An Update on Consumer Data Privacy Laws and the Implications for Advertising
With so many ‘sexier’ topics to write about, it’s easy to see why consumer data privacy legislation hasn’t garnered much play as of late. It seems like only yesterday that the California Consumer Privacy Act (CCPA) was passed and the marketing/advertising world reacted with great concern about its potential negative impact to digital advertising efforts and business models. It may therefore surprise some to learn that 24 other states have introduced and considered data privacy legislation this year alone, with three states – Illinois, Maine and Nevada – enacting privacy laws of their own.
While a .125 ‘batting average’ for privacy bills becoming laws is relatively low, the sheer number of states taking up the issue points to the level of concern among both politicians and the public about protecting the data privacy rights of consumers. It also highlights the power that the tech industry and related lobbying groups wield to combat these legislative efforts.
The net result of these actions occurring at a state level has been a jumble of laws that take a slightly different approach to the subject. Some bills or laws are more narrowly focused in terms of restrictions or requirements being placed on companies collecting or processing personal data, while others are more wide-ranging and comprehensive in their approach. As a result, even in states where privacy laws have passed, adjustments to the legislation continue and efforts are being made to clarify how businesses that collect consumers’ personal information comply with laws across different jurisdictions (i.e. states) with sometimes conflicting legal requirements. Nevertheless, the situation remains less than clear with largest and most comprehensive legislation, the CCPA, set to take effect in January of 2020.
The impact of data privacy concerns is extending into other areas with implications for the marketing and advertising industries as well. Recently, Google representatives were questioned by lawmakers in Washington regarding their plans to encrypt more traffic on its Chrome browser. That practice would make it more difficult for outside parties to track and capture data from online users as they navigate the web. As a result, companies in the cable and telecom industries have expressed their concerns to lawmakers, saying that Google’s encryption approach would give that company even more control over consumers’ data, and could also put a higher concentration of internet traffic in Google’s hands.
Google has also come under fire from Comcast Corp. regarding the access and sale of ad inventory on its YouTube video platform. According to a Business News article from October 1, Comcast’s FreeWheel video ad division has accused Google “of using privacy concerns as a pretext to limit FreeWheel’s ability to sell ads on behalf of its clients.” Comcast’s fear is that while FreeWheel will still be permitted to sell ads on YouTube, it won’t get the same access to consumer data because of the privacy concerns being raised, and thereby be at a disadvantage in ad sales versus Google.
But Google isn’t the only tech giant dealing with issues related to consumer privacy fears and practices. Amazon is also working to address growing consumer privacy concerns about its Alexa and Echo smart home devices, and its Ring doorbell and security alarm systems. In fact, at a recent product launch event, Amazon’s SVP David Limp went to great lengths detailing efforts being made to grant consumers greater control over device privacy settings. Privacy controls have become much more of a concern as penetration of smart home devices continue to soar – as do potential advertising and marketing applications from these devices.
So while consumer data privacy might not be the most interesting or talked-about issue in today’s advertising world, it continues to loom over our industry with the threat of significant disruptions to key digital and data-reliant strategies. I think a Game of Thrones reference is an appropriate way to sum up my thoughts on this topic – comprehensive privacy legislation ‘is coming,’ it may still lie behind a ‘wall’ of a contentious 2020 election year, but it is coming. And the impact of data privacy laws will be seen across a number of advertising/marketing-related applications ranging from digital and social media identification and retargeting to data-optimized and addressable TV ads, to the use of geo-location data for both targeting and campaign performance measurement, and even to the collection of TV viewing information via automated content recognition (ACR) software within smart TV technologies.