Legislation is the biggest threat to ad industry ‘signal loss’ 

The biggest immediate threat to the online advertising industry is inconsistent and poorly crafted state-level privacy regulation, not the loss of third-party cookies and identifiers, according to a new IAB report.

Context

The IAB’s State of Data 2022 report, based on in-depth interviews with 30 senior-level data decision-makers at brands, agencies, and publishers, estimates that the US ad industry has already lost “approximately 50% to 60% of the signal fidelity from third-party identifiers” due to Apple’s App Tracking Transparency framework and automatic tracking protection in Mozilla’s Firefox browser – even before Google's much-delayed deprecation of cookies has happened.

Why it matters

While the industry has understandably been focused on the impact of what the tech giants are doing, state legislation is potentially a much bigger problem.

What’s happening

• While many marketers regard themselves as prepared for the end of third-party cookies, they are not fully versed in many of the privacy-related laws that could contribute to signal loss. 
• Privacy legislation at state level means compliance is becoming more difficult. “The evolving laws and regulations are outpacing marketers’ ability to enact and adopt consistent measures and protocols, both internally and externally with third-party vendors,” the report says.
• The cost of tech solutions and associated personnel will disadvantage small to medium-sized players who will struggle to make the necessary investment.
• A focus on first-party data may be misplaced, the report suggests, given that publishers report only 20% of their audience, at most, logs in; contextual advertising may be a better bet.

Sourced from IAB