We're about to enter a new phase of privacy regulation in the US.
On January 1, 2020, the California Consumer Privacy Act (CCPA) goes into effect. Like Europe's General Data Protection Regulation, the CCPA will have a profound impact on the types of consumer data publishers and advertisers collect, as well as how they'll be required to handle it. And the CCPA could be only the beginning: many other state laws are proposed or in force on privacy.
The arrival of regulation should not surprise anyone who's been following the public debate on internet privacy. Consumer concerns over the use of personal information have been mounting for a long time. A recent survey by Verizon Media and Magna/IPG Media Lab shows that 87 percent of consumers say they are concerned about data privacy, with their biggest concern being identity theft.
At the same time, people have expressed a strong desire for relevant ads and custom offers. That same survey revealed that 88 percent of consumers find personalized ads useful, relevant, or interesting. They find websites more enjoyable and easier to navigate when the site can personalize experiences for them. And a majority are willing to voluntarily offer some forms of personal information in exchange for tangible benefits such as discounts or recommendations.
Publishers and advertisers need to develop a comprehensive strategy for navigating the requirements of the law and the desires of consumers. In this new privacy-centric era, they must rethink how they acquire and activate consumer data.
The CCPA goes into effect on January 1, 2020. It applies to any organization that collects information about California consumers and either has annual revenues of $25 million or more; collects personal data from at least 50,000 consumers, households, or devices; or derives more than half of its revenue from the sale of personal information.
The most significant requirement is that consumers must be able to opt out of the “sale” of their personal information. This is a legal term, and some people maintain that the law is not clearly written. But there is little doubt that a “sale” as defined by the CCPA includes the data implicated in third party digital advertising. If you are a publisher with third party cookies on your page, or if you are an adtech company placing third party cookies, you need to offer an opt out from “sale”.
Among other provisions, the CCPA:
Greatly expands the definition of what constitutes personal information;
Gives consumers the right to know what information has been collected about them;
Allows them to access their data, opt out of its sale, and demand it be deleted;
Empowers consumers to sue organizations that fail to follow the law; and
Allows the California State Attorney General to impose fines for violations.
Verizon Media will support the Digital Advertising Alliance opt out tools that will provide cross-industry control for consumers over the “sale” of their information. We recommend that you learn more about how the DAA solution can help with CCPA compliance. Everyone engaged in digital ads should have a “Do Not Sell” link on their pages to offer opt outs for California consumers. Verizon Media will also interoperate with the IAB CCPA solution.
Contrary to what some alarmists may claim, these new privacy regulations do not ring the death knell for internet advertising. They do, however, require publishers and advertisers to find new ways to operate, while providing consumer choice and offering a trusted user experience.
Considering CCPA, GDPR, and changes to browser defaults that challenge cookie-based advertising, it’s clear that the digital advertising ecosystem has to adapt.
1. First-party data is more valuable than ever, and consent is key. Publishers need to incentivize consumers to authenticate themselves by providing value in exchange for their data. Look for an increase in subscription models.
2. In an omnichannel world, the ability to have a 360-degree view of the customer across multiple screens is paramount. Instead of storing cookies on each device, publishers can assign unique IDs to consumers who've chosen to authenticate and opted in to personalized data uses. These persistent IDs would allow them to capture consumer activity on each device and build a unified profile of their interests, habits, and preferences, which in turn allows for greater personalization and relevance.
3. Brands must also continue their efforts to develop one-to-one relationships with consumers via loyalty programs, email newsletters, activations, and other time-honored techniques. In an increasingly direct-to-consumer marketplace, growing touch-points with consumers can build more engaged and trusted relationships.
4. We all need to do a better job of educating consumers about the information that's being collected, how it's used, and their ability to protect their personal data. The vast majority of the public is unaware of both new data laws and the available consumer controls.
5. The entire industry needs to rethink how it's doing business. Brands, publishers, and advertisers need to collaborate on solutions to the challenges of a changing marketplace with a cultural and regulatory emphasis on privacy and data protection. Securing meaningful consent to a personalized experience can generate high value data, although scale may be a challenge. There may also be a parallel move toward aggregated, de-identified data that can have some utility. We need to innovate to move forward.
The California law is well-intentioned, but we should think in terms of a national framework to provide privacy protection for all Americans. As we do so, we should ensure that we are protecting privacy and data while also preserving the ability to use data at scale to power the 21st century economy, one that allows for continued innovation in new technologies like 5G, AI, and Internet of Things .
At Verizon Media, we are well-positioned to help clients find new paths to success in this rapidly changing marketplace. With the breadth and depth of our premium content, as well as our people-based identity graph, our thriving DSP and native ad offerings, and our commitment to privacy compliance, we can provide solutions for the challenge of a changing marketplace that few other media companies can offer.