This is part of a series of articles highlighting some of the issues agencies and marketers will focus on during 2019.
As Europe settles into 2019, the challenges presented by 2018 are amplified on all fronts, as digital marketers face up to the consequences of political turmoil in the European Union and new legislation across the region.
The introduction of the General Data Protection Regulation (GDPR) in 2018 created a new era for data in Europe. Companies are now forced by law to respect citizens’ rights over their own data, or risk fines of up to €20 million ($23 million) or four percent of annual turnover.
GDPR has been described as a “loaded gun” aimed at the big tech companies, and campaign groups have already sprung up, eager to pull the trigger.
Dan Clays, CEO of OMD UK, said that some smaller ad tech companies – the kind that never had very high standards – are quietly disappearing, but in general, most businesses’ response is to play it very safe and take a conservative approach to data.
While marketing and media companies have so far kept out of trouble, Google was fined €50 million ($57 million) after complaints by two privacy rights groups in France argued that users are “not sufficiently informed” about how their data is collected to personalize advertising.
“This is a warning for all businesses to review their data strategy and ensure they address all potential gaps,” said Ian Woolley, chief revenue officer at security company Ensighten. “Brands can’t afford to risk reputational damage by cutting corners with data.”
Apocalypse No
“Our industry has not seen the dramatic headlines and massive fines that we feared, and Facebook’s Cambridge Analytica data breaches – which go way beyond GDPR – have taken the heat off,” Clays said. But he added: “GDPR has made a difference to the way we all operate. Tracking customers across devices is harder, and the scale of our data is reduced – although in 2019 we hope to be able to start scaling that back up.”
Leading up to GDPR’s introduction last May, there were a lot of end-of-days, Armageddon-style predictions about the impact of the new legislation. For a while, GDPR was a more popular search term than Beyoncé, and every inbox was flooded with emails from businesses begging people to opt in.
Once the 25th May deadline had passed, it seemed that the whole of Europe was holding its breath, waiting to see who would be hit with a huge fine first.
In the event, though, it’s been pretty quiet for marketing services. Some optimists have even said that GDPR has fostered a better relationship with customers and forced agencies to be more efficient.
David Fletcher, the chief data officer at Wavemaker UK, said: “GDPR means lower volumes, clearer permissions, and a new-found respect for engaging real people. It’s also encouraged agency teams to get together and join up their data instead of working in silos.”
As the exit of the U.K. from the European Union looms in 2019, one of the very few issues the U.K. government can agree on is that it will continue to comply with GDPR in order to maintain data flow across the continent.
Brexit Blues
Brexit is causing a massive wave of uncertainty for the whole of Europe, and the marketing and advertising industry is no exception. Member states look on as the U.K. implodes, unable to agree what kind of relationship it wants with the EU or whether it can meet the 29th March deadline for leaving.
Outside the U.K., Europe can only watch and wait, meaning Brexit’s affect on marketing services has been minimal so far. Within the U.K., the state of limbo is having a big impact on confidence, and therefore on growth.
“This first quarter is particularly difficult to predict. The uncertainty around Brexit has encouraged marketers to be very cautious and to put even more of an emphasis on ROI, but it’s also important to remain innovative and we must keep pushing creatively,” said OMD U.K.’s Clays.
While the country waits to find out what’s next, U.K. marketing budgets have stopped rising for the first time in six years, according to the Institute of Practitioners in Advertising’s latest report. Paul Bainsfair, the IPA’s director general, blames this squarely on Brexit, which “has dampened both business and consumer confidence, driving belt-tightening and restricting resources available to marketing executives,” he said
One-third of revenues at the top 20 U.K. agencies comes from overseas business, according to figures from The Advertising Association, a trade body that represents Britain’s marketing services industry. The AA has been fighting passionately to make sure Britain’s reputation as a global creative and technological hub is not ruined by Brexit. At the same time, it has a clear Brexit agenda that it puts to the U.K. government at every opportunity: continued cross-border data flows; plurality of broadcasting channels to carry cross-border advertising; and a flexible migration system that allows access to the best talent.
WPP is the only one of the world’s big four communications groups to be based in the U.K. Its response to Brexit has been to invest more in other European countries, expanding its power base and securing access to global talent who may not be willing – or able – to work in the U.K. in future.
Recent acquisitions such as German agency Thjnk, and an investment in French media group LNEI (which has a stake in Le Monde newspaper, the French Huffington Post and Vice France) demonstrate WPP’s commitment to boosting its European presence.
WPP’s chief client officer, Lindsay Pattison, told a recent investors’ meeting that the company has 16 percent growth in France and 49 percent in Italy
“There is no Brexit for WPP,” she said.
The EU “wants to kill our cuppa”
The same kinds of division seen between Brexit’s opposing camps are also being played out in other ways across the European continent, as political polarization and the rise of nativist governments takes its toll.
Whether it’s French President Emmanuel Macron versus the “yellow vests” in France, the conservative uprising in Spain (where the far right gained 10 percent of the vote in December), or Italy’s anti-EU alliance with Poland, the region is unsettled and acrimonious.
You might wonder what all this has got to do with digital marketing? One answer is that Steve Bannon, Donald Trump’s former chief strategist, has moved in on Europe with The Movement, a club he has set up with far-right Belgian lawyer Mischaël Modrikamen. The group is on a mission to support right-wing, anti-establishment groups across the continent at the Europe-wide elections being held in May 2019.
Bannon’s ties to the disgraced political consultants Cambridge Analytica raise ethical questions about the practice of online marketing and targeting. Like the 2016 U.S. presidential election, Brexit has also escalated public mistrust in digital marketing methods, with rumors of Russian interference in online campaigns. Many Brexit campaign ads included wild suggestions and fake news, such as the claim that Turkey’s entire population would move to Britain, and that the Great British cup of tea was under threat because “The European Union wants to kill our cuppa.”
The proliferation of fake news and suspect targeting is, by extension, putting digital marketing on trial. It can only win if it remains transparent, above board and squeaky clean at all times. Which is why GDPR should be an important move forward, and one that is respected by the industry across Europe.
Come back to Velocitize for more of the issues to watch in 2019, from marketing marijuana to the maturing social influencer.