What marketers need to know about how GDPR will impact mobile advertising

Last month, ad-tech company Drawbridge shut down its media-buying office in Europe after it was revealed that the firm’s data practices that comb together mobile, desktop and tablet stats for ad targeting would not work under the European Union’s General Data Protection Regulation (or GDPR) that go into place May 25.

According to experts, Drawbridge, which did not respond to inquiries for this story, won’t be the only mobile company to suffer from GDPR. The new regulations promise to significantly shake up digital advertising by giving consumers the right to decide what data they fork over to a company. Violators of GDPR face significant fees of 20 million Euros, or 4 percent of its revenue, depending on which is more. Unlike desktop advertising that’s primarily built with one type of data (known as cookies), mobile advertising layers multiple types of data including location, Wi-Fi and built-in IDs to target ads. In other words, mobile advertising companies have more data to clean up than desktop companies, and GDPR risks setting mobile advertising’s advancements over the past few years back significantly.

“There’s been a lot more attention paid to the industry on the desktop side than the mobile side—it might be that the impact on mobile is even greater than it is on desktop because the mobile ecosystem is based around data and targeting,” said Doug McPherson, chief administrative officer and general counsel at OpenX.

As marketers scramble to assemble data teams and hire privacy experts to spearhead GDPR, some experts anticipate that companies are not prepared to tackle the barrage of stats and signals that mobile devices relay to ad networks and data companies.

Take location-based services that anonymously track a consumer’s location to help marketers pinpoint where to serve ads. Such firms could struggle to meet GDPR’s compliance requirements because “most of those companies don’t have a direct relationship with consumers and the consumer doesn’t necessarily know that that data is being collected—they might need to probably be a bit more explicit and open in terms of the consumer understanding how their data is collected,” said Dan Wilson, head of data and operations at Fetch.

Mobile apps are also loaded full of data loopholes that consumers may not be aware of and need to be addressed for GDPR, said Warren Zenna, founder and principal of Zenna Consulting Group. If consumers consent for an app to use their location after downloading it, they also agree to share their location with third-party data companies that the app’s publisher works with. He added that phones’ built-in IDs are “like fingerprints” that track every action that someone takes. “It’s an extremely revealing amount of data that is shown through an application and yes, I do think without question that GDPR is going to clamp on that data,” Zenna said.

U.S. companies will adhere to EU regulations most likely to avoid any possible swaps of data, but American marketers can build in controls within their apps to detect whether a user is in Europe in order to turn off tracking that would violate GDPR.

Tim Norris, general manager, EMEA for mParticle, agreed, adding that consumers can control the data that apps have through their settings. “As the cookie well dries up, what you’ll see is that brands more and more will think of ways that they can get into your hands and directly own that relationship,” Norris said.

By requiring consumers to opt-in to sharing their data instead of automatically using their data, “there’s going to be a little more quid pro quo between a brand and a consumer on using their data,” said Andrew Sirotnik, Fluid’s co-founder and chief experience officer.

Marketers will also—in theory—reach smaller groups of consumers who have agreed to fork over their data. But that’s not a bad thing either, argued Bridget Fahrland, svp of client strategy at Fluid. For years, brands have aimed to amass as much data as possible to segment their consumers, but under GDPR, less data is more.

“I think it helps them focus on their most important customers,” Fahrland said. “Maybe the so-called scarcity of it will then make [brands] more interested in the data that they do have and start using it in more interesting ways.”