Enactment of data protection law will be a watershed moment for digital media, Anand Chakravarthy, MD, Essence India

India’s upcoming data protection law will completely alter the digital media marketing landscape in the country as both media agencies and brands will have to adopt new technology and tools in order to utilise consumer data, said Anand Chakravarthy, Managing Director, Essence India.

Part of GroupM, Essence is a global data and measurement-driven media agency.

“A key watershed moment in digital marketing will be the enactment of data privacy laws in India. We are seeing this happen across the world and India will not be far behind,” Chakravarthy told BestMediaInfo.com.

“The industry will need to move to more aggregate data for analysis and respect the privacy of individuals. In fact, we are already seeing early signs of this happening on key platforms,” he added. 

The Union Cabinet has already approved the Personal Data Protection Bill and it will be introduced in the ongoing session of Parliament for the final approval.

According to an analysis by Edelman India, the bill is likely to have a wide ranging impact on social media and technology firms and all industries that store user data.

Talking about the impact of the proposed law on India’s digital media industry, Chakravarthy said the industry will have to adopt new technology and tools to be able to continue to effectively measure, analyse and take appropriate action, during and following the campaign.

According to the new bill, data has been divided into three; critical, sensitive and non-critical/non-sensitive. Companies will have to localise the critical and sensitive data, whereas, only non-critical/non-sensitive data can be stored anywhere. For sensitive data processing, every time it is sent out of India, user permission would be required.

The proposed regulations will limit the capabilities of media marketing and measurement agency to access and process the user data, which may lead to higher costs and compliance for companies. 

On brands leveraging first-party data, he highlighted that the ability to use first-party data at scale also comes with its own investment needs. “Brands will have to invest in the right technology to be able to securely store and meaningfully analyse this data, as well as take actionable steps in media accordingly.”

Chakravarthy said not all brands will be able to make this kind of an investment. He said the size and nature of the business, the dependence on or share of revenue from digital channels, and the amount of investment in technology, would all have a bearing on a business’ ability to leverage first-party data at scale. Brands which have first-party data at their core will certainly invest and scale usage.

He added that having in-housing capabilities to leverage first-party data in media is not as easy as it sounds. Brands may in-house first-party data management, analytics and audience segmentation, but deployment in media will largely continue to go through agency partners. Agencies offer diverse talent, bring best-in-class learnings and solutions to clients, and are able to retain the right talent, as well as offer an unbiased perspective on tools and technology investments. Hence, agencies will continue to be core partners to brands despite the growing use of first-party data.

Essence India will continue to be on high growth trajectory in 2020.

For Essence, 2019 has been an important year of growth, after its initial expansion in 2018.

“2018 was a year of consolidation, while 2019 has been a year of growth. We are optimistic about our growth in 2020. While we are seeing a slowdown towards the end of 2019, we aim to continue to drive healthy growth in profit and net sales,” Chakravarthy added.

In 2019, the agency continued to build on its portfolio with the addition of multiple clients, including Airtel, UpGrad, Vedantu, Wakefit and Zee5.

Essence won several awards at Goafest Media Abby Awards, Kyoorius Creative Awards, Emvies Awards and MMA Smarties Awards this year for innovative work it has done for its clients such as Google, Airtel, Britannia and Flipkart. 

“For us, our clients’ business growth is the best yardstick of what we are able to achieve as a team,” Chakravarthy points out.

Speaking on the need to have unified data measurement metrics at the industry level, Chakravarthy said, “Uniform data measurement metrics from a single source for all digital platforms is the holy grail. We are seeing the growth of more walled gardens, be it ecommerce platforms, telecommunications companies, digital payment platforms or over-the-top platforms. Data is effectively at the core of these businesses, each of which would now have millions of consumer data points in their own protected environments. Building a uniform data measurement metric system would require all parties in the industry to work together, beyond individual ecosystems.”

Info@BestMediaInfo.com