Digital marketing should rejoice at more EU regulation

The Digital Services Act was adopted by a large majority last Thursday (January 20) in the plenary session of the European Parliament – and today, some marketing professionals are weeping. The result will be a fundamentally different digital ecosystem, and this will change digital marketing as well.

But I think it’s time for joy. More regulation is the only way to clean up what has been dubbed the “digital wild west,” and it certainly was. Digital marketing needs more regulation to separate the good from the bad in a business that has been unregulated for too long.

The Digital Services Act introduces new principles that have been at the heart of any professional marketing for years.

Take the principle of transparency as an example; The DSA invites any user to be able to determine who has funded a targeted advertisement that the user sees somewhere on the Internet, and to be able to see why that advertisement is targeting that particular user.

The DSA is also introducing a new ban on targeting ads based on sensitive information such as religious beliefs, sexual orientation, and racial or ethnic origin, as well as a new ban on digital ads that specifically target minors.

When approved, the DSA limits “dark patterns”. When you go to most websites today, the “accept all cookies” button in the cookies box will likely turn green, and the “deny all” will be greyed out, small or hidden in a two or three click flow designed to make you give up . These dark patterns would be illegal. And if that doesn’t work (not with the GDPR), the DSA offers potential new regulators along with hefty fines.

These are huge steps, and if adopted after the beta experiment, they will undoubtedly lead to a fundamental rethink of targeted advertising. We have to change the toolbox, and some of the tools in it will have to be thrown away or put under lock and key forever.

But is this really a bad thing?

Marketing businesses feared one thing more than anything when the Digital Services Act was first introduced a little over a year ago: that this would lead to a ban on targeted advertising.

This could have truly been a disaster for digital marketing, and may have had disastrous consequences for other parts of the digital ecosystem as well. For example, 81 percent of European digital media revenue comes from advertising. This would be much less if media companies were limited to contextual advertising.

The consequences of a blanket ban on all targeted advertising, especially for small and medium-sized businesses, are also unpredictable. So it is good that the fears turned out to be unfounded in the end.

However, even if targeted ads survive the battle, they won’t survive the war – at least not in their current form. There is a fundamentally unsustainable state in the online ecosystem when it comes to third party tracking, and the vast amounts of data being collected with little or no informed consent.

A recent survey by Business Denmark/Usersneeds for Markedsføring found that 61 per cent of Danes find it “not possible to understand or control what they give their consent to have their data used online”. Only 11 percent of respondents feel they have a comprehensive overview of the data they provide advertisers with when they are online.

Confusion, apathy and frustration

This is a huge threat to existing targeted ads in the long run. Consent is often given out of confusion, apathy, or frustration to get to the content or just to move on. Most people have no idea what they are agreeing with.

If this was a staple of a real high street company, I’d argue the business didn’t have a long-term future. The same goes for the digital sphere. It is not a viable situation for important parts of the online ecosystem to depend primarily on the consent of people who have no idea what they are consenting to.

So where do you go from here?

Unfortunately, the biggest challenge to digital marketing may be the company’s pride and long tradition of not standing together. Common ground is needed in the world of marketing if we are to reinvent digital advertising in a sustainable way. The digital advertising industry needs to adhere to the principles of ethics, transparency, and informed consent. We have to strike a new balance between personalization for the benefit of the user and unnecessary tracking.

The ball is in our court now. And if we don’t take this opportunity to rethink digital marketing ourselves, it will be done for us.

“If the (marketing) company does not raise its own standards, we will have to regulate it as politicians,” said Kristel Chaldemos, MEP, Parliament’s powerful rapporteur on digital services law, when interviewed this week.

“I can wish for a higher moral standard, and more controversy in business,” she added.

If anyone is in doubt, this is the so-called regulator threat: If you don’t self-regulate, we will.

Make the Digital Services Act the beginning of a rethinking of digital marketing that balances consumer and corporate interests. We will need to harvest less data, we will need to be more transparent in everything we do, and we will need a new ethical charter. But first and foremost, we need to do it together.

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