On Wednesday, EU Regulators hit Facebook’s parent company Meta with almost 400 million euros in fines. Why? Privacy violations that conflict with the much-discussed GDPR (General Data Protection Regulation). The European privacy laws are amongst the world’s strictest in their type. Before, Meta captured user consent to process their personal data by merely informing them that their personal data would be processed. This data would, in turn, serve the user with personal, or behavioral ads which are based on what users search for online, the websites they visit, and the content they click on.
The EU (represented by the Irish data protection commission) allowed Meta to process data as described above but was forced to change direction by a board of EU data protection regulators. The final decision describes that Meta “is not entitled to rely on the contract legal basis”.
For US marketing teams active in Europe, it is a very common topic that we discuss with our customers.
So what does this mean for the European Consumer?
Because of the change in direction, users now need to be asked if they want their data to be used for ads or not. Additionally, users can change their minds at any time. “It is the beginning of the end of the data free-for-all,” says Johnny Ryan, a privacy activist and senior fellow at the Irish Council for Civil Liberties.
And what does this mean for Meta revenue?
Well, it will be profound. When Apple changed its privacy regulations back in 2021 (link) it impacted Meta sales by a whopping $10 billion. If Meta will have to move to an opt-in situation, it will impact one of its main revenue streams.
The final destination is still unclear
The EU has not formally dictated what changes Meta should make, but all signs indicate that an opt-in situation will be the way moving forward. In a statement released on January 4th 2023 (link), the company “reassures’ users and companies that they can continue to benefit from personalized advertising across the EU.” This seems to be a gift-wrapped message, because who would want to break the news to shareholders that the core business model is gone?
There are other future scenarios possible as well. A landscape with tracker-free contextual advertising would tailor ads dependent on the context. This means that a blog about various types of sunscreen might include an ad for a beach holiday in Spain.
The ad industry has been hooked on personalization for a decade and these developments affect the entire paid media industry.
What we have been saying all along; organic is the way
The basis for the most successful European digital strategies is organic relevance. Companies need to put themselves in the shoes of their customer (B2B or B2C) and show relevance based on the needs of those they are selling to, as opposed to hunting someone down cross-platform because they accidentally clicked a cute dog ad.
At EuroDev digital, we love nailing down the multilingual long-tail keywords that generate high-quality traffic that flies in the door with specific search intent. When you do this well, you will find yourself in a less competitive environment engaging with potential new customers that are further along in the buying process and are more likely to be ready to make a purchase.
Ready to start your digital journey in Europe? Connect with us.
EuroDev, established in 1996 with offices in The Netherlands and France, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. Since our founding, we have created a proven, successful business development model and partnered with over 300 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing, and Digital Marketing.