Companies look at contextual advertising to prepare for privacy regulations in India

Digital marketing firms in India are moving away from targeted advertisements by tracking user activity through third party cookies, and looking at alternate data collection methods in preparation of tighter privacy regulations in the near future. In the course of such preparations, strategies such as contextual advertising are being chosen by companies in order to maintain efficiency of advertising, according to a new report on the Indian mobile advertising industry by Indian ad-tech company InMobi, in partnership with market research firm, Forrester Research.

According to the report, digital marketing firms in India are still largely at an understanding and planning stage in order to prepare for the phasing out of cookie tracking – something that had become the mainstay of targeted advertising. Titled ‘Future of Mobile Advertising in Tackling Data and Identity Deprecation’, the report said that 61% of all Indian brands and ad publishers in the digital space are still at a planning and understanding stage of what this overhaul of technology could mean for them – and how they can evaluate these changes.

Third party cookie tracking refers to the use of code snippets that are embedded into a user’s device. These snippets then track a user’s web browsing interests and patterns, and in many cases also fuses this data with geolocation services to create a digital information map of a person – including where they live, events around them, their preferences, shopping and eating preferences, and so on. Such information is known as digital footprints, and have been used by companies around the world – most notably Facebook – to serve targeted advertisements to users.

Targeted advertisements, which is a branch of digital marketing and advertising where companies acquire a user’s digital footprint, and use this to serve advertisements, have been deployed in order to maximise the returns from investments made in creating and serving the ad.

Narayan Devanathan, chief client officer at Dentsu, told TechCircle that the present situation can lead to a return to old times for advertisers and marketers. “The cookieless future is, in my opinion, a back to the future ride to a time when we didn’t exactly know—and didn’t pretend to know—who all would be seeing our ads and how they would be reacting to them. And so we worked harder, smarter and more creatively to create persuasive ideas that had a greater chance of sticking, rather than throwing a gazillion darts into the ether and then painting target circles around some of them,” he said.

Such technologies have faced significant controversies in terms of their impact on user privacy, leading to numerous lawsuits and government hearings offered by Big Tech executives in USA. As things stand, third party cookie tracking is now scheduled to become obsolete by the end of 2023, which is when Google has vouched to end the practice in favour of other strategies.

In India, the upcoming Data Protection Bill is slated to bring to the country’s law a framework in favour of personal data protection for the very first time. The framework would require those accessing, acquiring and processing user data to de-identify it, apply encryption and protect the integrity of collected user data at all times – in order to prevent misuse. Such regulation would require digital marketers to look at alternate strategies, since accessing the digital footprints of individuals may not be viable under law.

Now, the InMobi-Forrester report has detailed that the key concerns that Indian brands and marketers have over the end of cookie tracking include the availability and quality of data in the digital advertising space going forward, as well as the effectiveness of a digital ad campaign reaching the right pair of eyeballs – in absence of such data.

To circumvent this, the report said that eight out of every 10 companies experimenting with alternate strategies are today looking at context-based advertising models as an alternate avenue. The latter uses the context of the contents of a webpage in order to gauge user interest, and serve ads accordingly.

Dentsu’s Devanathan added that the upcoming changes may not necessarily lead to massive losses – but could create a short term correction in terms of revenues earned through digital marketing. “It doesn’t spell doomsday but what it does is prevent the bubble from getting so big and illusionary that its burst is all but inevitable. Rather than trying to circumvent it, digital marketers would do well to remind themselves of the first principles of direct marketing,” he said.