By Simi Gill, Digital Account Director
Meta again finds itself in the firing line of a user privacy backlash after news of a staggering €390m fine for a misuse of data for its targeted ads. Actions of which have now been declared an official violation of EU GDPR data rules following an overruling of the DPC (The Irish Data Protection Commission)’s former approval.
The initial approval stated that Meta’s approach to integrate automatic user consent for personalised ads into its terms and conditions (instructing users to accept or face being blocked from the platforms) was acceptable. However, the European Data Protection Board have now determined that this is, in fact, not a lawful solution and the tech giant must offer users the option to personally approve this consent, as opposed to dictate it in what is presented as a non-negotiable, ‘like it or lump it’ directive.
Despite Meta’s intention to appeal based on an argument that Facebook and Instagram are “inherently personalised” – meaning that as part of that personalisation, targeted ads are simply a “necessary and essential part” of how they work – they currently have just three months to change how they obtain data.
Whilst I agree that personalisation is an integral part of a user’s social media (and broader online) experience, I’m baffled how the DPC approved Meta’s contractual approach to this in the first place. But personal opinions aside, there is no doubt this will have a consequential effect on how we can access and buy audiences for our media campaigns in the future. However, at present, and to put it bluntly, we are still determining exactly what that will look like for digital advertisers.
On the one hand, let’s not panic. It doesn’t mean a sudden end to all social media advertising as it should simply move to work on an opt in/out basis – so for those who opt-in, the targeting capabilities remain the same. It’s arguable, then, that those who remain in the targeting pool are of higher quality and more likely to interact with a brand and, in the long run, potentially improve advertising cost efficiencies due to better conversion rates. However, this also runs the risk of inflated CPMs immediately once algorithms adjust to targeting a smaller group of people, which is no different from the effects we already manage with cookie banners requesting users to accept or decline for website tracking.
Secondly, contextual ads are still permitted, meaning targeting based on the content of a particular page/domain. Lastly, we want only to invest in platforms deemed GDPR compliant. When deciding how to plan and buy media, we are investing our clients’ money and have a huge responsibility to take care of their reputations. At The Kite Factory, we treat brand safety with the utmost priority. We are always swift to react to potential brand perception threats on any platform (for example, having pulled all advertising from Twitter following the reign of Elon Musk and the layoffs of its technicians).
Yet, on the other hand, having seen the initial effects of Meta’s user opt-out of app tracking on cookie banners following the 2021 iOS14.5 update (where a massive 75% opted out, according to the latest Statista worldwide figures) I would then expect the rate of opt-outs in this case to be vast.
People want to have control over their data, and whilst there is a general shared consensus from consumers that personalisation is a must for brands if they want to increase loyalty and advocacy, this link will be difficult to communicate from a data-harbouring giant like Meta which has been caught out numerous times. Perhaps users will understand the previous benefit of opting-in once they start receiving random, irrelevant ads in their personal newsfeeds, but this isn’t a viable reassurance that paid advertisers want to hear.
Addressing the contextual ads point, we must question the use of contextual ads within the social space. This is a targeting solution much better suited to programmatic advertising, where we want our ads to appear across the wider web and apps, but how can a personal social newsfeed be contextual? The only placement this may benefit from within Meta is the ‘Audience Network’, which is their off-Meta, in-app advertising network for mobile sites and apps. Regardless, Audience Network must be used with caution due to the reduced visibility of where ads are served and is arguably not a social activation.
What I can say for sure is that this will continue to drive a need to diversify away from Meta as our leading platform on media plans. Many instances have already started to push us this way (most noticeably, the reduction in website tracking and conversion attribution, as well as reduced audience demographic and interest segments post GDPR). So, whilst it will continue to have a staple place within campaigns, perhaps its overall role may need to be re-evaluated. This should open an opportunity for Meta to propose a different targeting solution instead, introducing new platform capabilities that aren’t reliant on personal data but still indicate user affinities and interests (but this is easier said than done).
Furthermore, it also supports Meta’s push of ‘broader is better’ when it comes to audiences, as we’ve already seen a steer towards targeting wider and away from bespoke segments from the platform over the past year. I’d also imagine this is music to any third-party data partner’s ears, whose models already exist on creating GDPR-compliant audiences from a suite of data signals and partnerships that can simply be pushed through to Meta platforms. As advertisers, we will need to better utilise and plan for the cost of overlaying these partners in our media plans. And, of course, it will continue to pave the way for the first-party data argument as we head towards the cookieless open web (and now potentially social) in 2024.
Given Meta have just three months to respond with what the European Data Protection Board deem a lawful update, we won’t be waiting too long to see the initial effects of this. However, it will take further time this year to assess the true rate of opted-out users and the bottom-line effects this has on our paid media KPIs. And let’s not assume this is 100% certain to go ahead. Meta has every intention of appealing the decision made by the board, and this appeal may be successful. However, as we know in Digital, things are not set in stone until they happen – just look at how many times the end of cookies has been postponed!
My advice at this stage is that advertisers and brands must be willing to be adaptive regardless, instead of simply classifying this as a potential upcoming problem. What we do know for certain is that digital is changing every year, GDPR is only likely to get stricter and therefore isn’t going anywhere, and the cookieless world is still (eventually) coming.