The Digital Services Act was passed by a solid majority last Thursday (January 20) in the plenary of the European Parliament – and today some marketers are crying. The result will be a fundamentally different digital ecosystem, and it will also change digital marketing.
But I think now may be the time to rejoice. More regulation is the only way to clean up what has been dubbed the “Digital Wild West”, and certainly has been. Digital marketing needs more regulation to separate the good from the bad in a business that has been too unregulated for too long.
The Digital Services Act introduces new principles that should have been at the heart of any professional marketing operation for years.
Take the principle of transparency as an example; the DSA requires any user to be able to identify who funded a targeted advertisement that the user sees somewhere on the Internet, and to be able to find out why that advertisement was targeted to that particular user.
The DSA also introduces 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 specifically targeting minors.
On consent, the DSA also suppresses “dark models”. When you access most websites today, the “accept all cookies” button in the cookie box will likely be green, and the “dismiss all” button will be gray, small, or hidden in a stream of two or three clicks designed to make you give up and give in. These dark patterns will be illegal. And if that doesn’t work (it didn’t with GDPR), the DSA introduces possible new regulators coupled with hefty fines.
These are huge steps, and if adopted after the trialogue, they will undoubtedly lead to a fundamental rethinking of targeted advertising. We need to change the toolbox, and some of the tools in it will have to be thrown away or locked up forever.
But is it really such a bad thing?
The marketing industry feared one thing more than anything when the Digital Services Act was first introduced just over a year ago: that it would lead to a ban on targeted advertising.
This would rightly have been a disaster for digital marketing, and it could have had disastrous consequences for other parts of the digital ecosystem as well. For example, 81% of European digital media revenue comes from advertising. This would be considerably lower if media companies were limited to contextual ads.
The consequences of a total ban on all targeted advertising, in particular for small and medium-sized enterprises, would also be unpredictable. So it’s a good thing that the fears ultimately proved unfounded.
However, even if targeted ads survived the battle, they won’t survive the war – at least not in their current form. There is a fundamentally unsustainable condition in the online ecosystem when it comes to third-party tracking and large amounts of data collected with little or no informed consent.
A recent survey carried out by Business Denmark/Userneeds for Markedsføring showed that 61% of Danes find it “not possible to understand or control what they consent to their data being used for online”. Only 11% of respondents believe they have a complete overview of the data they provide to advertisers when online.
Confusion, indifference, frustration
This is a huge threat to long-term based targeted advertising. Consent is often given out of confusion, indifference or frustration to access content or simply to move on. Most people have no idea what they are consenting to.
If this were a fundamental principle in a real business on the main street, I would say that the business has no long term future ahead of it. The same goes for the digital sphere. It is not a viable situation that significant parts of an online ecosystem fundamentally depend on the consent of people who have no idea what they are agreeing to.
So where to go from here?
Unfortunately, the biggest challenge for digital marketing may very well be the company’s long and proud tradition of not sticking together. Finding common ground in the world of marketing is necessary if we are to reinvent digital advertising in a sustainable way. The digital advertising industry must adhere to the principles of ethics, transparency and informed consent. We need to find a new balance between personalization for the good of the user and unnecessary tracking.
The ball is now in our court. And if we don’t take this opportunity to rethink digital marketing ourselves, then it will be done to us.
Christel Schaldemose, MEP, powerful parliamentary rapporteur on the Digital Services Act, said it unequivocally when I interviewed her this week: “If (marketing) companies don’t raise their standards themselves, we we will have to regulate them as politicians.
“I could wish for a higher moral standard and more debate in the company,” she added.
If anyone is in doubt, it’s called the regulator’s threat: if you don’t self-regulate, we will.
Let the Digital Services Act be the start of a digital marketing overhaul that balances the interests of consumers with those of businesses. We will need to collect less data, we will need to be more transparent in everything we do and we will need a new code of ethics. But above all, we must do it together.