Meta's Advertising Landscape Changes Amidst GDPR Tensions

9 Nov
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Written by Pascal Blank

Meta's Advertising Landscape Changes Amidst GDPR Tensions

Recent weeks have ushered in transformative changes to Meta's advertising paradigm, driven by legal mandates and strategic shifts.

  1. A New Age of Consent: Meta Restricts Ad Targeting for Minors

As of November 6, 2023, Meta has aligned with EU regulations to disallow the targeting of users under 18 across its platforms. This immediate policy change applies throughout the EU, EEA, and Switzerland.

Current ads targeting the under-18 demographic will either shift to an 18+ audience or be suspended until the targeting criteria are updated. Although many advertisers may not feel the impact—given pre-existing constraints on minor-targeted advertising—those catering to younger niches may face significant challenges. The future of such targeted advertising remains uncertain as the ban stands indefinite.

  1. Europe's Stance on Privacy: Meta Faces Staggering Fines

A pivotal verdict from Norway in August left Meta with daily fines, accumulating until November 3, for collecting personal data without explicit user consent. This infringement of privacy led the European Data Protection Board (EDPB) to broaden the prohibition of personalized data use for advertising across the European Economic Area by October 27. With Switzerland’s market intertwined with the EU, it's likely to experience similar repercussions.

This decision will impact roughly 250 million of Meta’s users in Europe.

This is a hard blow for the company, who now sees itself confronted with an even bigger fine, should they not comply. Ignoring this regulation would be in direct violation of GDPR, putting the fine at roughly 4% of Meta’s yearly turnover, which would come to a staggering $5B based on Meta’s recent report of $126B in revenue for September 2023.

In response, Meta is exploring a subscription model to satisfy regulatory demands, although the full scope of the banned data points and their influence on advertising outcomes are yet to be determined.

  1. Meta's Paid Subscription Experiment: Navigating Regulatory Waters

To address European regulations, Meta is rolling out subscription plans: a monthly fee of €9.99/€12.99 (web/mobile) for an ad-free experience, or continued access with personalized ads. Initially, one subscription covers all user accounts, but as of March 2024, each additional user incurs extra charges.

Public opinion seems skeptical about paying for Meta's services, with polls indicating a preference for the status quo. This reluctance could enhance data collection, simplifying advertiser strategies.

The implications of these shifts for the holiday season and beyond in European advertising are unclear. Users may balk at the subscription model, even with a free tier resembling their current experience, possibly triggering a user exodus.

The Conclusion: A Seismic Shift in European Advertising

The GDPR has irrevocably disrupted the European advertising market, signalling a new era for American businesses operating within the EU. The question remains whether this will prompt an evolution towards greater data autonomy or restrict certain platforms from gaining a foothold in Europe—much like Threads, which has yet to debut officially.

As advertisers, we await the unfolding impact of these changes with anticipation, hoping that a balance between privacy and advertising efficacy heralds a brighter future. Despite potential initial obstacles, the journey towards this equilibrium promises to reshape our industry for the better.

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