What does CCPA mean for the martech ecosystem?

CCPA is just the beginning of data privacy and protection in the United States

Following in the footsteps of California, a growing number of states, including New Jersey, Massachusetts, and Illinois, are inquiring or already in the process of developing their own data privacy guidelines. With more than half of the United States in the midst of deploying their own data privacy policies, advertisers and publishers alike are left wondering how they will be able to remain compliant with the various regulations since a federal mandate may be years in the making.

The advent of consumer demand for data privacy has also provoked many of the key browser providers to begin placing restrictions on first-party and especially third-party cookies used for tracking consumer behavior, engagement, and purchases. In the past 3 years, Apple and Mozilla have announced they will be blocking third-party cookies from their browsers, Safari and Firefox respectively. More recently, Google declared they will be phasing out third-party cookies from Chrome by 2022. 

As a result, current marketing strategies will have to adjust in order to accommodate changes regarding how brands may collect, use, sell, and share their consumer data. We’ve pulled a few phenomenons that we anticipate becoming the norm in the next few months:

Programmatic advertising will change dramatically

One of the most simple ways to bypass the potential consequences and legal repercussions of collecting and misusing consumer data under CCPA is to enforce the “opt-out” option across all users. Also, let’s be honest, most consumers impacted by CCPA will likely not opt-in to having their data shared or sold. Though this may be the easiest way to accommodate for the regulations, it will likely result in a rapid decline in the effectiveness of targeted programmatic advertising. This is because CCPA does not clearly define what constitutes the “sale of data” and due to heavy reliance of audience data in programmatic advertising, it is likely this type of advertising will suffer greatly. Also, with the elimination of third-party cookies, programmatic advertising will become even more difficult.

First-party data will become your competitive advantage!

In order to combat losses associated with the potential decline of programmatic advertising and retargeting, it is especially important that brands place an emphasis on first-party consented data (email, phone number, etc.) that live in their CRM system and direct marketing programs. This type of data will be invaluable for audience planning, media activation, and measurement use cases moving forward, especially now that third-party data will very likely be out of the picture in the next few years. 

Embrace data clean rooms

Upgrading your analytics toolkit to include a data clean room will become necessary as the global attitude towards data collection becomes more and more conservative. A data clean room, such as Google’s Ads Data Hub, is a powerful tool that allows you to run queries on large sets of data to extract specific insights you might not be able to gather with the typical analytics user interface. By aggregating and anonymizing high volumes of data, Ads Data Hub allows you to manipulate and pull insights that, under these new regulations, you wouldn’t usually be allowed to see.

Though these impending changes to the current digital marketing landscape may seem overwhelming, there are simple ways you can prepare for CCPA’s official enforcement this summer.

Getting ready for the July 1st enforcement: try our decision tree!

The first step marketers should take is identify with their media agency or tech providers whether their vendors or tools in scope qualify as a service provider or not. Under CCPA, a service provider is defined as the following:

A for profit entity that receives and processes data on behalf of a business for business purposes exclusively. This entity must agree not to retain, disclose, and/or use any personal information received outside of its responsibility to it’s client. (Source)

This is important because there are certain exceptions under CCPA about the “sale” or “sharing” of data when service providers are involved. Once you’ve identified your service and non-service providers, you can make more informed decisions about how to move forward. If you’ve identified your service providers, no further action is required. However, for tools or vendors that may not qualify as service providers, it is important that you communicate with your key contact to see if: 

1. It may be possible to activate them as a service provider, if not 
2. Take the necessary steps in order to be compliant with CCPA. Take a look at the graphic below to see where you stand:

There is still plenty to be clarified about CCPA and a lot of opportunity for things to change. However, if one thing is certain, it’s that marketers will have to begin adapting to a more conservative data landscape in order to stay ahead of the curve. Although the impact of CCPA may seem daunting, it could also be viewed as an opportunity. This shift towards proprietary data will be incredibly influential in developing robust and personalized marketing strategies and experiences for your brand. With new and emerging technologies in leveraging first-party data and the onset of data clean rooms, marketers can position themselves to gain a strategic advantage if they take advantage of it before the competition.