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Industry insiders are noting shifts in how PPC ads operate–and attributing the changes to evolving data transparency policies. The golden age of PPC could be ending–and here’s why.
The last five years have truly been the “golden age of data”. Data collection, aggregation, and analysis have been incredible with the rise of social media (and the recent merging of some major platforms like Facebook and Instagram). It’s hard to argue that marketers have had more information available at their fingertips than now. This massive amount of data has been used to benefit brands and companies’ digital marketing through PPC (pay-per-click) advertising.
However, over the last couple of years, there has been a trending shift towards better data transparency in the tech space. This shift has been mostly spurred on by various ethical violations and scandals across social media and big data gathering platforms. Recently, more legislation and policies have been introduced at various levels to encourage better data governance, transparency, and rights for users to permit various levels of data collection.
But–what do these changes mean for PPC marketing initiatives? How will it affect businesses’ ability to advertise to their target audience? Let’s take a look.
What are PPC ads? What does Data Transparency mean?
PPC Ads: PPC (pay-per-click) marketing is a digital advertising strategy that charges the advertiser when users click on the ads. Often, advertising or search campaigns are set up with incredibly targeted audiences based on the preferred demographics of the advertiser. Ads are served to users based on their past Google searches or browsing history, their current data profile, and other algorithm-specific information. The value of a click is determined by how the ad itself is set up. Most commonly, PPC campaigns are run through platforms like Facebook Advertising or Google Ads.
Paid search, or PPC, is used by many digital advertisers because targeted ads have benefited optimization, and SEO, and even helps boost conversion rates.
Data Transparency: Data transparency refers to the use of personal data with integrity, honesty, and in a clear way. Individuals using specific platforms should understand what data is being collected, who has access to that user data and set parameters around the data collection process. Data transparency is related to data governance and security–and permits end-users rights that may not have existed in a gray area previously.
So, why are we seeing changes in data transparency?
First, let’s talk about why data transparency has become a hot topic in the tech world. It’s been mostly due to a loss of trust, app tracking transparency, recent privacy breaches, and big-name scandals that have caused users to be warier about what data they’re sharing.
Some notable tech scandals/privacy breaches have included:
● Yahoo (August 2013)–3 billion potential exposed customers with sensitive data breached from Yahoo accounts. The public was not informed until years later, it’s unclear how quickly users were informed of the breach.
● Facebook (April 2019)–It was reported that 530 million Facebook accounts’ data was exposed to the public internet.
● LinkedIn (June 2021)–Impact was around 700 million users, with users’ data posted on a dark web forum.
There’s no question that data volume has exploded, which has left users worried about how their privacy and security are being handled in the back end. However, many young people also prefer personalized interactions on social media, through PPC advertising, and on other digital platforms.
A study sponsored by Verizon showed that 45% of 18-24-year-old people would share their data in “exchange for a more intuitive and personalized user experience”. On the other hand, 69% would avoid a company that had suffered a data breach. Tech companies find themselves in a tricky balancing act between data transparency, data governance, and tailoring an experience to a user based on their data and usage information!
Not only that but intensified conversations around “bad actors” or intentional “misinformation” sharing from foreign sources on various marketing channels have been a hot topic around elections. It’s enough to make users think about the data that they’re sharing and how it’s being used. This (combined with other conversations around the safety of the tech space) are some of the main reasons for data transparency.
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Now, let’s talk about what has changed in data transparency recently…
One of the major changes in data transparency has been the conversation shifting into the political sphere. The talk about “data governance” and properly handling sensitive information is becoming more than just a quiet conversation in some tech companies.
Now, politicians are taking notice and starting to act through policy. Politically mandated laws acts, and legislation is forcing the hands of tech companies to be more airtight in terms of their handling of users’ sensitive and private data. It’s also changing the way that companies are thinking about their operations–including mechanisms like PPC advertising.
Google Ads’ SVP, Prabhakar Raghavan, said that privacy is becoming a bigger priority moving forward. The company is currently wrestling with the larger implications of big data. As a PPC ad giant, Google’s conscious focus on data transparency and information privacy will cause a ripple effect in the PPC advertising sphere.
Some recent policy changes around data transparency include:
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The CCPA (California Consumer Protection Act): The CCPA went into effect on January 1, 2020, and was set out mainly to legislate the fact that consumers have the right to know exactly how their data will be used and what information is gathered about them.
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Bill to Inform Consumers, Increase Online Transparency: Being introduced in 2022 in the United States, this bill could impact how terms-of-service agreements are written. The Bill has suggested that companies must include things like a graphic diagram of how consumer data is shared and have clear instructions on how a user can delete their information from the database entirely.
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Review of the Privacy Act in Canada: The Canadian Privacy Act is under consideration for updates as to how information is stored in the digital realm. Lawmakers would like to see the Privacy Act better address overall digital data governance, transparency, and security.
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General Data Protection Regulation (GDPR): The GDPR came into effect on May 25, 2018, and is the strictest privacy and security law in the world. The GDPR levies harsh fines against those who fail to uphold or violate its privacy and security standards. No more scandals that include a slap on the wrist–this policy means business for companies who are collecting any form of digital data!
Challenges vs. Advantages of Data Transparency with PPC
All in all, policy shifts and changes in data transparency laws are going to affect PPC advertising and ad performance in several ways. However, there’s a unique opportunity for marketers to balance people’s right to privacy regarding third-party data, and users’ preference for a personalized digital experience.
While it may be a challenge to target the ideal audience with PPC ads as less data is being aggregated—meeting users where they are most comfortable is a massive win for marketers and advertisers. Those who prioritize “white hat” advertising techniques will be much more favorable in the eyes of the consumer.
Google plans to satisfy its users’ demands with three core principles; transparency around why and how data is collected, choice over personalized online experience, and control over customizable options with how data is collected.
Key Takeaways as a Marketer or PPC Ad Expert
- Data transparency is becoming more than a hot topic in the tech industry. It’s now a politically debated topic with legislated standards being rolled out globally that companies will need to abide by (or face harsh restrictions).
- These data transparency laws and policies are going to affect how much data is collected and what can be used for PPC ads. Ultimately, it will affect an advertiser’s ability to reach its end-user and may cause some roadblocks in their ad campaigns.
- Creating PPC ads in compliance with data transparency laws is going to be a major hurdle for those who are using various ad platforms.
- Consideration of the platforms that you’re doing PPC business with will also need to be a factor throughout the ad targeting process. Those platforms that have faced breaches, scandals, or security issues may not be the best choice to advertise through.
- Currently, any major changes to Google bidding, ad formats, and audience data have yet to be seen. However, marketers would be wise to keep an eye moving forward knowing where the data transparency issue is moving.