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Upcoming data protection law may completely alter digital marketing landscape

The fintech and e-commerce sector relies heavily on data processing and analytics. The data protection bill may reduce the easy and uncontrolled availability of user data, which would substantially affect targeted advertising by brands

India may soon see the enforcement of a new set of regulations that could change the face of digital marketing.

The draft personal data protection bill, which aims at protecting consumers’ privacy and give them greater control over how the data is collected and used, will require marketers to secure permission for data use activities.

It will put substantial constraints on what till now has been an unregulated data collection practice.

Marketers will have to find other ways to target digital ads since they won't be able to collect and share behavioural data of users, without their consent, once the law is implemented.

Currently, digital marketing in the country mostly depends on targeting of consumers by using their data available.

It may also impact the revenues of social media platforms such as Google and Facebook, which make substantial money by running ads of brands whose display is based on behavioural data of users.

"It will impact the targeted marketing, the banner ads along with contextual ads. The law will force marketers to reduce their dependence on behavioural data collection. Hence, impacting digital ad targeting," said a lawyer dealing in cyber issues.

The General Data Protection Regulation of the EU, which was implemented recently, has had similar impact.

Anupriya Acharya

"It will make life difficult for the platforms in India. The whole digital ecosystem of e-commerce, OTT companies and even the big giants like Google and Facebook are dependent on data processing," said Anupriya Acharya, CEO, Publicis Media.

"The data analytics and the big data may not remain as impactful since consumers may not be willing to allow companies to use their information. Instead of email campaigns, digital marketers will have to rely on social channels, that too even when the customer gives his consent," said a leading digital marketer. 

Several businesses, including fintech and e-commerce, use consumer data for analysis of sales patterns and behaviour or creating a profile to ensure higher effectiveness of targeted marketing campaigns.

Ashish Bhasin

Ashish Bhasin, Chairman and CEO, South Asia, Dentsu Aegis network said that anyone dealing in data will have to be much more cautious. "Data security is a very big issue. If I have collected data of consumer in legitimate manner, I must be equally careful in protecting this data from theft and hence misuse," he said.

Experts say that the data protection bill, if passed by Parliament in the same form as the draft is, could adversely impact the measurement of digital content as well.

Partho Dasgupta

Partho Dasgupta, CEO, BARC India, said "Its implementation will impact digital content measurement and we will know the exact implications once we study the bill in detail." BARC is soon going to implement EKAM, the third party digital viewership/readership measurement system.

Shashi Sinha

Shashi Sinha, CEO, IPG Mediabrands, said that the data protection law, if and when implemented, would be a short-term pain and the industry will be able to realign itself soon.

"It is going to be a short-term pain but it will help us because it will separate the men from the boys. It will separate the serious matured players from the young ones who are not cautious and cut corners. For large players like us which have global operations, we are already compliant with most of these rules. Big companies are often made to sign code of conduct on data protection. As per the current GDPR directive, any single mistake can lead to a huge fine of 4% of the annual global turnover. There is so much to lose," Sinha said.

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