The adtech exodus is about user experience, not GDPR

by Raman Sidhu Raman Sidhu is vice president of Beemray.
originally posted at CityA.M.

Since GDPR came into force, the advertising technology industry appears to have gone unusually quiet.

While some believe that the regulation is a good thing, and that a clean house leads to efficiency down the line, others have looked GDPR dead in the eye – and fled.

Adtech companies are famous for hiring opulent yachts each year that line the harbour around the main Palais venue at Cannes Lions, the advertising industry’s big annual get-together, which kicks off today. The size of these yachts has famously been used as a proxy for the health of adtech, with 2018 expected to see fewer yachts than previous years.

GDPR is a big reason for choppy waters in adtech, but that isn’t the only factor.

The anecdotal stories of people falling off yachts are probably fictional. But no one can doubt that expenditure by heavily VC-backed companies, with arguably no differentiation in proposition, went well overboard around a high watermark of yacht-filled insanity at Cannes Lions in 2015. It seemed that the quality of entertainment was the USP, and everyone was drinking the Kool-Aid.

How things have changed. Companies including Drawbridge, Kargo, and Verve (many of which used location data) have shut up shop in Europe, citing onerous GDPR compliance as the main reason.

This is disingenuous at best. It’s more likely that they are shutting operations for an altogether more pressing reason: they are struggling to deliver value in an increasingly crowded marketplace.

Getting data right, ensuring that the right permissions are in place, and targeting consumers on their own terms is the only way forward. The consumer is done with pointless retargeting, meaningless messaging, and intrusive communications, all of which offer little value to the brands buying the media, or to the people consuming it.

Companies which believe that operating outside of Europe mitigates their regulatory responsibility are sadly mistaken – at their expense. Any business that crosses EU borders or touches EU consumers, no matter where it is based, is bound by the regulation.

But this is symptomatic of a wider problem. Adtech vendors haven’t been overly concerned with user experience. It’s always been about volumes, monetising data, and selling products based on assumptions and relationships, rather than facts or science.

Expect a change in tide. User experience is becoming a key driver of success. Intelligent use of clean first-party, permitted or anonymised data has the potential to improve engagement and experience. This is about offering clear value to consumers, rather than just playing the numbers game.

Here lies the paradigm shift. Over the next few years, marketing will switch emphasis from campaigns to ongoing conversations and interactions. Modern marketers will engage in customer-centric conversations that – like any meaningful relationship – deepen over time.

Campaigns will be of less importance, because marketing will instead consist of building logic to treat certain consumers in particular ways, according to the business objectives at that point in time.

New approaches, and investments in actionable data intelligence and analytics, will be critical to success. Why? To enable meaningful interactions, using moment-driven context, proactively guiding the consumer to the next best interaction.

Those who own their intelligence, and can transact on it with immediacy, will be in a position to win, leaving traditional adtech vendors with little room for manoeuvre.

Is GDPR to blame? Certainly not, but it sure did kick us in the right direction.