The Impact of Data Privacy For Big Tech Is Not As Straightforward As It Seems

The notion of privacy compliance has been in the news as consumers are increasingly savvy (and annoyed) about how their data is monetized. GDPR was the first major legislation to regulate how brands and websites manage data, including a call for increasing transparency when data is being mined and stored. It’s the reason that, as consumers, there’s now a pop-up at the bottom of virtually every website that collects data to alert users of tracking via cookies. 

After GDPR was CCPA, which was spearheaded by California and brought privacy compliance closer to home. Now virtually every website that could theoretically be trafficked by a Californian needed to be compliant, meaning that even though the legislation happened at the state level it had national implications. And on January 1, 2023, CPRA is set to go into effect. The legislation, which is commonly referred to as CCPA 2.0, expands the data management requirements to include even greater compliance obstacles.

Meanwhile, Google’s making its own moves to presumably increase consumer privacy. The company announced that it will stop using third party cookies in Chrome at the end of 2023. 

These moves are largely seen by the industry to be pro-consumer, but there are some major implications that are going unchecked. Namely, minimizing the effectiveness of smaller publishers solidifies the dominance of Big Tech. 

“For open web advertising, the results of this shift could be calamitous — because if publishers are unable to authenticate audiences to maximize [return on ad spend], advertisers will turn to more powerful partners who do have access to first-party data at a massive scale: the walled gardens of Google, Meta, and Amazon,” said Debra Fleenor, President of Adapex, in an article for Advertising Week.

Adapex, which was named to both the Inc 5000 and Deloitte’s Fastest Growing Companies in North America (Adapex was ranked 262) in 2021, has grown more than 100% year-over-year for the last three years. Fleenor founded Adapex in 2013 to fill a gap in the publishing industry – she was one of the first to tackle programmatic advertising optimization for publishers, a notion that would revolutionize how consumers engage with content online.

“Solidifying the place of small and mid-sized publishers and platforms is important to the integrity of the advertising and communications ecosystem,” says Peter Montoya, Founder and CEO of Urth. “Notions of free speech and data privacy are becoming red herrings that are diverting consumer attention from how Big Tech is monetizing and monopolizing that attention.”

According to Fleenor, mid and long-tail publishers will need to make a number of moves in order to survive in a cookie-less era including setting up an infrastructure for collecting their own first-party data. 

“In addition to collecting first-party data, advertisers should partner with privacy-conscious identity providers to enrich it,” Fleenor continued. “These solutions, such as The Trade Desk’s Unified ID 2.0, address the main problem presented by an identity strategy based on first-party data: scale.”

Fleenor points to other moves publishers can take, including leveraging new technologies like AI to enhance first party data through smart audience segmentation and enabling contextual targeting.