Why EU Digital Markets Act is not all doom and gloom

Thorne-SimonThe Digital Markets Act (DMA) represents the European Union’s response to the dominance of big tech companies such as Google, Microsoft, Amazon, Meta and Apple. Designed primarily to foster a more competitive ecosystem, while promoting greater innovation and transparency, the potential impact of the DMA has certainly been causing headaches for brand advertisers who rely on digital channels for their marketing efforts.

As with any legislation, there’s often a disparity between intention and outcome, especially when considering the complexity of regulation in the tech industry. With previous interventions missing the mark somewhat, like the EU’s ePrivacy Directive which presented users with never-ending cookie warnings, it’s no wonder that there are concerns with the DMA’s real-world impact.

A new rulebook for gatekeepers
Under the DMA, the major platforms, who are defined as gatekeepers, have been prohibited from restricting consumer choice and must show greater transparency across their algorithms, fees, ranking criteria and terms of service. In practice, these measures could have a significant impact on consumer experiences, especially with speculation suggesting Google and Apple could be obligated to open their mobile operating systems to third party app stores, and users may be able to separate their presences on Meta’s Facebook and Instagram to enhance control over their data sharing preferences.

This is the central directive of the DMA. Data sharing once acted as the enabler for many brands’ advertising strategies, with campaigns reaching extensive audiences, and marketers gaining a comprehensive understanding of the users engaging with their platforms. However, with the new regulations, the transfer of data from platform to platform, (e.g. between Google Search and YouTube), as well as between these platforms and websites, will be restricted.

Uncharted territory for marketers
For our gatekeepers then, the DMA presents challenges in two key areas: audiences and analytics.

With curbs on data sharing, and more awareness from consumers that their data is being shared, advertisers face shrinking networks and audiences. In fact, a recent survey indicated that 70% of people block cookies online, pointing to a growing lack of trust. Additionally, platforms are now required to obtain consent for each individual service they provide, meaning Google cannot automatically form unified audiences across Search, Gmail, and YouTube, further lowering audience reach.

Additionally, stricter data consent regulations may impact the precision of analytics and tracking, as although impressions and click data can still be collected if a user ‘opts out’, marketers will lose the ability to set cookies and record subsequent conversions. This will ultimately impact performance on gatekeepers’ core platforms such as Google’s DV360, which will lose conversions to optimise bidding. Less detailed tracking also undermines reach and frequency figures, a fundamental KPI for the entire industry.

These issues should incentivise platforms to bring alternative technologies to the table, such as privacy-first ad targeting systems. Naturally, marketers seeking comprehensive control across all media channels will seek advertising technology that offers interoperability throughout the entire advertising process.

The need for agility
At its core, the DMA intends to create more a more competitive digital advertising landscape. In real terms, total audiences and their browsing habits will be unaffected by the regulation, however marketers will have to find novel means for reaching them.

With this in mind, advertisers must now focus on becoming more agile, by leveraging independent ad tech platforms which connect them to their entire audience, as those that can activate, measure and optimise creative delivery across all walled gardens and open web publishers will be able to reach wider audiences and better measure campaign performance across all media and creative.

While gatekeepers will remain a key part of most marketing plans, the DMA should open the door for brand advertisers to leverage best-in-class independent tools. If approached correctly, this will help them gain full control of their campaigns across all media, elevating brand strategy and driving growth for their businesses.

Simon Thorne is managing director EMEA at Flashtalking by Mediaocean

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