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How do privacy regulations affect online advertising?

Ask an average person how they feel about reading the privacy statement of each website they visit and most will tell you that it is a pain and many simply do not read those documents. The reality here, though, is that those statements are required by privacy regulations for your own protection. Even if you just skim through and click Agree button, you can still have some peace of mind in knowing what information is collected or shared and what you can do to protect your information. Similar rules also apply to online advertising. However, excessive regulations will have unintended effects. Let us discuss the positive and negative factors of increased privacy regulations:

Ad vendors will be less aggressive with your info

Over the years, there have been some horror stories about aggressive marketers and advertisers taking your personal and/or private information and selling it to the highest bidder. Even if they do not sell you data, the simple act of sharing it without your knowledge or consent is a highly dubious piece of business. When you share your information with an advertiser, there is an expectation that is will only be used for their business purposes and kept safe at all times.

Illegal and unethical activities will remain

The problem with the online world is that the rules and regulations of one country may not be the same in another country. Advertisers who use questionable methods will keep moving to another jurisdiction that lets their activities slide by unnoticed or rules that are not enforced. Even if a situation does arise where these people are found to be on the wrong side of the law, actually getting those laws enforced is still a big challenge. Therefore, it’s always best to deal with reputable publishers, advertisers and ad servers that you know and trust.

Decreased functionality

With more regulations that limit data collection, some advertising features will not work or function as they should. Features that need certain data to identify and target potential viewers will be limited in their capability to do so. Advertisers might have to accept and deal with generic, aggregated and non-personally identifiable data, which means less accurate ad targeting and reporting.

Difficulty in obtaining consent

Privacy regulation is designed to give the public more control and more rights on their data. While this is a fine way to protect the consumers and ensure that they know what information they share, it can present a problem for the advertisers. If the law requires explicit consent on all activities, many consumers will simply say No and skip the opt-in forms. If the law is not clear then there will be workarounds and loopholes to be exploited.

Confusion

When consumers are asked to wade through a series of opt-ins and consent forms everywhere they visit, they will very quickly become frustrated and confused. Online advertising buying and selling process should be careful to ensure the safety and security of the consumer’s data; however, it also needs to be streamlined and run smoothly without serious delays.

Related

• Privacy considerations with online advertising

  "Advertisers understand consumers seldom make a purchase the first time they see an ad online. Therefore, they will often collect information from potential customers who view, click or interact with their ads on a publisher’s website. " More
• Ad serving and privacy issues

  "People knowing about your business might start with seeing your ads online. When it comes to advertising, the goal is to draw in as many people as possible so that they will purchase your products or services and continue to do so for as long as you are in business. " More
• Security concerns with online advertising

  "Publishers are well aware that there is a lot of money to be made by showing ads on their website. However, the issue here is that when rushing to monetize their pages, there are some site owners who do not perform proper due diligence. " More