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If Facebook were a Meme, it’d be the one saying “Hold my beer”

Online Revenues will Contract while Dollars Move to OOH

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Guest Writer,
Joshua Lawton-Belous
COO and Co-Founder
Abraxas Technology

 

 

If Facebook were a meme

If Facebook were a meme, it’d be the one saying “Hold my beer”.  For those privacy advocates and conscientious consumers who thought that Cambridge Analytica was the bottom of the ethical barrel, Facebook announced recently that they shared European and American user data with a Chinese corporation that US intelligence services allege is tied to the Chinese government[1]. While it is unknown to what extent Americans’ and Europeans’ personal data is now stored within the confines of the Chinese Communist Party’s servers, the revelation only spurs on additional efforts to add-on to the already hefty GDPR regulations to restrict unlimited data collection and sharing that has been the status quo of digital advertisers. From the recent passing of Vermont’s data broker law[2], to the upcoming referendum in California to pass the California Consumer Privacy Act[3] the trend of limiting access and the sharing of personal consumer data will continue unabated.

While the conversation has mostly centered around what was done or is presumed could be done with this data, a review of how these laws will affect the value of the data that digital marketers use has been rather mute. However, the impacts are going to be widespread and have a profound impact on digital marketing. But these impacts are not just going to be felt from a regulatory standpoint, tech companies like Apple are taking aim at adding significant privacy tools that will disrupt Facebook’s data collection capabilities[4]. Companies are also going to have to severely limit their ability to collect behavioral data, a mainstay dependency of marketers for over a decade[5]. Compounding this limitation is the illegality of using automated decision-making which will have a significant impact on the efficacy of driving inferences and targeting and re-targeting ads.

All of this means that rather than continuing on its astounding upward market value creation, the $59B online marketing industry revenue is going to contract and that money, searching for a place to find value, is going to go to the one market that does not rely on creating natural person profiles to validate ad spends: the Out of Home market. OOH market’s value is going to be lifted by innovation in physical data that will provide relevance to advertisers and media buyers and create increased ad spending by them combined with the depreciating value of the data that the digital market contains. This means that for billboard owners they will see increasing revenue due to the devaluation of the digital space.

online marketing revenue is going to contract and that money, is going to go to Out of Home

 

[1] https://www.theatlantic.com/technology/archive/2018/06/how-bad-is-facebooks-new-china-problem/562172/

[2] https://techcrunch.com/2018/05/27/vermont-passes-first-first-law-to-crack-down-on-data-brokers/

[3] https://www.caprivacy.org/

[4] https://www.marketingtechnews.net/news/2018/jun/05/apple-takes-aim-facebook-user-tracking-features/

[5] https://hbr.org/2018/05/how-gdpr-will-transform-digital-marketing

Joshua Lawton-Belous
COO and Co-Founder
Abraxas Technology
571.232.8300
www.abraxastechnology.com

 

 

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2 Comments
  1. Rob MacMillan says

    What is your source for the “Supply and Demand Forecast Effect on Market Value” chart?

  2. Joshua Lawton says

    Robert – The data that underpins the forecast came from multiple sources. The assumptions for the model were built out by me.