Ignoring The Clash Between RTB And Privacy Regulations Doesn’t Remove The Threat

- August 28, 2019

Various complaints argue that RTB is incompatible with the EU’s General Data Protection Regulation and other privacy regulations emerging around the world. Regardless of the complaints’ outcomes, it seems clear that RTB is not a sustainable monetization choice for self-funded, future-proof quality media businesses.

So far in the 12-plus years of RTB’s mainstream life, most of the value was shared between ad tech companies and media agencies, while quality media owners have gone through more than a decade of struggles to survive.

As soon as 2020, the media industry could find itself with its main monetization channel shut down, yet few seem to be working on an alternative. The seeming inaction of most media owners, despite continuing and specific warnings from regulators, is dangerous and hard to comprehend.

New GDPR guidance

Before GDPR went into force, some publishers waited for ad tech companies and their lobbies to find a solution to gain user consent and keep RTB alive, while others blocked any EU traffic.

Since then, many media brands and ad tech companies have failed even the most basic and self-explanatory consent implementation requirements with the excuse that GDPR isn’t clear.

In June UK regulators issued new GDPR guidance that questioned the legality of the processes and use of data underpinning programmatic RTB, along with consent collection processes, the interpretation of legitimate interest and other topics. Media owners received an informal message: They have six months to get their houses in order.

To date, most EU publishers seem to be ignoring not only the recommendations, but also the patience of regulators, who understand the potential impact on media brands and have more than once left them with enough time to follow up on guidance.

A disappointing response

Many publishers privately acknowledge that the foundations of RTB conflict with privacy regulations and/or that they can’t afford to switch it off.

Instead of the binary option of fight or flight, many have chosen a third way: bury their heads in the sand.

One reason for this response is cultural. Many publishers’ commercial and advertising teams are largely a programmatic monoculture. How can you imagine a world different from the only one you’ve ever known in your career? Hard, but not impossible.

Media companies’ core DNA, which doesn’t have the objective of getting users to click on ads, should provide inspiration and guidance. Media companies need a culture that embraces the uniqueness of their business. They need their own journalists, commentators, designers, art directors, sales teams, marketing teams, data scientists and advertising execs sitting together and defining a way forward that focuses on the unique relationship with their readers, viewers, subscribers and customers. They need a hiring strategy that focuses on candidates who reflect that professional completeness of vision and personal open-mindedness.

A self-sustained quality media brand’s monetization strategy must go beyond the simplistic tactic of selling ad slots, as if it were the stall around the block selling popcorn.

Another reason is financial. A growing number of media executives realize how RTB has affected their category’s position, status and monetization over the years, but they can’t afford to lose the revenue.

With only months until a potential “judgement day,” the failure of thinking of a Plan B is irrational and also potentially dangerous if media owners are pushed into a corner, forced to choose between death by fine or death by bankruptcy.

Even some media companies with ambitious set-ups, like media alliances, are trapped into a chicken-and-egg situation, claiming they will switch RTB off when direct sales can guarantee as much revenue. But advertisers and especially agencies will never move budgets only to direct deals if they have the option to buy the same inventory, often more cheaply, on RTB.

Possible outcomes

There are two outcomes, in my opinion. The first (and only one, if you asked me) is for quality media owners to break away from the programmatic marketplace and create their own walled garden, RTB-free.

The second outcome is crueler but sadly the most likely, the longer media brands’ tinker: Only those that can afford to switch RTB off and diversify – by offering capabilities like sophisticated contextual targeting and non-RTB behavioral targeting – will survive.

The status quo

In addition to the cultural and financial drivers behind media brands’ inaction, I also see a third, more subtle element.

Some, concerned with maintaining the status quo and their jobs, believe that the upside of inaction is avoiding the risk of making mistakes and being singled out for trying something new, in case it fails.

It’s the philosophy of “let’s wait and see” or “someone else will do something.” It’s taking solace in the belief that it is more comfortable to sink with the whole category than stick their necks out for a solution that may not work.

But ultimately, hoping for the best is unprofessional, and not preparing for the worst is irresponsible.

There is a famous quote about natural selection, often mistakenly attributed to Charles Darwin, that seems fitting here when describing this crossroads for media companies: “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change, that lives within the means available and works cooperatively against common threats.”

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