Interviews, insight & analysis on digital media & marketing

First-party data the cure for a dysfunctional adtech industry

The adtech industry is in many ways “apparently a disappointing, dysfunctional one” when it comes to achieving the role of precision marketing and advertising, according to a leading industry lawyer and academic.

Perry Keller, Associate Professor in Media and Information Law, School of Law, King’s College London, said that although third-party cookies were in decline they had given the possibility of precision marketing and advertising through the identification of individual consumers but that “clunkiness” had come at a cost.

“There is a great deal of dysfunction in adtech at the moment, but nonetheless there is this vision which, with 5G and an enhanced Internet of Things backed by ever more powerful artificial intelligence, is still in sight,” he told the Westminster Media Forum.

Current technical limitations would be overcome in the future, but there was also a growing moral case to be made with companies coming under intense scrutiny over privacy and market dominance, with European competition regulators said to be looking closely at Google’s privacy sandbox and advertising practices.

“Some of the adtech industry think that this is going to be a silver lining in that if Google is limited in its abilities to use first-party cookies, and must open its platform more generally, there’ll be opportunities,” he said, adding that it was “highly unlikely” that “we can turn the clock back towards some alternative form of the third-party cookie”.

“Finally, there’s the moral crisis, surveillance, capitalism, and the loss of consumer trust. And I think that is widely apparent that precision marketing and advertising is widely perceived by the public as precision surveillance,” he continued, citing the public response to Facebook’s changes to WhatsApp privacy settings.

Instead, he believed that the solution would come through the better use of first-party data that was compliant, credible, consented and shared.

He pointed to General Data Protection Regulation – “what one might call the Brussels effect” – as a model other states and countries were starting to roll out, with a federal-wide US law “more likely under [President] Biden” and a draft Personal Information Protection Act in China, likely to be adopted in 2021.

“There is difficult part on this road forward, of how to reach compliance, and some will no doubt get burned in the process. But is the road that forward seems fairly clear. It is plainly true that data rights are remaining in focus.”

He also predicted a surge in representative ad class actions against ad tech, as has already been seen against other companies for their data breaches such as banks.

He concluded: “[There will be] much more transparency as to the workings of ad tech. And that will key back into not only making the work of regulators more straightforward, but also those privacy representative groups who will be better equipped to take up consumer issues and push them forward.”