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Adtech - out of the shadows and into the limelight

Almost three years ago 60 Minutes episode “The data brokers: selling your personal information” revealed the astonishing amount that data brokers know about us. The show called the data broker industry “a much greater and more immediate threat to your privacy” than “government snooping and bulk collection and storage of vast amounts of data.” Corporate data collection is “coming from thousands of companies you never heard of.”

Even though the advertising community got a swift kick in the gut from US mainstream news, it has mainly been woefully unforthcoming about how much data it is collecting and what it is doing with it. The community claimed that 60 minutes got it wrong and that companies have been collecting data, aggregating it, analyzing it, managing it – and maybe even selling it – since their inception, so there is really nothing new or alarming. Most companies did not alter their practices or policies but kept on doing what they have been doing for years. Unfortunately, this strategy has now backfired.

The draft fails to see the legitimate business models of third parties

According to the proposed EU ePrivacy Regulation, techniques that sneakily monitor the actions of end-users, for example by tracking their activities online or the location of their terminal equipment, pose a serious threat to the privacy of end-users. The draft regulation reads that third parties using cookies or similar techniques, such as device fingerprinting, must obtain user’s consent to access information relating to user’s terminal equipment – consent meaning a statement or a clear affirmative action that must be freely given, specific, informed and unambiguous indication of the data subject’s wishes. For companies that lack the direct consumer interface, obtaining such a consent may prove to be a tedious task.

The draft reveals that the regulators do not fully grasp the role that third parties play in advertising and marketing. First parties, such as media companies, rely on third parties to e.g. offer services that enable advertisers to show users more relevant advertisements to consumers. Thus, third parties play a crucial role in supporting online media and other websites that rely on advertising revenues. Ultimately, the draft fails to see the legitimate business models of third parties, the effects that advertising has on boosting the European economy and the benefits online data could bring about to consumers, businesses and society as a whole. By imposing strict rules on cookies and similar techniques, the regulation could seriously disrupt the whole online ecosystem.

Companies should raise consumer awareness of the role of third parties in supporting free online media

Most consumers, on the other hand, are blissfully unware of third parties and the electronic footprint they leave behind when surfing the Internet. However, as more and more people are becoming aware of the complexities of the modern data economy and the rights that the new EU regulations provide them with, companies will need to be more forthcoming about how they process data. In addition to providing consumers with meaningful information about their online data collection and use practices, companies should raise consumer awareness of the role of third parties in supporting free online media and services.

As argued in “The Privacy Payoff: How Successful Businesses Build Consumer Trust” by the privacy commissioner of Ontario, Canada, Ann Cavoukian, and journalist Tyler J. Hamilton, companies that are open and honest in their communications, adopt privacy policies and are very clear about how they use collected data discreetly to further corporate growth, efficiency and performance will benefit from wider consumer acceptance in international markets. This is what leads to increased revenue, less litigation from the aggrieved, enhanced reputations for their brands and more prospective partners willing to enter into lucrative cooperative ventures.

Relevant aims to provide users with transparency and choice

Transparency means giving information in simple consumer friendly language, not dense privacy policies that only lawyers understand and go unread because of this. Choice means being pro-active in providing mechanisms for simple preferences to be expressed and acted upon with minimal interference in the user experience. Both are essential in building relationships that require a deep well of trust.

Relevant also believes in giving full transparency to its clients. Visibility into how and where data is collected from and how much of marketer’s ad budget goes toward media and how much goes toward the media agencies or vendors from which marketer is buying such media is crucial in modern media buying and in refuting the “black box“ claims made by marketers. By providing transparency and choice Relevant aims to alleviate the concerns related to third party data processing and programmatic advertising.

By clinging onto the argument that third parties do not process personal data or by simply staying silent, companies imply that they have something to hide. By emphasizing the positive (relevance and quality instead of creepy targeting), by being forthcoming about its practices (transparency instead of secrecy) and by sharing the powerful benefits of data by giving back insights to consumers, publishers and marketers (win-win instead of zero-sum), the industry may change how consumers, their contracting parties and regulators alike view them.

It is high time to step out from the shadows into the limelight – that is of course if you have nothing to hide.

Blog post published in collaboration with Relevant Digital,


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