May 25th is when the General Data Protection Regulation (GDPR) will be enforced – I wrote previously on some steps advertisers can take to prepare themselves for this, but since scribing that post I’ve been thinking about the impact GDPR will have on programmatic performance (i.e CPA/ROI/CPC/vCPM etc.).
One of the assumptions I think we can make with GDPR is that opt-in users will be an absolute premium for everyone – these users will likely consistently opt in across a number of advertiser properties which means when they become available for targeting with an ad impression the number of buyers wanting to bid for that impression should increase – as there are less chances to serve impressions to the overall retargeting audience – this therefore means that CPMs will increase.
1. Advertisers will start to pull spend as their retargeting campaigns are no longer performing effectively (this is highly likely which poses threats to companies who operate on a % of spend as their only commercial model)
2. Buyers will start to loosen some of their targeting thresholds to increase retargeting delivery; whitelists, viewability and frequency capping
3. The CPMs for users could go through the roof, and I’m talking like 10x from where it is today, so whilst publishers may see a reduction in total number of high value bids (and overall sell through rate), the actual value of the bids will be much higher which could offset that perceived loss
Summary & Actions
It’s going to take some smart optimisation teams to mitigate the challenges that GDPR will possess for brands – managing the balancing act of delivering volume of sales vs efficiency of sales will never be tougher. Advertisers should align closely with these members of their extended team to understand the risks associated with their campaign delivery.
The programmatic media market will become highly volatile and advertisers should start scenario planning now; take a look at the existing media plans, what happens if the ability to target users (in retargeting and 2nd/3rd party data strategies) radically drops? If you start to manage this upwards now, start to reforecast where possible, then you’ll be very appreciative of the upfront work come May 25th.
Above all of this though, I definitely urge marketers to be patient as the impact of GDPR starts to level out. GDPR is a great thing for our industry but in the short-term there will be some headaches with campaign delivery and performance.
For further detail on how to plan for a post-GDPR world, The Programmatic Advisory are running a number of workshops, details here: http://theprogrammaticadvisory.com/gdpr-workshop/