81% of advertisers concerned about privacy compliance, as Apple tightens data rules

Apr 23, 2021 | Online advertising, Regulation

81% of advertisers concerned about privacy compliance, as Apple tightens data rules
Advertisers are feeling pressured to increase privacy compliance as consumer interest in data privacy and Apple’s IDFA decision increases, according to the findings of a new white paper.

The study, from AppsFlyer and IDC offers guidance for advertisers as they navigate the post-cookie, post-IDFA world.

According to the white paper, advertisers are feeling pressured to increase privacy compliance as consumer interest in data privacy and Apple’s IDFA decision increases. The white paper finds that although the majority of advertisers (79%) are confident that vendors will keep attribution effective after the implementation of Apple’s ATT framework, just under half (49%) are less confident that this will be the case for future privacy measures.

The findings follow AppsFlyer’s recent MMA Marketer Report 2021, which revealed that half of US marketers (52%) were unfamiliar with the upcoming ATT changes and the impact they will have on the advertising industry.

Key takeaways from AppsFlyer’s IDC white paper:

  • Privacy and compliance are major challenges, with 73% of advertisers in the US and the UK concerned. Advertisers have a right to be concerned, as there is a one-in-three chance of being investigated for privacy violations.
  • Respondents say the most important measurement features are effectiveness and accuracy (79%), fraud detection (75%), and quality of customer support (75%). 
  • Over half (55%) of advertisers expect return on advertising spend will worsen with new measures in place.
  • The industry is still optimistic about the future, however, with nearly 80% confident there will be new solutions to keep measurement at the current level of efficacy.

Based on a survey of senior advertising decision makers in large companies in the US, the UK and Germany, the white paper details the current state of advertiser satisfaction with measurement solutions and reveals that while digital measurement is now the minimum requirement for increasing return on advertising spend (ROAS) and competitiveness, advertisers feel they must increase their ability to comply with privacy protection laws and regulations and ensure physical and environmental data security.

“This IDC White Paper demonstrates that for measurement technology to ensure an increased return on advertising spend and support overall competitiveness, it must enable advertisers to comply with evolving privacy regulations around the world so they avoid fines for non-compliance,” said Brian Quinn, President and General Manager, AppsFlyer. “This is about far more than one vendor’s feature set. It’s about our industry understanding the challenges our customers will face long before they do – and future-proofing our solutions to minimize disruption as the regulatory environment evolves over the coming years.”

Key Findings

  • Measurement as table stakes: Digital measurement has become required for running mobile marketing campaigns because measurement has proven to significantly increase ROAS and support advertiser competitiveness.
  • Feature satisfaction but concerns about privacy compliance: While generally satisfied with their measurement solution features, advertisers are concerned about the impact of non-compliance with privacy laws and regulations on their reputations. In both the U.S. and the UK, almost three quarters of respondents (73% in both countries) were “concerned,” “more concerned,” or “very concerned.” In Germany, more than half (53%) of advertisers surveyed were “concerned,” “more concerned,” or “very concerned.”
  • Top privacy compliance concerns: Across the three countries, the top concerns were:
  • Privacy protection and compliance (81%)
  • Physical and environmental data security (80%)
  • Compliance with privacy protection laws and regulations (79%)
  • Risks of non-compliance: Privacy law enforcement actions are not rare. Companies face a 1 in 3 chance of an investigation, and most investigations find non-compliance, leading to a fine that averages 2.9% of annual revenue or about $40 million – with significantly higher fines in the U.S.
  • The future: Nearly 80% of respondents are confident that industry players and organizations will find new solutions that will keep measurement at the current level of efficacy.

“Advertisers have been navigating an evolving privacy landscape in Europe since the enforcement of GDPR, so it’s not surprising to see that on the one hand, compliance is top-of-mind, but on the other, there’s confidence that measurement solutions can adapt to any changes,” said Gal Ekstein, General Manager, EMEA and LATAM, AppsFlyer. “As an industry, we have a responsibility to ensure that measurement and compliance go hand-in-hand, so that advertisers can continue reaping the benefits, both now and in the future.”

“For advertisers that run mobile campaigns, using digital measurement is not optional and having the right measurement partner in place is critical to protect advertisers from being fined for non-compliance with privacy rules,” said Karsten Weide, Vice President, Media and Entertainment, IDC. “We also found that being investigated for non-compliance is not a rare occurrence. There is a one-in-three chance for this to happen, and when it happens, one is likely to be found non-compliant, and be slapped with a penalty. And fines are quite stiff: Almost 3% of annual revenue or $40 million on average – with penalties being even more severe in the US.”

Methodology

The survey, conducted in December 2020, included more than 350 respondents who were predominantly advertising decision makers (94%), with more than two-thirds at the Vice President or executive level (CEO, CXO, CIO). Almost three-quarters of respondents worked for large companies (1,000 or more employees). The top industries represented included professional services, financial services, computing, retail and telecom. Average annual revenue of respondent companies was $1.4 billion.

The IDC white paper, commissioned by AppsFlyer, The State of Measurement, Privacy and Compliance – Top List of Advertiser Priorities, is available at: https://www.appsflyer.com/idc-attribution-compliance-privacy-report/.

AppsFlyer will host a discussion around the research findings with IDC’s Karsten Weide as a guest speaker on Wednesday, 12th May at 19:00 BST. Please register at: http://bit.ly/appsflyer-webinar-register.

www.appsflyer.com.

Share This