It is particularly the latter directive that is making industry sector companies shake with fear and poses many questions about the future sustainability of organizations whose revenue is based on advertising. Although protecting consumers is obviously a duty of the institutions, it is also necessary to work in a targeted way on understanding the dynamics of the advertising industry to define consistent rules for healthy market development. Advertising based on data potentially brings benefits to all stakeholders: first of all to the consumer because failure to consent to tracking for profiling purposes would not reduce advertising pressure but would eliminate the possibility of receiving communications targeted to one’s profile and interests. Interest, however, is also high for investor companies because profiling enables to increase the effectiveness of advertising and reduce dispersion.
There are also other two other important considerations.
The first: the new provisions impact all market players, including the big Over the Top (such as Google, Facebook or Amazon), but the worse consequences will fall just upon local publishers. Contrary to most other “publishers” in fact, OTTs, can leverage large volumes of profiled user data and will therefore continue to have more assets to attract advertising investors. Additionally, these players have stronger “negotiating power” than all other “third parties” (often unknown to consumers) in trying to get users’ consent in exchange for a better user experience of their services. The risk is therefore that these players’ monopoly, which today already hold over two thirds of online advertising collection in Italy, becomes even stronger.
For all these reasons, main European publishers are voicing their concerns and last week sent an open letter to the European Parliament and Council to express all their doubts and request substantial amendments to these points. The game is far from over.