The status quo in digital advertising is “unsustainable”, according to a new study by data rights agency AWO, conducted on behalf of the European Commission, suggesting a ban on Big Tech companies collecting personal data for advertising purposes.
The report, ‘Towards a more transparent, balanced and sustainable digital advertising ecosystem: Study on the impact of recent developments in digital advertising on privacy, publishers and advertisers’, lays out a case to reform the industry, citing issues for publishers, consumer privacy and the environment.
Received wisdom
Among its key findings is that beliefs about personal data increasing the value of digital advertising are largely unsubstantiated, due to an absence of testing around alternative models. “There is little independent evidence to support claims that the use of extensive tracking and profiling yields a significant advantage compared to digital advertising models which don’t do this,” argues the report.
These assumptions are shown to strengthen the position of the largest data controllers (Big Tech companies) at the expense of advertisers and publishers, and create an “accountability crisis”, where individuals are forced to contend with a “complex web of companies” if they want a say in how their data is used.
“Users have a limited ability to control or influence how their personal data is used in digital advertising,” tweeted the report’s co-author Nick Botton, . “Ad preferences tools such as Google and Facebook’s ad settings and Your Online Choices are difficult to access, hard to comprehend and difficult to use.”
AWO notes that while the largest European publishers’ revenues have stagnated over the past decade, Google and Meta’s have increased by more than 500 percent. “European publishers struggle to compete for digital advertising revenue because large platforms have more access to data than they do,” finds the report.
As a result of this imbalance, advertisers and publishers described a sense of “dependency” on Google and Meta, alongside terms like “abusive”, “aggressive” and “love/hate relationship (without the love).” Advertisers complained over Google’s lack of transparency in pricing and poor customer service, while publishers argued that this opacity “allows Google to retain hidden amounts” of ad spend.
Meanwhile consumers are very much in the dark when it comes to how their data is actually used. A 2019 report found that explaining to consumers how digital advertising works cuts their approval of it almost by half. “Even where consumers do suspect certain tracking methods are technically possible, such as third parties recording web browsing history, research has long indicated their expectations are often below real usage,” adds the report.
The industry’s role in spreading harmful content and amplifying discrimination also came in for scrutiny. A 2020 study surveyed 2,419 ads in the programmatic display ecosystem, and found 44.6 percent to be “problematic”, including 16.9 percent of Google-served ads.
The report additionally reveals the industry’s impact on the environment. Digital advertising is responsible for 8-15 percent of page loading on the top 350 news websites, according to the report. “A significant amount of this data processing is likely to be linked to fraudulent activity that doesn’t generate any value for advertisers.”
Furthermore, research indicates the heavy environmental costs of advertising on websites and content that have “no value to society”, with around 10 percent of programmatic ad spend wasted on “made for advertising” clickbait websites.
Proposed remedies
The report argues that where there is no direct relationship between a company and the individual, the latter is, in practice, unable to exercise their rights. “This appears to be the case with intermediaries in the digital advertising ecosystem,” argues AWO, proposing a ban on these companies being data controllers, limiting their role to that of data processors.
AWO also proposes that “gatekeepers” (such as Google and Meta) are banned from tracking users for digital advertising purposes, due to the imbalance between the company and the data subject. “This may be evidenced in take-it-or-leave-it data policies which are frequently changed by the gatekeeper,” notes the report. “It would therefore be helpful to consider whether it is ever appropriate for gatekeepers in the digital advertising ecosystem to use consent as a legal basis to collect and process personal data for advertising purposes.”
Finally the report recommends the EU promote a single interface where individuals can indicate their preferences for how their data is used across the entire ecosystem. “People could also use this interface to ‘switch off’ targeted ads altogether,” AWO suggests. “From such a perspective, targeting could
still be possible but based on trust and a less intrusive approach that minimises the processing of personal data.”
“Digital advertising that relies on the collection of personal data, tracking of individuals and massive-scale profiling can have enormous unintended consequences,” concludes the report. “It undermines European citizens’ data protection rights and can be linked to potential risks to security, democracy and
the environment.
“Moreover, there is little independent evidence to support claims that the use of extensive tracking and profiling yields a significant advantage compared to digital advertising models which don’t do this. There is, however, evidence to suggest that a proportion of advertising-related data collection and tracking could be unnecessary, fuelling ad fraud and ‘made for advertising’ websites that have limited value to society, as well as generating carbon emissions.”
