now?

Advertising accounted for 97% of Meta’s revenue last year. While this decision is a step toward user privacy, it also has potential implications for Meta’s revenue streams. The transition might impact the company's bottom line as the personalized ad model faces financial challenges in the EU market.

Meta’s announcement demonstrates a significant change in the digital advertising landscape. As users gain more control over their data and privacy, advertisers must navigate this new terrain with careful consideration and a customer-centric approach.

This decision underscores the importance of building authentic relationships with users, leveraging first-party data, and embracing evolving privacy regulations. The advertising world is evolving, and businesses that adapt will find new avenues for growth and success.