By Simon Thorne, MD Europe for Flashtalking by Mediaocean
Created to promote a more competitive advertising landscape, the Digital Markets Act is a direct response to the dominance of big tech companies such as Google, Meta, Amazon, Apple and Microsoft. While its goal is to make advertising more transparent and help consumers understand what they’re seeing online, advertisers and brand marketeers, especially those who heavily rely on digital channels, need to consider how the legislation will impact their overall business models.
As we saw with the sweeping changes to the rules governing electronic marketing proposed by the EU’s ePrivacy Directive, there is a myriad of complexities and practical challenges to consider when implementing industry-wide regulatory changes. Although there are concerns from the industry about the DMA’s real-world impact, there is a huge opportunity for advertisers to explore alternative technologies for this new era of growth and innovation.
What is the intention behind the DMA?
The legislation positions the largest online platform players as “gatekeepers” and implements new regulations for them to adhere to. The DMA outlines clear policies regarding their algorithms, fees, ranking criteria, and terms of service and limits these platforms from putting in place limitations that restrict consumer choice. For advertisers, this will mean they’ll gain the right to see exactly how much of their budget is being used for each of the publisher’s services, promoting a greater level of transparency in the process.
Users will also need to be aware of the changes to how their social media accounts are being managed and how app stores operate. Apple may be obligated to introduce third-party app stores for the first time while users can now look to regain control over their personal social media accounts. These changes make it more difficult to pass data between platforms like Facebook and Instagram or Google Search and YouTube, raising a significant obstacle for big tech if users can opt out of data sharing.
Big tech companies’ ecosystems have historically relied on data sharing to drive their advertising campaigns, particularly as it provided a comprehensive picture of their users and allowed them to target ads to audiences across their platforms. The DMA has certainly exposed the consumer tech landscape’s dependency on data sharing. Now, both platforms and brands that feed ads into their channels are required to reconsider what modern, data-empowered marketing can look like.
What obstacles are advertisers expected to navigate?
The issues the DMA could cause large online advertising platforms is twofold. The first is audience reach. To go back to the online cookies example, a recent survey showed that seven out of 10 (70%) of respondents had taken steps to limit cookies. With the increased awareness that their data will be shared, more people will inevitably opt out in the future. On top of that, platforms will require permission from users for each service they provide, as opposed to before the DMA when Google could automatically use Search, Gmail, and YouTube to create unified audiences.
Secondly, stricter data consent rules may make analytics and tracking less detailed and precise. When a user has ‘opted out’, impression and click data will still be captured, however, advertisers won’t be able to rely on cookies or monitor subsequent conversions. This will impact tools like DV360 as it will have fewer conversions to optimise bidding. Accurate tracking feeds into how marketers set clear KPIs for their campaigns. If reach and frequency can’t be accurately measured, their ad campaigns may be severely impacted.
In the near future, we’ll see advertisers push to regain full control across all their media channels, which should drive the use of innovative ideas and technologies, such as privacy-first ad targeting systems.
What’s more, advertisers need to implement alternative technologies with an interoperable experience not just at the point of delivery, but during planning, booking, buying, targeting, measuring and invoicing.
An incentive for marketeers to innovate
It’s essential to recognise that the DMA was created to be pro-consumers and pro-innovation, rather than anti-advertisers and anti-platforms and should be seen as an opportunity for marketeers. The DMA won’t change the overall addressable audience for advertising: people will still visit the same sites, however, if the regulation leads to users opting out of data sharing across some, or even all services, advertisers will need new ways of reaching those same audiences.
Advertisers should adapt to the new advertising methods that will emerge because of the new regulations. Adopting an omnichannel approach, integrating flexible solutions, networks and channels that connect them with their entire audience. Independent ad tech platforms can help activate, measure and optimize creative delivery across all walled gardens and open web publishers, giving advertisers the best chance to reach their desired audiences and an understanding of how their campaigns perform across all media and creative.
Gatekeepers will remain crucial for the industry, but the new regulation will help level the playing field by making it easier for advertisers to leverage independent tools that manage and continually improve the performance of their campaigns. For advertisers, the enforcement of the Digital Markets Act is the opportunity to consolidate their advertising infrastructure for full and objective control of their campaigns and put processes in place that are legitimately the best for their brand across all media.
