Skip links

How e-commerce brands need to adjust in light of GDPR

Even those of us in the U.S. who aren’t familiar with the nuances of the General Data Protection Regulation (GDPR) have certainly experienced its impact. A slew of updated privacy policies have inundated our email inboxes and website pop-ups.

The regulation, which went into effect last month, concerns data protection for individuals in the European Union. And while its premise is to give control over uses of consumer data in the form of increased transparency surrounding data collection and applications to EU citizens, its impact is more broad.

United States businesses are not exempt from compliance, any U.S. company that markets their products and does business online will have to work to do. As Kris Lahiri noted in his recent Forbes article, “If your organization manages data that involves even one EU citizen and you don’t properly comply with the new GDPR, you can face fines up to 4% of your global revenue (up to £20 million).”

And it’s not even just brands targeting EU consumers that have to be mindful of the changing landscape. Data protections in the EU are thought to be setting the pace for other territories, and thanks to data breaches with global impacts like Facebook’s recent Cambridge Analytica scandal, consumers are more mindful, and more vigilant, about the way their data is handled. The result is a rapid shift in consumer sentiment that demands stronger data protections from the brands with which they engage.

“The digital ad community understood that GDPR was going to swiftly change the advertising landscape and consumer expectations, alike,” says Andrew Beehler, Senior Manager of Programmatic and Yield Operations at Digital Trends, a digital media company. “The advertisers and publishers that will win in this new ecosystem are those that double-down on a consumer-centric approach to advertising.”

Digital Trends was one of the first media companies to look at GDPR as an opportunity for advertisers and publishers, alike, offering advanced creative and GDPR-compliant traffic, and it’s reaping the benefits.

For e-commerce brands that hope to get ahead of data protection trends, here’s what we can learn from them.

Following Regulations Can Increase Opt-Ins

It’s no secret that collection of consumer data revolutionized marketing and sales, thanks to in-depth customer analytics. That’s precisely why GDPR has been the talk of 2018 for its advertising implications, particularly in e-commerce circles. Ignoring GDPR regulations is ill-advised, not only because your company can face fines, but because data curation is only going to become more important, and more competitive, in light of the new regulations.

“If your company is using data in ways that serve and benefit the consumer, many of your customers will gladly opt-in,” says Beehler. “It’s really the bad actors that haven’t been transparent about the way they’re using data that stand to lose. And when data collection and reporting is GDPR-compliant, the data actually becomes more valuable.”

Taking a transparent and customer-centric approach to marketing and advertising shows your customers you see them as people and not data mines. Furthermore, letting customers know how you’re using their data allows you to start conversations about how your practices can better support their customer experience.

Use Compliant Traffic Sources

As a result of GDPR, programmatic ad buying has plummeted in Europe, and it’s not just impacting European businesses.

“Making matters more complicated is the massive shortage of GDPR-compliant advertising platforms available on the market right now,” says Susan Akbarpour in a recent article. “And unfortunately, this doesn’t appear to be changing anytime soon, as many programmatic advertising technology providers, ad and affiliate networks are clinging to phony marketing metrics like cost per click (CPC), click-through rates, cost per thousand (CPM) and more — all of which rely on cookies.”

“Prior to GDPR, brands could collect data via cookies stored in a user’s web browser, without any real input from the consumer,” says Beehler. “Because GDPR calls for transparency about the use of these cookies, it’s really shaking up what we know as CPC and CPM rates, so advertisers should be careful when looking at these traditional metrics in the new advertising ecosystem.”

The advertising landscape is quickly changing and businesses are vying for new sources of traffic. Facebook and Google took $8.8 billion in legal hits on day one of the GDPR’s activation, and media companies like the Los Angeles Times and New York Daily News have blocked EU traffic in an effort to hedge against fines. Of course, lack of publisher ad supply means dwindling traffic for purchase. Digital Trends is one of the first media companies to offer GDPR-compliant traffic to advertisers.

“As a result of the shakeout, seeking out compliant traffic sources is going to be essential,” says Beehler.

Find Your Competitive Advantage

As of late last year, it was estimated that only 21% of U.S. businesses had a plan in place for GDPR. There’s still room to get ahead of competitors, and the benefits of GDPR for companies who get on board extend past the regulatory realm. In addition to establishing brand trust, compliant businesses may become more attractive to potential affiliates.

If you sell ad space on your website, for example, championing the GDPR puts you in an advanced position when it comes to holding premium ad space. And if you don’t, you’ll still have an edge over competitors who are either dealing with fines or having trouble reaching their customers.

Double-Down On Creative

If you can’t depend on the same level of programmatic ad buying to reach your target, there are other ways. Not only will influencer marketing take center stage for its ability to connect brands with their target audiences outside of programmatic ads, but strategic public relations campaigns can also help to supplement marketing reach and frequency to strengthen brand recognition.

Meanwhile, the programmatic advertising that businesses invest in will have to be spot-on.

“A focus on creative ads, and activations that can be leveraged through programmatic to reach your target demographic will help your message reach more people,” says Beehler. “We’ve built an internal agency for that purpose.”

GDPR isn’t a death sentence for e-commerce companies. Because we’re all in the same boat, it levels the playing field for those of us that collect data online, encouraging us to be both more transparent, more customer-focused and more creative.

And if you’re still anxious about the new advertising landscape, perhaps you can get a good night’s sleep with Calm’s meditative new recording of the GDPR text read in the soothing voice of former BBC radio announcer Peter Jefferson. Who knew something so chaos-inducing could also be so relaxing?

by Jia Wertz
source: Forbes