Three US lawmakers (Rep. Anna Eshoo, Rep. Jan Schakowsky, and Sen. Cory Booker) made a splash on Wednesday when they introduced the Banning Surveillance Advertising Act of 2022. Its primary goal is to limit the data that advertisers and advertising technology (adtech) vendors can use to target advertising. Predictably, the adtech industry — most notably, the Interactive Advertising Bureau (IAB) — is in a tizzy over the bill.
What’s The Fuss About?
The bill is primarily aimed at “advertising facilitators” — companies that serve ads or collect or process personal information (PI) for the purpose of serving ads. Here are the key aspects:
- It sets significant limitations on the data that companies can use to target ads. Advertising cannot be targeted based on a list of individuals or connected devices (even first-party data), contact info, unique identifiers, or other identifiable PI. It uses a broad definition of PI, similar to the California Consumer Privacy Act, including inferred or derived data, communication content, browsing history, and device IDs. The bill doesn’t make exceptions for consented ad targeting, making it a blunt force instrument — but one that will almost definitely get softened as it works through the legislative process.
- It carves out two acceptable forms of targeting: contextual and broad location. The bill says contextual advertising — defined as targeting based on information you’re engaging with (or is in close proximity to information you’re engaging with) or based on your internet searches — is an acceptable form of ad targeting. It also carves out an exception for targeting based on a “recognized place,” which is basically a geography as defined by the US Census Bureau, like a state, county, city, town, congressional district, etc. But precise location targeting is not allowed.
- It allows for private right of action and fines of $100 to $5,000 per violation. The Federal Trade Commission (FTC) can levy fines, and consumers can file civil suits.
How Did We Get Here?
This is the latest chapter in the data deprecation story, one which represents a converging of forces designed to protect consumer privacy and curb industry data access. While few marketers would say they advertise in intentionally nefarious ways, consumers have been burned by harmful ad targeting, such as the Washington Post editor who had a stillbirth and couldn’t escape pregnancy ads, the WIRED editor still getting wedding ads two years after calling off her wedding, and the Forrester ConsumerVoices panel member who shared:
I have a disabled child. I was researching her medical conditions, and I suddenly started receiving ads for preplanning funerals.
The list goes on and on. We’ve all faced awkward, creepy, or harmful ad experiences, and consumers don’t like it. While it’s inaccurate to say all consumers hate ads — 53% of US online adults would rather see ads than have to pay for online content — most of them dislike how much data is harvested for targeted advertising. Fifty-nine percent of US online adults say it’s not okay for companies to track their activities across devices to send more relevant ads, and 54% are not willing to share PI to receive more relevant advertising.
What Should Marketers Do?
This bill shouldn’t come as a shock. Marketers should pay attention to the bill, but they don’t need get worked up just yet. We make no bones about what the future of audience targeting will look like; it won’t be filled with ads stalking individual people around the internet. And we’ve been clear that marketers need to prioritize consumer transparency and choice, focus on the value exchange, and base targeting strategies on the depth of the brand/consumer relationship. For its part, the advertising ecosystem is already starting to shift from cookie-based tracking, opting for alternative methods for generating audience insights, ad targeting, and measurement. A “wait-and-see” approach is not an option. Marketers must not sit on the sidelines as this surveillance advertising bill gains steam. Here’s what you should prioritize:
- Kick your zero- and first-party data strategy into high gear. In 2022, marketers must continue to focus their efforts on direct consumer relationships. First- and zero-party data strategies help build sustainable, consumer-friendly, and insights-driven connections between brands and people. Beyond capturing emails, create short, simple interactions to ask customers for a few pieces of information about themselves in context and in exchange for value. DICK’S Sporting Goods and running shoe company HOKA ask for zero-party data in interactive display ads. The ads use short quizzes to align the content, featured products, and calls to action with the consumer’s stated interests.
- Test contextual targeting now. Contextual targeting allows advertisers to place ads to relevant content, and the methods today are more sophisticated than ever, from keyword-based approaches to semantic, analysis-driven ones. Compared with behavioral targeting, contextual targeting may seem ineffective. But it’s more nuanced than that; recent studies indicate that contextual targeting is more cost efficient than behavioral-based targeting. Launch your testing roadmap now to start learning how new targeting approaches work for you. Consider cost, effectiveness, scale, and sustainability in a privacy-first world. And look for partnership opportunities with your key media publishers for contextual and other audience signals.
- Take a hard look at your agency and adtech partners’ long-term strategy. Agencies and adtech partners that have a diversified approach to audience insights, targeting, and measurement will fare better when facing drastic changes handed down from walled gardens and regulatory bodies. Look for partners that go beyond utilizing identity-based ad targeting, have larger innovation budgets, and can clearly articulate their own position on issues like consumer consent, transparency, and choice.
- Refresh your consumer journey with an eye toward contextual moments and media. Develop audience profiles that unlock insights about consumers’ needs, wants, and behaviors. Use these insights to reveal pain points and moments of delight along the customer journey to inspire new contextual environments and customer engagements that don’t rely on precision targeting.
Get up to speed on the impact of data deprecation on marketing and media strategies. Check out our body of research on data deprecation here to get a deep dive on what it means for marketers.