Data Privacy and the Cookie Banner Conundrum

Data privacy has been big news and a major focus over the last few years, especially in Europe with the passing of GDPR, the general data protection regulation law. The challenge privacy activists have yet to overcome is that day to day consumers will click consent in exchange for the convenience of accessing information on a website or in exchange for a discount or deals. While some consumers theoretically object to their personal data being collected and used in ways beyond they are comfortable with, many are resigned to the reality of our digital behavior. The latest trend in helping companies achieve their goals is no longer search engine optimization and is instead consent rate optimization, or creating banners to help increase the number of people that will click accept. Of course SEO is still important, but many companies are getting creative with how to cope with the increase in regulation around data privacy. Some of the forthcoming laws are designed to force technology companies to make it easier for consumers to make informed choices about their data privacy, though it remains unclear how far consumers will go to restrict access if it means more clicks away from their intended search. We’ve become spoiled with the speed and convenience of information. https://www.nytimes.com/2022/01/29/business/dealbook/how-cookie-banners-backfired.html?searchResultPosition=2

Digital Privacy and Who Pays for the Internet?

I missed this great piece on the tension between digital privacy and firms on Madison Avenue from Brian Chen of the New York Times when it was published late last month.

Chen summarizes the recent privacy changes implemented by FANG companies and the impact on the effectiveness of digital marketing for big and small businesses.

In April Apple implemented the ability to turn off tracking for particular apps on iOS devices. Google announced plans to block cookies to its Chrome web browser in June. And Facebook announced last month plans to target ads to users without knowing any user specific information.

These changes have come about through a willingness of governments to regulate big tech more, the most well-known example being Europe's GDPR legislation, and through shifting consumer preferences toward privacy.

However Chen rightly points out that this change impacts the effectiveness of digital marketing spend, providing the example of Georgia pastry shop Seven Sister Scones whose Facebook advertising became significantly less effective after Apple's iOS changes, resulting in a drop of monthly revenue from $40,000 to $16,000 in May.

Naturally the implications here are that if digital marketing becomes less effective, then naturally more spend is required to sustain the same conversions and revenue, and thus cost of acquisition increases.  For businesses with tight margins, this may mean switching to more traditional forms of marketing in preference to digital, or if that is untenable, price increases.  Indeed, Seven Sister Scones raised prices 25%.

In this respect, these privacy changes couldn't come at a worse time for the economy, as treasury bond yields begin to increase and inflation fears begin to take hold. 

Advertising revenue sustains a great deal of the internet, so the question becomes - if digital marketing becomes too expensive, who pays for advertising-supported digital products and services?

Does EU GDPR matter your business?

Does EU GDPR matter your business?

GDPR, or General Data Protection Regulation is nearly a new flashing word in the last few months across the world - in fact, it is because the new regulation for data protection in EU came into force on 25th May 2018, replacing the old data privacy law. However, the approval on that law was made on 2016, and some companies have prepared before its start day, yet according to the article from Forbes, 79% of business in US haven't been ready to adapt this new regulation.

The critical point in this regulation is that no matter your business location registered is, if the business data involves EU citizens, it is in the scope of GDPR. Therefore not to mention such Facebook, Twitter, YouTube, Amazon - those giant marketing platform and social media, but also any global business who may target EU users and customers are obliged for GDPR, for example many in travel, logistics, and eCommerce industries.

The rule was designed to protect user's privacy, and forces an organization to get consensus from users for opt-in, to erase customer's data when asked, and notify users within 72 hours if data was hacked, where if the business was found breaching GDPR, it would be fined up to whichever bigger of 4% of global revenue or 23 million USD. Those requirements considerably calls operational and technological changes in the business, so it has significant impact on companies.

From users' perspective, if you are non-EU citizens, GDPR may benefits you when an organization applies new data protection beyond Europeans without separating categories. Although you cannot sue without legal formation in your country.

Nonetheless, none of new regulation could be perfect without any criticism from the beginning. Despite its purpose to protect users, an opinion says the regulation can expedite exploitation of users' data. Why? Since most of the time, a company is much expert on the data usage and the only option left for the users are to select "agreed" in turn of benefit that the company provides. The regulation is not powerful enough to limit the way of data usage.

While this new enforcement haven't developed enough in business how to execute, the movement of enhancing the privacy and user's right in digital world isn't deniable. The wave rose from EU could soon reach to everywhere in the world.

REFERENCE:
https://www.eugdpr.org/the-regulation.html
https://www.forbes.com/sites/forbestechcouncil/2018/03/27/u-s-businesses-cant-hide-from-gdpr
https://www.forbes.com/sites/forbescommunicationscouncil/2018/05/09/how-will-gdpr-affect-the-mobile-marketing-world/
https://www.cnet.com/how-to/what-gdpr-means-for-facebook-google-the-eu-us-and-you/