The ban on targeted advertising and its potential impact on society – IAB Europe report

Two weeks ago, the European Interactive Advertising Bureau (IAB Eu) issued a report that the ban on personalized ads is expected to have a number of very negative consequences. This could even affect European demographics, lowering the standard of living for Europeans.

According to Dr. Daniel Knapp, who is chief economist at IAB Europe, advertising is the foundation for media pluralism in Europe. Expert suggests that advertising is key to keeping the service that is the internet free and open. This is also an important consideration for those advertising their goods and services, as more than 66 percent of. revenues depend on the personalization of their ads. What’s more, advertisers pay almost 3 times more for this form of advertising than they normally would.

European regulations will destroy the market?

The report indicates that a digital transformation of business is underway. This is mainly due to the pandemic market situation that determines such actions, in a way forcing entrepreneurs to do so, according to the principle: You are not in Google? You’re not there at all! This is not only a compulsion, but also a chance for companies to develop, however any legislative interference in the market may drastically affect financial losses of companies, especially smaller ones that cannot afford to go through such changes.

But what’s at stake?

Campaign handling and ad personalization systems allow to reach the largest group of stakeholders relatively cheaply. Stakeholders is the key word here, as, based on their behaviour and preferences visible on the web, advertisers can have a better chance of reaching a potential customer. It is also beneficial from the point of view of the advertiser, who makes his space, time and resources available in a specific way to maximize profits for himself and his client. But it’s also not insignificant for ad audiences. I don’t think most of us like advertising, but we are used to it by now and prefer to see something that actually interests us rather than random and superfluous accessories which, if they don’t give us a headache, maybe make us a little irritated.

European small and medium-sized companies are threatened

The inability to target messages will not only affect reduced efficiency advertising. This one will decrease by as much as when we could send content to a hundred potentially interested parties of people, so now this content can hit the 100 potentially interested in it people. This is a big threat for smaller entities. Greater expenses for advertising with none at all not increased certainty of their conversions, with simultaneous reduction of the budget for other investments – this may drastically affect the operation of the entire European market. Additionally, there is a chance that it will lead to bankruptcies, takeovers and slow monopolization of the market.
SAPO’s business director – seems to agree with this; The recent digital boom is a strong signal that Europe’s future lies in technology and innovation. But policymakers are at a crossroads. They face a choice between creating a strong framework that allows all companies to thrive at the forefront of digital competitiveness, or watching Europe lag behind its global competitors. The European economy needs small, agile businesses with access to a range of innovative tools, such as targeted advertising, to enable them to compete and help secure a thriving digital economy – says Fernando Parreira.
Paweł Kopacki is of a similar opinion, according to whom targeted advertising is not only essential for the economy, but also has social and cultural value. regrets the fact that it is omitted in such statistics. – It supports a pluralistic media landscape, provides a key marketing channel for SMEs, is linked to the promotion and preservation of European culture, and is a growth engine for European champions, enabling them to diversify their customer base through advertising – comments the director at Polish digital publisher Wirtualna Polska.

Counter to the report

Karolina Iwańska from the Panoptykon Foundation, who provided information to the Press portal, is of a different opinion.en. The woman thinks that Amendment 606, that is, this provision of the new law on personalization of advertising assumes that dominant entities in digital markets would not be able to target ads on the basis of user behavior. Karolina Iwańska argues that the market is currently controlled by two giants of Big Tech, namely Facebook and Uncle Google’a. It adds that these entities are in possession of the largest collection of information and the possibility of using it, and the law introduced would prohibit them from cooperating with each other on acquired data. It is supposed to make it harder for them to operate and reduce their budget revenues.

In the article, we also read that the Board of Trade and Networks has expressed opposition to such an amendment. It also expressed great concern about the future of the European economy. This was clearly contradicted by the aforementioned opponent. Ms. Iwańska states that the two big players mentioned above also belong to the same board, and that the action of this group is only of a lobbying nature. According to a Panopticon member, the new law will force all advertisers to get more creative with the industry, and not treating everyone as a collection of information.

European Entrepreneur, Don’t Dramatize! also quotes Patryk Goławski, senior performance specialist at Marketing Factory. The expert is convinced that limited profiling will only apply to personal data. It means that for an ordinary marketer it will involve the loss of only some data, while platforms such as Facebook offer, after all, many more opportunities to reach the audience. Mr. Patrick declares that the prohibition on combining personal information from different sources aboutit will be more difficult to identify your target audience, but it will not be impossible.

The topic and its take can be perceived differently depending on the entity you represent. It will probably be perceived differently by sociologists, economists, entrepreneurs or specialists. As you can see on this occasion, the topic can be polarizing and non-obvious. However, no one is asking themselves about the users of the Internet – the recipients of these ads. Whether the planned changes will cause drastic changes in the ads we watch and how they will ultimately affect advertising budgets we will find out soon…