AdColony: “There Is No Alternative Tracking”

Last week marked another episode in the 2021 privacy saga. Google announced that it would not create or invest in alternatives to third-party cookies, which it will kill by next year. In addition, Virginia became the latest state to pass a data privacy law.

Marketing tech companies are widely surfacing solutions to fill the data gaps that these privacy-oriented changes will yield. But companies differ on what approach will work best: IDs rooted in mobile devices or email log-ins, for example, or panel data that users consent to share with advertisers.

Still, other companies and thought leaders are even more polemical, declaring that the era of targeting ads based on individual user behavior is coming to an end. Among those voices is AdColony’s Jonathan Harrop, Senior Director, Global Marketing & Communications. He joined Alan Chapell, president of Chapell and Associates, for a talk with Street Fight about the future of advertising and privacy.

Against identity

Ad tech providers are widely searching for a new way to understand identity as cookies and Apple’s IDFA deprecate. Harrop says this is wrongheaded.

“The solution is to stop thinking about targeting as a function of identity and start thinking about it as its own thing – specifically, contextual targeting. Understanding where audiences are consuming content and then going out and buying media on those channels is where advertising started and operated for decades, for good reason. It’s efficient and it’s scalable.”

Other advertisers and tech firms maintain that contextual ads are not sufficiently effective and that there are ways to do identity-based targeting ethically. Harrop dissents.

“There is no alternative tracking”

“There is no alternative tracking, and anyone who tells you that has something to sell. There are some ad tech companies out there saying there is another form of tracking, but they are wrong. If you do business with them, you are putting yourself at risk. Why? Because this isn’t a one-off rule. This is part of Apple’s core philosophy that if a user does not opt in, you cannot track them. You can’t use their email; you can’t use their IDFA to create a pseudonymous ID for them,” Harrop said.

Of course, the retort is that consumers may opt in — they may choose to provide personal information and allow targeting. This is why ad tech providers say the key to the new era of digital advertising is ensuring consumers see the value in targeting and being transparent about the trade-offs of data collection.

But I sympathize with Harrop’s skepticism. As Gilad Edelman recently put it at Wired, “It’s possible that consumers are happy to have the most minute details of their lives surveilled and monetized in return for seeing ads they might want to click on.” Implied: possible but improbable.

Uncle Sam’s intervention

Debates among enterprises notwithstanding, the federal government may finally pass a data privacy law this or next year that will force some changes. Chapell said he would put the chances of a federal law this year as low as 10 or 20% as Congress tackles other priorities.

But the passage of more state laws, following those by states such as California and Virginia, could force Washington to act. The patchwork of different regulations is a compliance nightmare for companies and difficult to understand for consumers.

Among the good news for companies, Harrop said, is that compliance with Europe’s major privacy regulation, GDPR, will likely cover laws in the US.

“Whatever federal privacy law that does get enacted will likely be less of a burden to comply with than what we’ve already been through with GDPR,” he said. “The slew of actions that GDPR put in motion, and the actual tasks and processes that companies began doing because of it, now serve us. If you’re GDPR-compliant, generally speaking, that will be sufficient.”

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Joe Zappa is the Managing Editor of Street Fight. He has spearheaded the newsroom's editorial operations since 2018 and compiled the daily newsletter since 2016. Joe is a journalist who has written widely about technology, business, and politics. You can contact him at jzappa@streetfightmag.com.