The Australian advertising industry will face an inflection point this year as it faces a unique convergence. The updates to the Privacy Act scheduled for August coincide with the looming depreciation of cookies on Google Chrome.
Businesses will be tasked with navigating a shifting regulatory landscape whilst the currency that’s underpinned the industry for the last 20 years is finally deprecated. Each event would be enough to deal with on its own, but together, they carry profound implications for how businesses collect, manage, and utilise consumer data.
Let’s look at the inflection points hurtling towards our industry and what marketers can do to prepare.
Updating the Privacy Act
Towards the end of 2023, the Australian Attorney-General's Department responded to the recommendations laid out in the Privacy Act Review Report, acknowledging the concerns raised by Australia's digital economy regarding data breaches and privacy infringements. Among the proposed changes, the government's endorsement of enhanced consent requirements aligned with GDPR standards represents a significant step toward strengthening consumer privacy rights. These requirements mandate voluntary, informed, specific, and unambiguous consent, reflecting a growing global consensus on the importance of transparent and accountable data practices.
Additionally, proposed amendments to key definitions such as "personal information" and "de-identified" aim to broaden the scope of data covered under the Privacy Act, ensuring that individuals' privacy rights are protected across a wider range of contexts. The introduction of a "fair and reasonable" test further underscores the importance of accountability and transparency in data processing activities, requiring organisations to justify their data usage practices based on these principles.
While activities like data segmentation and analytics may pass this test, indiscriminate data sharing may face scrutiny, necessitating a reevaluation of current practices and making new technology, such as data clean rooms, more valuable and necessary in a market looking for new approaches to targeting advertising.
We will find out how far the changes go when the legislation is tabled in August, but recent comments by Federal Attorney General Mark Dreyfus at the Privacy by Design Awards in early May read as a precursor to significant change, as he notes:
“It is clear that personal information has immense value – not just to individuals, but to those engaged in marketing, research, product development and advertising.
But the Privacy Act framework dates back to the 1980s and is not fit for purpose for our modern economy.
It's past time we stopped treating the most personal and private information of Australians as an asset that entities hold”.
The timing of cookie deprecation
If that wasn’t enough, these changes aren’t happening in a vacuum. At the same time, Google plans to finally deprecate cookies globally on Chrome in early 2025, meaning Australian businesses must now prepare for a radically different way of working from a regulatory and technical perspective.
With third-party cookies set to disappear from the digital landscape, businesses must seek alternative methods for delivering personalised advertising experiences. While there are multiple cookieless solutions in the market, including targeting based on contextual, geographic, first-party data, or alternative IDs, they do not fully replicate the perceived precision and granularity afforded by third-party cookies, posing challenges for businesses accustomed to highly targeted advertising campaigns.
Navigating the changes
To navigate these fast approaching changes, businesses must adopt a proactive, privacy-by-design approach.
This means creating robust data governance frameworks that genuinely prioritise privacy and compliance, while also exploring alternative advertising technologies and methodologies that can deliver targeted advertising experiences without relying on third-party cookies.
Reconsidering Data management
A crucial area for businesses with a direct relationship with consumers is to reconsider their approach to data management and utilisation. Businesses should recognise the value of first-party data and invest in strategies to maximise its potential, building direct relationships with consumers and collecting first-party data through opt-in mechanisms to reduce their reliance on third-party cookies and gain greater control over their data assets.
Here, transparency will be key, to ensure consumers understand how their data is being used and providing them with meaningful choices and control over their personal information.
By adopting a customer-centric approach to data, businesses can prioritise a value exchange with the consumer, collect only the relevant and actionable data points they need, protect consumer privacy throughout their tech stack, and be able to deliver personalised and relevant experiences.
This may involve auditing the existing data collection processes, implementing customer data platforms, investing in a secure data clean room, and leveraging advanced analytics to derive insights from aggregated datasets.
Advertising and collaboration
With cookies on the way out, businesses must explore alternative targeting and measurement techniques to ensure the effectiveness of their campaigns.
A growing area of interest is first-party data collaboration, where two or more companies (often a brand and a media owner) connect their data to generate insights, define new target segments, improve audience expansion and suppression, and measure the results of campaigns without sharing their raw data. InfoSum’s clients have been doing just that for the past five years, seeing not only incredible results when comparing the performance of first-party strategies to cookie-based strategies but also improved efficiencies such as cost savings derived from working with partners to create higher-quality targeting profiles.
Holistic change is required
For the advertising industry, navigating the convergence of regulatory reforms and technological shifts requires a holistic do-over encompassing legal compliance, technological innovation, and customer-centricity.
There is no silver bullet that can solve all advertising challenges, and companies will need to re-evaluate their whole tech stack to ensure it can work as an integrated and well-oiled machine to meet the new standards and deliver business outcomes.
Nicola Newitt, Director of Legal at InfoSum