If The Banning Surveillance Advertising Act passed, what would it mean for small business advertising?
On January 18, 2022, a bill was introduced that could have a major impact on the way small businesses advertise. But how?
Let’s start by understanding a little bit about the 2 major restrictions proposed by the bill.
First, the bill would stop the sharing of contact lists, unique identifiers, or other personal information. That part is fairly straightforward and isn’t really anything new. We’ve known about these sorts of crackdowns for a while now.
Second, there are direct restrictions on contextual information being gathered and used by advertisers. And this is where it gets interesting.
A quick lesson on how this kind of advertising works. When you digest content online, companies like Facebook and Google are making associations between you and the content you’re interacting with. They store that information and use it to group you into different targeting buckets. Advertisers then use those buckets to build target audiences. This contextually-sourced data is kind of a grey zone territory when it comes to “personally identifiable” information - a zone that advertisers have been comfortably living in for a while. But now that may be changing.
This new bill states that collecting and using information from users based on the context of the content they're engaging with is not allowed. For example, if you were on a blog about craft beer then Google wouldn’t be allowed to use that context to identify you (or your device) as someone interested in craft beer. Advertisers then, would not be able to use that information to advertise to you in other places.
The bill does say that straight-up contextual ad placements are OK, it’s just not cool to collect data about users based on that context. To clarify, let’s go back to the craft beer blog example from before. It would be fine, according to this new law, that an advertiser run ads for a hop grower on that craft beer blog. It just wouldn’t be ok for the advertiser to mark you as a craft beer enthusiast in their server and run ads for the hop grower during your next Candy Crush session.
So then, for the sake of argument, let’s assume the bill passed. What kind of changes would actually take place with the way you run ads?
Interest and behavior targeting would get way worse or completely disappear
Right now, we can build target audiences based on a whole bunch of stuff. A lot of it is based on “affinity” categories like craft beer, dog lovers, and international travelers… just to name a few. There are hundreds of options within any given advertising platform and layering these options together in different ways offers a seemingly infinite number of audience variations. Without the data from contextual environments, these affinity audience categories are going to get wayyy less accurate. It’s already happening right now with the privacy restrictions that rolled out in 2020-2021, which has caused a lot of criticism of the effectiveness of platforms like Facebook Ads. If the data gets worse, then there isn’t really a point in using these affinity audiences at all.
Contextual placements will become the standard for digital advertising
If we dump affinity audiences in the trash, then the reasonable option for targeting based on any sort of interest or behavior will be contextual placements. That means that if we want to run ads to someone interested in brewing beer, for example, then we’d need to place an ad on a webpage or app whose content is about brewing beer (or having anything to do with beer, at the very least).
Would this make Facebook advertising pointless then? Perhaps, but perhaps not. If Facebook were able to find a way to serve ads based on the type of organic content you were viewing right this moment and nothing else then maybe they’d have something. What I am suggesting is something like this:
You’re scrolling through your feed and you watch a video from your favorite brewery. Then, immediately after watching that video, you are served an ad for a different brewery.
Could Facebook consider the organic brewery post as context enough for serving another brewery ad to you? I wouldn’t put it past them, that’s for sure.
Geographic targeting gets more broad
If you look at industries where there are already tighter restrictions on advertising, like Real Estate, then you’ll find that the ability to run ads in specific geographic zones is not possible. For example, if you are running Facebook ads in the real estate industry then the smallest geographic radius you can set is 15 miles. That is HUGE for more densely populated areas (e.g. Chicago).
With a continued emphasis on limiting advertisers from gathering personal information on individuals and groups, that means that geographic zones have to be limited. Consider how much you could infer about people living in a specific zip code or within 1 mile of each other.
Advertising costs will go up
Womp womp… Unfortunately, I don’t see any other circumstance more likely than the overall cost of digital advertising going up. This will happen for one of two reasons, or perhaps both.
Because targeting will be less accurate, ads will be served to a larger portion of people that just aren’t ideal for whatever the product or service is. There will essentially be more wasted impressions. More waste means that it will take more money to reach the same number of the right people as before.
There will be less variety in targeting options and more advertisers will be competing for the same space. Without the ability to target hyper-specific niche audiences, then brands that never really competed for ad space will start to bump into each other. Think about it… How many different companies want to run ads to 25-45-year-old men that live within a 10-mile radius of each other?
It’s not all doom and gloom
Even if the bill passes and all of these predictions come true, digital marketing is not going away. The internet is only growing in capability and reach (e.g. virtual reality, the metaverse).
These restrictions are most likely better for society. Advertisers should have less access to your information, and I’m an advertiser saying that!
It will be more challenging to run effective campaigns. sure. There will be a lot more emphasis on what your advertising message is for starters. We can’t just rely on the easy button anymore. Does that mean that the overall quality of advertising actually gets better? I certainly hope so!