Tech companies claim that so-called “personalized ads” – a great source of revenue for companies like Google or Facebook – can provide the best online experience for users.
But this type of ‘experiment’ is increasingly of concern to policymakers, mainly because targeted ads tend to rely on large amounts of personal data and invasive surveillance practices, including the user is rarely aware.
The internet has radically changed the advertising industry. What was once a simple interaction between a publisher and an advertiser has now become a complex and dynamic ecosystem, full of intermediaries, such as ad exchange platforms, or supply-side platforms, which facilitate real-time transactions to convey a message to user screens.
A coalition of MEPs tried to mobilize support for a behavioral tracking advertising ban, under submitted amendments to the Digital Marketplace Act – a landmark piece of legislation establishing a ‘to do’ and ‘list’ do not ‘for the largest online platforms, such as Google or Facebook.
They believe that a system in which huge amounts of personal data is sold to the highest bidder, in a very opaque market, violates users’ rights to data protection and privacy.
The sales technique actually uses huge amounts of user data to display advertisements online, including individual location, gender, income, religion, political opinions, sexual orientation, and even though someone is the parent of a child with special needs.
Scary lobbying tactics
However, progressive MPs have failed to convince Liberal and Conservative lawmakers, who fear that a total ban will be disproportionate.
As part of a compromise reached on Wednesday November 17, European lawmakers agreed not to ban this advertising technique. Instead, they introduced stricter rules to protect minors and place limits on data processing with regard to religion, race, union membership and other sensitive data.
Facebook continues to track and collect personal data from adolescents for advertisements on its social media platform, according to new search – contrary to the claims of the social media giant, it will end this practice. Once the tech giant has been accused target teens with weight loss and gambling ads on its social media.
Earlier this month, IAB Europe, representing the digital advertising and marketing ecosystem, launched a campaign against the targeted advertising ban, arguing that such a move would penalize SMEs in Europe.
However, according to Jan Penfrat of European Digital Rights, this is only “a scare tactic”. “Don’t be fooled,” he told MEPs at a hearing on the issue on Friday.
“As long as the advertising is based on personal data, Google and Facebook will have the upper hand because they have already collected this huge amount of data historically,” he said.
An alternative to targeted ads is known as “contextual ads” – which, instead of the user, focus only on the content of web pages. So, for example, an auto insurance ad would be displayed on web pages that car buyers can visit.
Contextual ads to reach 365 billion euros by 2025
According to Erik Bugge, CEO of a European contextual advertising startup called Kobler, these alternative techniques can be a real solution to improving transparency.
“Contextual ads can solve the opacity problem… and the damage caused by the inherited black box nature of behavioral targeting that has prompted advertisers to fund ad fraud and disinformation on the internet today,” he said. he declared to the deputies.
He also argued that the IAB’s arguments are misleading because “an unprotected data-driven market will tend to [benefit a] few dominant players “.
This is partly illustrated when, for example, SMEs provide data about their customers to Google and Facebook, and these tech giants use that data to serve advertisements for their competitors as well.
Bugge urged MEPs to limit the data that dominant players have access to, arguing that “if they continue as they do now, where they have access to everything, they are going to screw up European SMEs”.
Privacy lawyer Johnny Ryan, for his part, also warned EU lawmakers: “You may have targeted [ads] without having any follow-up. But the industry that makes money with tracking wants you to think otherwise.
It is estimated that a targeted advertising ban could jeopardize € 6 billion in ad revenue for app developers.
Meanwhile, the global contextual advertising market is expected to reach $ 412 billion [€365bn] by 2025 as the industry moves away from intrusive techniques.
MEPs from the Internal Market Committee are expected to adopt their official position on the digital market law on Monday 22 November.