On May 25th the new General Data Protection Regulation (GDPR) was introduced with the aim of preventing abusive practices and the wrongful use by companies of the personal data belonging to citizens, users or clients.
The new GDPR mainly affects private companies and public institutions, which must guarantee that all people whose data they have in their possession are informed and understand the terms and conditions of how said personal data is used, as well as obtaining new consent for their use.
One of the sectors to suffer the greatest effects is that of technological/digital advertising, i.e. the activity carried out by AdTech companies.
What is AdTech?
As indicated in earlier entries, the “-TECH” suffix has emerged with great strength when referring to technologies developed and applied to the financial (FinTech), regulatory (RegTech), wealth management (WealthTech) sectors, etc.
Along the same lines and within the advertising sphere we have AdTech, understood as the entities which provide advertising platforms and whose main activity is focussed on the buying and selling of advertising space, the management and development of creativities, automated bids, etc.
AdTech companies monitor people without their knowledge or their explicit consent. In other words, they draw a correlation between the websites visited by users and the advertising shown in a browser or application.
Often what is achieved is the opposite effect: the users become saturated due to seeing the same advertisements, the same companies, products or services which they find irrelevant or which they have sometimes already acquired.
How can AdTech companies align themselves with the new GDPR?
Until now, both advertising agencies and companies have repeatedly invested in this kind of practices which have seen themselves compromised by the Facebook and Cambridge Analytics cases.
In view of this new panorama more than a few companies are regulating their advertising channels and this kind of practices. Among others, Google has moved forward, establishing important restrictions on advertising by third parties on their platform in order to adapt to application of the new GDPR.
We will have to wait for a reasonable amount of time before analysing the effects of the new GDPR on the advertising business, but what we can already say is that these channels/practices are not sustainable over time and that they will not continue to function in the same way.
Is this the end of the road for advertising “abuse”? Are we about to witness the pop of the AdTech bubble?