Data privacy has been one of the hottest topics in digital advertising for the past five years.
Despite all the ink spilled on the topic, however, the way industry stakeholders discuss the ideal outcome for consumers is out of touch with basic intuition about consumer preferences and technical reality.
Granular consumer consent over tracking is often upheld as the gold standard for data privacy practices. Yet consumers widely regard “pop-ups as annoying,” and it’s hard to believe anyone in ad tech truly expects consumers to signal how they would like each corporate entity to track them across every property on the web.
To understand where data privacy technology, rules and consumer interfaces are heading, we should instead consider a range of scenarios for consumer privacy and how they might overlap.
The future of data privacy is likely a patchwork of solutions, not seamless and granular consent signals.
Why granular consumer consent is an unrealistic standard
Since the rollout of GDPR, consumers have been getting used to individual sites and companies asking them if they consent to tracking. One of two scenarios tends to play out, neither ideal.
One is clicking “yes” just to dismiss the pop-up. Surely, many consumers who click “yes” actually approve of the value exchange of data for mostly free services. But almost no one can say they haven’t said “yes” just to bypass the pop-up.
The other undesirable outcome of pop-ups as the arbiter of consent is saying “no” because the trade-offs are unclear, as is the case with post-AppTrackingTransparency notices on iOS devices. Who wouldn’t “ask app not to track” if the downsides weren’t evident? Some users say “no” because they genuinely don’t want to disclose their data, even if it means free services will start to cost them. But this trade-off is opaque.
The patchwork future of data privacy
Consumers signaling whether they consent to be tracked, for what purposes and for how long is highly unlikely if the mechanism to do so is pop-ups.
Instead, some combination of three scenarios will replace the current state of affairs:
- Consent management tech improves, making it easy for consumers to make educated and clear decisions about privacy across digital properties.
- Tracking mostly persists by default in exchange for free services.
- Ad targeting and measurement methods like contextual advertising and Google’s Privacy Sandbox APIs replace behavioral one-to-one tracking, allowing digital services to monetize attention with fewer privacy sacrifices.
The most substantive ethical progress would come from scenario one: a centralized data privacy hub allowing consumers to signal who can collect data about them, the kind of data, for how long and for what purposes.
Regulations like California’s Delete Act are pushing the industry toward this by compelling data brokers to comply with a single consumer request for data deletion. But it is still hard to imagine mass consumer adoption of such a shift, let alone companies accepting it without a fight.
Instead, the future of data privacy will likely be a mix of these three possibilities. Platforms and regulators, especially Apple and Europe, will keep cracking down on tracking. Google will plot a middle path wherein some form of tracking persists while trending toward contextual ad targeting and probabilistic measurement. Advertisers and publishers will keep trying to collect as much data as possible within those parameters.
Winners and losers in the privacy-oriented future
The biggest downside of this future environment is that competition in the digital media industry will suffer. If ad targeting is less effective on the open web, costs will increase for advertisers, and publishers will lose out on ad dollars to the walled gardens. This would in turn lead to ad clutter, paywalls and higher subscription costs for consumers.
That’s also a tough forecast for most ad tech companies, who make their bones helping advertisers and publishers better monetize user attention, generally outside the bounds of the walled gardens.
To evade the worst possible outcomes, ad tech companies, advertisers and publishers will need to make a better case to consumers to exchange their information for valuable and free services. They’ll also need to hold regulators and platforms accountable for their impact on the ad industry that keeps the free and open web afloat. Otherwise, the cookiepocolypse will have earned its name.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
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