Global programmatic is the next frontier for U.S. marketers seeking to expand their brands’ footprint. According to a recent survey and whitepaper from IAB and Winterberry Group entitled, “Going Global: Programmatic Audience Development Around the World,” 72%U.S. and U.S.-based global publishers are pursuing a data-driven, programmatic approach to audience engagement in non-U.S. markets. But only 33.8% of advertisers are currently pursuing programmatic audience development globally, though all said they intended to within the next two years.
Why the disparity between numbers of publishers and advertisers? Perhaps marketers have been spooked by Europe’s privacy laws, which are more stringent than in the U.S., as 30 U.S.-based companies recently discovered.
U.S. watch group Center for Digital Democracy (CDD) filed a petition with the FTC, claiming that 30 American digital ad-tech companies are in violation of the EU-US Safe Harbor agreement signed back in 2000. The agreement requires US-based companies to adhere to E.U. personal data protection principals that govern how European consumer data is collected and used.
According to the CDD filing: “The commercial surveillance of EU consumers by U.S. companies, without consumer awareness or meaningful consent, contradicts the fundamental rights of EU citizens and European data protection laws, and also violates the intention of the Safe Harbor mechanism to adequately protect EU consumers’ personal information.”
The CDD goes on to say that American digital ad-tech companies are essentially using “exceedingly brief, vague, or obtuse descriptions of their data collection practices, even though Safe Harbor requires meaningful transparency and candor.” Consequently, they’re pressuring the FTC to use its subpoena authority to thoroughly investigate the practices of these companies.
It’s important to note that the companies named in the complaint to the FTC are hardly shady players. They’re familiar and respectable pillars of the American digital ad-tech ecosystem, including Acxiom, Adobe, Adometry, AOL, AppNexus, BlueKai, Criteo, Datalogix, DataXu, EveryScreen Media, ExactTarget, HasOffers, Jumptap, Lotame, Marketo, MediaMath, Neustar, PubMatic, Salesforce.com, SDL, SpredFast, Sprinklr, Turn, and Xaxis.
America’s top brands and agencies partner with these companies, and they reasonably assume that their tech partners ensure their campaigns are in in full compliance with all local laws. Those tech partners may very well be, but the CDD doesn’t believe that to be the case, and has petitioned the FTC to act.
If these companies are found to be in violation of the E.U.’s privacy laws, what does that mean for the brands that rely on them? To be sure, these brands could face some risk since European consumers have powerful yet easy-to-use tools at their disposal to control both how their data is used and the types of ads they see. For instance, the European Digital Advertising Alliance (EDAA) created pan-European standards for transparency and consumer control over online behavioral advertising (OBA). If consumers feel an ad violates their privacy, they can go to a website and opt out quicker than they can get a cup of coffee. Opting out doesn’t end advertising mind you; it merely ends the kind of audience targeting that is the foundation of programmatic marketing.
But let’s be clear on one thing: E.U. privacy laws are not antithetical to programmatic marketing. In fact, nothing could be further from the truth, and the proof is in the sustained and rapid growth of programmatic marketing throughout the continent. According to Adform’s most 2Q14 European RTB Trends report, programmatic spending increased by 51% from Q1 to Q2, and year over year spending leapt an impressive 214%.
Additionally, European programmatic is increasingly sophisticated. More publishers are participating in programmatic trading, and certainly in private marketplaces, which in 2Q14 accounted for 27% of total programmatic ad spend. Programmatic rich media grew an astounding 559%, and now accounts for 10% of media traded across the continent. All of these trends point to both healthy growth, led by Europe’s biggest brands, agencies and publishers.
What’s the take-away for U.S-based marketers, agencies and even publishers? By all means, feel confident to launch your programmatic campaigns in Europe, but expand your pool of ad-tech partners, at least for the short term. Many E.U. partners have mastered the privacy issues because their existence is dependent on doing so. How do you know if a potential partner is a safe bet? Look for an EDAA/OBA Trust Seal and IAB Certifications, which are awarded only to companies that can demonstrate full compliance.
Martin Stockfleth Larsen is the CMO at Adform, a premier partner for Europe’s digital agencies, advertisers and publishers, offering the leading end-to-end platform to support all aspects of multi-screen display advertising.