How digital out-of-home can meet the data privacy moment

From Member Vistar Media | By Eugenie Chen, originally appeared in The Drum

Apple’s iOS 14.5 privacy changes, which force apps to get explicit consent to track user behavior, tore through the ad tech ecosystem like a tornado. The privacy policy Apple calls App Tracking Transparency (ATT), coupled with the expansion of data privacy laws and Google’s upcoming elimination of third-party cookies (though not until 2023) has forced advertisers used to one-to-one targeting to reassess their data practices. It’s even caused many to wonder whether adtech – and the many businesses dependent on one-to-one targeting using cookies or mobile advertising IDs for user acquisition and engagement – will crumble in an era focused on consumer consent.

But anyone who wants to understand the impact of data privacy changes on advertising first needs to consider which advertising channels are at issue. ATT and similar policies will not affect social advertising in the same way they will impact TV, nor search in the same manner as display. Consumers interact with information differently depending on the contextual environment they are in, which in turn generate different types of data to describe their behavior.

This point is particularly relevant to the effects of privacy rules on digital out-of-home (DOOH) advertising. DOOH is not premised on one-to-one targeting. Rather, the channel leverages representative data to programmatically place ads in places where they will reach an advertiser’s target audience. The upshot is that DOOH is going to evolve differently in the privacy era than forms of digital advertising closely tied to one-to-one targeting.

Without getting into the weeds just yet, let’s explore why data privacy changes are positive for advertising, how they specifically affect DOOH, and the changes DOOH advertisers do need to make to adjust to the impact of ATT and other privacy reforms.

Data privacy changes are good for society and business
At their core, data privacy reforms, whether by state governments or tech companies, are about being transparent with consumers regarding how, when, and why their information is being collected and getting consumer consent to collect their personal information.

That is a common-sense improvement on an advertising ecosystem that has historically been less than clear about why and how it collects data. Consumers deserve the right to decide whether they want a company to collect their personal data based on the benefits and conditions of data collection, something the advertising industry owes to consumers. Advertisers should clearly communicate to consumers that data collection often finances free services, can be secure if done correctly, and makes digital experiences more convenient and engaging.

I would add that data privacy changes are not just about social good. They are also good for business for a reason all advertisers understand: Consumers do not respond well to ads that they perceive as ‘creepy’, and they do not like brands that seem to be tracking them without their permission. On the opposite side, consumers do not like information perceived as irrelevant. A more transparent and consent-first advertising ecosystem offers adtech and brands the opportunity to build stronger relationships with the audiences they are trying to reach by generating and delivering relevant information in a responsible manner.

How privacy rules affect DOOH
DOOH is relatively well positioned to thrive in the data privacy, post-ATT era because it relies on probabilistic models using representative data, not persistent tracking of individual users’ behavior. Because DOOH is a one-to-many advertising channel, it can allow advertisers to get in front of their target audiences without one-to-one targeting.

That said, DOOH does rely on anonymized location data to understand aggregated consumer movement patterns and help advertisers understand where, when and how to reach their audiences. It is reasonable to expect that ATT and other privacy changes will reduce location data scale and call for changes in targeting and measurement practices for DOOH advertisers.

Recommendations for DOOH advertisers and providers
The main advice brands and DOOH providers should heed as we move into the data privacy era is to exercise vigilance. To start, advertisers should work with their providers to ensure consent for data collection across the entire data management process. This will ensure all parties involved in data collection and maintenance respect consumer consent and comply with evolving regulations.

Advertisers should also work with vendors to understand any changes they are making to existing processes such as audience methodology and feasibility guidelines to ensure the data sets used for describing consumer behavior remain representative. Advertisers may also consider alternative targeting solutions such as contextual targeting to engage with consumers in a privacy compliant manner.

Brands should continue investing in developing their own in-house, proprietary data sets and work with vendors that have enough of a robust underlying tech infrastructure that allows them to work any data set you bring to the table.

I expect the advertising ecosystem, and DOOH, to benefit from data privacy changes. ATT and its ilk do not mark the end of data-driven business or advertising. Rather, they offer advertisers and ad tech companies the opportunity to strike a healthy balance by articulating a clear value proposition for consumers when asking for their data.

Consumers get consent, and advertisers get audiences who actually want to hear from them. If we do this right, everybody wins.