Digital Service Act | What are the impacts for online advertising ?
The European Parliament recently voted for the DSA.
The Digital Service act represents a new set of laws to create a safer digital space in which the fundamental rights of all users of digital services are protected. All over the press, people are talking about a historic agreement. New standards. And it will apply from 01/01/2024 or even sooner for Very Big Online Platforms (VLOP). Ok, but what does this mean for online advertising and advertisers? Is it excellent news or new constraints? That’s what we’ll see in this article.
What does the Digital Service Act require of online advertising?
Dark patterns banning, more transparency & more control over targeting criteria
Manipulating users’ choices through ‘dark patterns’ will be prohibited
More transparency on advertising for online platforms for Internet users
Targeted advertising will be banned when it comes to sensitive data
Manipulating users’ choices through ‘dark patterns’ will be prohibited
Without doubt the rule that will have the greatest consequences for advertisers and platforms
In the Digital Service act, this is probably the rule representing the greatest constraint for advertisers and platforms. Online platforms and marketplaces should not nudge people into using their services by giving prominence to a particular choice or urging the recipient to change their choice via interfering pop-ups. Moreover, canceling a subscription to a service should become as easy as subscribing to it; (Amazon is not going to like it 🙂 )
These famous dubious practices that are the “dark patterns” allow today to influence the behavior of users skillfully. Or to prevent some of their actions. To get a good idea, I invite you to try to delete a subscription on Amazon Prime to understand this pain. The DSA is the end of the road for them, and it may significantly impact some companies. Some consent collection banners might also be affected, like the cookie wall.
More transparency on advertising for online platforms for Internet users
More constraints for Very Large Online Platform (VLOP) but nearly transparent for advertisers
Online platforms displaying advertisements online will have to provide detailed information on the sources of the ads and why the user has been targeted. The ads should be easily distinguishable from the rest of the content. Platforms will have to display all those information in real-time for each ad.
This point is more of a constraint for platforms than for advertisers in the Digital Service Act. Indeed, it forces platforms to reveal the targeting criteria used to users. Moreover, they will have to be careful to make the ads visually distinct from the rest of the content. This will put an end to dubious practices applied sometimes with “native” advertising formats on display. So you can expect some CTR (Click Through Rate) decreases among those formats.
Targeted advertising is banned when it comes to sensitive data (e.g. based on sexual orientation, religion, ethnicity);
A logical evolution of the regulations on shocking practices
Honestly, it seems shocking that this request should be stipulated in the Digital Service Act, as it seems logical. However, for platforms and some advertisers, it will represent a loss of relevance for some of their advertising campaigns and, therefore, revenue—an evil for good. Regarding VLOP, I know none of them which is still using those types of criteria, however.
It remains to be seen how local control bodies (ex: CNIL in France) will be able to control that these “sensitive” data are not used for advertising targeting. Indeed when using algorithms to build “cohorts” for ad targeting, it is sometimes impossible to accurately identify the data used.
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