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A Look at the Short and Long-Term Impact of GDPR

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GDPR has already made major waves in the mobile advertising space and it hasn’t even gone into effect yet. Depending on how it’s ultimately received by consumers and in politics globally, GDPR has the potential to disrupt mobile advertising. Currently limited to the EU, GDPR “focuses on ensuring that users know, understand, and consent to the data collected about them” and is forcing mobile publishers and mobile ad platforms to consider changes to their opt-in processes and revenue models.


What to Expect Short Term

The big question facing the mobile industry beginning May 25th is “how much will this impact my business?”.  In terms of a bottom line, it’s impossible to answer that question with precision. However, we can get an idea of breadth and magnitude with some key benchmarks. According to research from the mobile measurement company Adjust, mobile 79% of mobile apps outside the U.S. have a footprint in the EU. When you drill down by country, about 93% of U.S. apps have a user base in the EU.


To answer the initial question, essentially everyone is impacted to some degree. How much depends on a couple factors:


  • How much new opt-in rules depress inventory
  • How much of a publisher or platform’s audience is comprised of EU users

Quantifying Impact of Opt-In

Adding new permission requests, as GDPR will require for many publishers,  will likely increase overall abandonment rates in addition to drastically suppressing available audiences. To get an estimate of how much the new permission requests will deplete audience, we can benchmark with email opt-ins.


According to research from GetResponse.com, moving from single to double opt-in results in a 20-30% lower conversion rate. That is a significant difference, especially considering the intent to share information is present in both processes. The only difference is the increased effort required for a conversion. One might assume based on this information that audiences could suffer a minimum 20% suppression based on the additional effort of “opting in” alone.



Long Term Implications

The big concern for global advertisers and ad platforms moving forward is whether or not GDPR becomes a broadly-adopted model.  If it does, the entire industry will need to make adjustments and consider alternative methods for targeting to complement waning inventory as fewer impressions are made available.


A look at a timeline on net neutrality policy and regulation would suggest that at least in the U.S., any regulations would likely be met with resistance and would similarly take years to resolve.


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In any case, the possible adoption of GDPR-like regulartion in any market increases risk and emphasizes the need for publishers and platforms to innovate and diversify their targeting model.


Start mitigating risk now, not later

Fortunately, there are multiple methods for effective ad targeting.  Some of which, will not be impacted by GDPR. Any approach that targets based on inventory qualities, and not end user parameters, can be used to deliver meaningful impressions with high performance.


Appnique, for example, is capable of using publicly available data and mapping insights about those users to inventory based on affinity signals. The result is high performing ads without the need for sensitive data. In an environment where a large segment of your audience can no longer be targeted based on cookies or past behavior, using inventory as a proxy for user profiles is a compelling substitute.

 

Conclusion

Although GDPR will affect most major mobile apps and advertisers to some degree in the short term, it's more meaningful impact might be what it signals for the future: a world in which control over user data shifts from companies to consumers. Ad tech companies that innovate and adapt now could be the ones that benefit from disruption in the future. 

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