To Opt in or Not to Opt in?

Meta has found itself in the headlines again due to another debacle with lawmakers, this time with the European Union over a five year long legal conflict regarding personalized ad targeting for EU users. After losing a series of regulatory rulings, the tech company has conceded and will ask users permission before displaying personalized advertisements. This affects Facebook and Instagram social networks and is no doubt a concern for the company as it makes almost all of it’s revenue from advertising, 97% of the $117 billion in revenue for 2022, to be exact.??

While “Facebook and Instagram users had effectively agreed to allow their data to be used in targeted advertising when they signed up to the services' terms and conditions”, this is no more and Meta has published a statement saying; "Today, we are announcing our intention to change the legal basis that we use to process certain data for behavioural advertising for people in the EU, EEA (European Economic Area) and Switzerland from 'Legitimate Interests' to 'Consent'."?

IOS users will already be familiar with this process as Apple introduced a similar requirement in April 2021 with their IOS 14.5 update, which demands app developers to ask users permission to use data to displayed personalized ads. However, this new development marks a drastic change as it’s now applicable not just for the Meta IOS apps, but all Facebook and Instagram users across the European Union.??

Meta has assured that there will be “no immediate impact to our services in the region” and that “advertisers will still be able to run personalized advertising campaigns to reach potential customers and grow their businesses." However, now that consumers will be given the choice to opt out of data sharing in exchange for personalized ads, there is little doubt that some will. And there is certainly concern that similar situation could arise in Canada, the USA, or elsewhere. In fact, the UK’s Information Commissioner Office has already stated they are paying “close attention” to the situation.?

Understandably, many brands might be worried about the impact situations like this could have on their personalized marketing campaigns. After the launch of IOS 14.5, the effect on advertising was pronounced. As reported by DigiDay, “in the first few months of Apple’s actual crackdown, return on ad spend and cost-per-acquisition numbers weren’t anywhere as good as they used to be, according to Freddy Dabaghi, svp of media at MMI, a Texas-based, full-service agency, who added that the agency, which serves clients like Microsoft, Olay and Amazon, ended up spending more money or more time running campaigns to glean some learnings on performance.”??

However, while the initial release was a rocky time for advertisers and brands, both adapted in this new landscape. The update highlighted the need for the diversification of media spend into avenues that would not be affected by this new software. It highlighted the importance of incorporating a variety of KPIs to measure success like brand lift and brand awareness studies, creating a more encompassing view of campaign success.??

Lastly, it underlined the importance of first-party data which brands and advertisers will become increasingly hungry for and play an increasingly important role in the campaign planning process.??

For now, the EU has not released a date that Meta must implement this new process by, but likely in the coming months. To reiterate, this only concerns EU users and there is no affect to those in Canada, the UK or the US. Even in the event such a law was to be passed in any of the aforementioned countries, it does not spell the end of personalized ad campaigns and brands needn’t be too concerned.??