Report: GDPR Hurting Programmatic Ad Buying in Europe

Most Asian companies aren't ready for the imminent introduction of the EU GDPR (Image mixmagic / iStockPhoto)
mixmagic / iStockPhoto

LONDON – The General Data Protection Regulation (GDPR) has put the digital media and advertising industries into a tailspin, according to a report from media tech pub, Digiday.

The GDPR – which took effect last month – aims to give consumers more control over data that is collected about them, including data used for targeted ads. Among other provisions, the regulations bar companies from processing consumers' data without their explicit consent. The new privacy rules also give people the right to know who can access their data, and to revoke their consent at any time.

Citing anonymous sources, the publication reports that immediately after GDPR became effective on May 25, ad exchanges have seen European ad demand volumes plummet “between 25 and 40 percent in some cases.”

And ad tech vendors are reportedly telling clients they predict “steep drops” in demand coming through their platforms from Google. Jessica Davies, a reporter at Digiday, says some U.S. publishers have halted programmatic ads on their European sites.

She writes that Google has warned DoubleClick Bid Manager clients that until it has completed its integration into the Interactive Advertising Bureau (IAB) Europe and IAB Tech Lab’s GDPR Transparency & Consent Framework that publishers, ad tech vendor partners, and advertisers should expect a “short-term disruption” in the delivery of their DoubleClick Bid Manager campaigns on third-party European inventory.

“Revenues and [ad demand] volumes [are] expected to fall dramatically across the board,” said one publishing executive, under condition of anonymity.

Davies reports that the flow of inventory supply from publishers has also dropped in many exchanges due to the volume of U.S. publishers who have pulled their programmatic ads in Europe. 

The Los Angeles Times and Chicago Tribune have shut down their European sites, while USA Today has kept its site up in Europe but stripped it of ads. The New York Times’ pages do not appear to carry any programmatic ads in Europe; most are running house ads. One ad tech source said the Times is not available on open ad exchanges. 

A source tells Digiday that many are pointing fingers at Google. The day before the GDPR deadline, buyers were warned not to buy any inventory via Google on third-party exchanges, especially those using tracking and ad-verification pixels, as Google couldn’t verify whether those partners were compliant or not. Some agency groups were alerted on May 24, while others felt Google’s guidance had been nonexistent, according to agency sources.

“They [Google] are looking to solve it. So for now, we will suggest to our clients that we only use their [Google’s] tracking tools,” said a media buyer who spoke on condition of anonymity. 

Another vendor told Digiday that Google was “arrogant” and thought it could “bully everyone into using their own [GDPR] system, and the industry has turned around and kneed them in the balls. They have had to do an embarrassing about turn to now integrate with the [IAB] framework. But this all puts Google into the spotlight of the regulators. I don’t think Google will be happy about this whole situation as it puts [GDPR regulator] attention on them. The irony is that in the short term, it will be Google that wins commercially [from AdX demand spiking] while everyone else suffers.”

A Google spokesperson said it had worked with its third-party exchange partners “to develop an interim solution to minimize disruption while we finalize integration with the IAB framework.” 

Google has promised that by early this month it will enable personalized ad serving for publishers using the IAB’s framework, and by August, it will have integrated fully with the IAB framework so that publishers can serve personalized ads based on consent passed by a user, per vendor, or serve non-personalized ads.

In other GDPR news, U.S. Commerce Secretary Wilbur Ross says the new regulation could "could significantly interrupt transatlantic co-operation and create unnecessary barriers to trade, not only for the U.S., but for everyone outside the EU."  

Ross says the rules have created "serious, unclear legal obligations" for companies and government agencies and that complying with the rules "will exact a significant cost, particularly for small and medium-sized enterprises and consumers who rely on digital services and may lose access and choice as a result of the guidelines."

MediaPost News reports that a survey of top media buyers and planners at 32 major media agencies asked what percentage of their clients’ consumer data would become “unusable” given the new regulations. The average of all responses was 43 percent. (The highest response was 85 percent.)

Consumers have largely either ignored, opted-out, or put off their consent, according to a recent survey. Only 30.4 percent of the respondents said they agreed to those requests.