Advertising technology depends on shared data to market the right products to the right people – but new privacy regulations are set to change this

“No one has ever known more about you than corporations do now,” says IT security blogger and speaker Graham Cluley. “Online companies are offering advertisers more information on us: where we’ve been, who we talk to, what we like, what photos we take.”

Most of us happily give away this private information every day, via smartphones and apps that monitor every step we take, every message we send and every song we listen to. As a result, firms such as Facebook can buy and sell data that offers an alarmingly accurate picture of who we are.

Customers expect personalised content from the news services they use

The ability to use this data to create targeted advertisements is invaluable and advertisers claim it creates happier customers.

Matthieu Betton, commercial director of advertising agency Sojern, says: “Consumers want adverts personalised to their taste. Even users who use ad blockers are more likely to respond to content that is more relevant to them: we’ve found that 41pc respond positively.

“Customers expect personalised content from the news services they use – so why should ads be different? As Larry Downes from Georgetown University’s Center for Business and Public Policy says: ‘An ad for the right product or service, offered at the right time to the right person at the right price, isn’t an ad at all. It’s a deal.’”

Data protection

Users don’t always know what they are leaving themselves open to when they share data. Campaigner for the Open Rights Group Ed Johnson-Williams says: “People are aware companies are gathering, storing and selling vast amounts of their data, even if they don’t know the full extent of what it is being collected or used for. We can limit companies from gathering data: for example, by using [the browser] Tor or a virtual private network, or search engines such as Duckduckgo, which don’t harvest our data in the same way that Google does.”

Every organisation involved in digital advertising will be affected by GDPR

However, a lack of awareness means few internet users take such measures. Things should improve when the EU’s General Data Protection Regulation (GDPR) comes into effect on 25 May 2018 – and should offer people more clarity on how their data is used. This will also mean companies could face extremely large fines if they buy data that has been improperly collected.

Richard Riley, an expert in data-protection law from Slater Heelis, says: “When companies collect data, they rely on users consenting to privacy policies when using a website. Under GDPR, it’s going to be harder to show you’ve got that consent – customers will have to agree to a tickbox, or an ‘I accept’. If you buy data from a third party, you’ve got to be sure how it has got it. If you breach the terms of the GDPR, you could be liable to a fine of up to 4pc of your worldwide turnover – which for companies the size of Facebook would be vast.”

New directions

Offering users greater privacy is a step in the right direction but this will affect how businesses engage with customers.

Chris Combemale, chief executive of the Direct Marketing Association, says: “Every organisation involved in digital advertising, from the brand and its agency to the publisher, will be affected [by GDPR]. For example, a bike shop may use data from a cookie to retarget a customer with an ad for a bike they browsed. However, under the new rules, using this data would require the bike shop to gain a consumer’s consent to use such cookies in the first place.

“The access to data and technology to target customers can tempt some to cross that line into the ‘creepy’; but this temptation has existed from the birth of advertising and marketing. Putting the customer first should be deeply embedded in a firm’s culture.”

In the near future, data sharing could depend on a customer’s bank balance. Marco Rimini, chief executive of Mindshare Worldwide Central, says: “Since the beginning of the commercial internet there has always existed an unspoken deal: free services in exchange for your data. At present, platforms such as Google and Amazon offer free services; but in future, companies might offer a ‘paid for’ way for customers to opt out.”

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