Marketers Weigh the Downstream Effect of Changing Privacy Regulations
Virginia became the latest state to pass digital privacy legislation when Governor Ralph Northam signed the Consumer Data Protection Act (CDPA) this month, but it won’t be the last. The piecemeal approach to privacy standards happening across the United States right now is creating a challenge for marketers who are faced with complicated, and sometimes conflicting, regulations.
State privacy laws accumulate amid federal inaction
California was the first state to pass its own unique privacy legislation in 2018. That legislation was seen as California’s response to the European Union’s General Data Protection Regulation (GDPR). With Virginia entering the fray with its own legislation, experts now say it’s only a matter of time until other states begin to follow suit.
“Virginia’s passing of the Consumer Data Protection Act is a monumental change for data privacy legislation in the United States. As a second state jumps on the bandwagon, it proves California’s legislation is not a singular case,” says Dan Clarke, President at IntraEdge. “It was simple when businesses just had California’s legislation to comply with, but now Virginia symbolizes a trend.”
What makes Virginia’s new legislation challenging for marketers, explains Clarke, is that the CDPA isn’t the same as California’s CCPA or the European Union’s GDPR. Despite closely aligning to the GDPR, Virginia’s law is unique. For businesses that aren’t currently complying with CCPA, there are material challenges beyond notice change from attorneys that need consideration.
“There will be implications with vendor relationships, as the CDPA defines a new right to correction and a newly created category of sensitive data. This category is the first of its kind in passed privacy legislation and requires opt-in consent for minors and sensitive data,” Clarke says.
Even companies that are compliant with GDPR now face a new right: the right to appeal. With the addition of the right to appeal, businesses must publicly confirm that they won’t try to reverse de-identified data.
“All in all, Virginia’s legislation points to a larger trend across the nation as more states consider and pass consumer privacy legislation,” Clarke says. “And businesses already compliant with GDPR and CCPA, aren’t graced with a head start.”
That need for businesses to uniquely comply with each of these laws individually is going to be a challenge moving forward, particularly as more states enter the fray. The new patchwork of regulations will impact advertisers and marketers in a number of different ways, but Charles Farina, head of innovation at Adswerve, says fully embracing this new privacy-first approach is essential.
“Future privacy laws from states, and eventually a federal level, are inevitable, and it’s up to companies to embrace a privacy-first culture to build trust with their consumer base,” he says
To prepare, Farina recommends that company leaders restructure certain data and metrics operations, aligning existing processes to comply with current and upcoming consumer privacy laws.
“At the end of the day, consumers are asking for more transparency when it comes to the sharing of their personal data, and advertisers who are at the forefront of this movement will ultimately win out,” he says.
The trade-offs of anti-tracking sentiment
At TrafficGuard, a company that detects and reports on digital ad fraud, Founder and COO Luke Taylor says measures like the CDPA, CCPA, and GDPR disproportionately hurt smaller publishers and smaller businesses, while corporate giants like Google and Facebook have the luxury of large teams that can navigate new changes with ease.
Looking forward, some of the privacy regulations that were put in place to do good could have a downstream effect of creating more impersonal consumer experiences. Taylor says that tradeoff isn’t being adequately communicated to consumers.
“While consumers should have the right to decide what is collected, sold, and shared about them, they should be making an informed decision,” he says. “Most people think of ‘advertisers’ as big headless corporations and digital advertising as this sinister dark art. But it is an ecosystem — businesses of all sizes depend on online advertising and through it, they are able to bring more choice and innovation to their markets.”
Stephanie Miles is a senior editor at Street Fight.