Online advertising regulation: What is and isn’t working for marketers

The online advertising industry faces an uncertain road ahead, both in terms of legislation and technology.

The ecosystem is still adjusting to Google’s plan to scrap third-party cookies next year. There are also questions over how the greater use of artificial intelligence might affect the industry.

In terms of regulation, the UK’s GDPR replacement bill has now been re-introduced to parliament. Post-Brexit, marketers are keeping a close eye on Europe, while hoping new legislation will simplify their data and privacy concerns.

All these issues and more were brought to the fore during an online forum held today (21 March) by Westminster eForum, which focused on the future of online advertising regulation.

Here are three key takeaways from the sessions for marketers:

1. Strengthening the self-regulation system

The self-regulation system in place across much of the UK advertising system “doesn’t get the recognition it deserves,” claimed IAB UK chief executive Jon Mew.

Self-regulation works partially because of “corporate self-interest”, he said. He cited the IAB Gold Standard, which is aimed at tackling issues such as brand safety, ad fraud and intrusive advertising. Over 100 buyers and sellers of digital advertising are signed up to the initiative, he said.

While it requires “time and ongoing commitment” to adhere to the Gold Standard’s principles, companies are willing to do so.

“It makes business sense to respect the consumer and ensure they’re not being bombarded with intrusive online ads- the same goes for ad fraud and brand safety,” Mew said.

While he was adamant “self-regulation is working”, the IAB CEO acknowledged there are areas where it is not adequate. He called for “targeted and proportionate” intervention from policymakers in areas like fraud.

The government is currently reviewing the self-regulatory framework for the industry through the Online Advertising Programme. This is looking at how the current framework is working and seeking to identify areas where it can be strengthened or gaps filled.

A consultation on this closed in June 2022, with the government currently reviewing responses.

We’re really keen to ensure a joint up regulatory approach to the safety and privacy concerns around online advertising.

Stephen Almond, ICO

The Department for Culture, Media and Sport is one of the government departments heading up the process. DCMS head of advertising policy Ruth Wye told the forum the goal of the process was to increase trust in the ecosystem.

“One thing that remains strikingly clear is that realising the growth potential of the online advertising sector relies heavily on trust,” Wye said. She added the department is “keen to preserve the current system where it is working”.

Earlier in the day, Mew had warned “ineffectual or unnecessary regulation” would risk harming businesses, particularly small businesses which rely on digital channels.

2. A ‘coherent’ approach to regulation

A cabinet reshuffle earlier this year saw the government department formerly known as Digital, Culture, Media and Sport split up, with it losing responsibility for digital.

The digital portfolio has now been moved to the newly created Department for Science, Innovation and Technology (DSIT).

The DCMS’s Wye re-asserted the claim previously made by the government that the changes amount to a “refocused” department.

“We’re still working really closely with our ex-DCMS colleagues in DSIT to align on wider digital regulation policies, recognising that advertising in particular is a policy area where there is a great deal of overlap,” she said.

Marketing bodies call for ‘swift clarity’ over government’s decision to split DCMS

She also added the reforms the department may make through the Online Advertising Programme will look to complement other ongoing digital regulation changes, including the Online Safety Bill, to create a “coherent and comprehensive” system.

The ICO’s director of technology and innovation Stephen Almond concurred with this. The ICO is an independent body set up to uphold information rights, which reports directly to parliament.

“We’re really keen to ensure a joint up regulatory approach to the safety and privacy concerns around online advertising, providing clarity to industry about our joint expectations and stopping people from being pushed from pillar to post by different regulators in this space,” he said.

3. Moving away from cookie pop-ups

The current pop-up cookie system “isn’t working” for either internet users or website owners, claimed the ICO’s Almond, citing “frustrations” over the repetitive nature of the system.

In 2021, the ICO called for a move towards a browser-based system where users could make lasting preferences around their privacy, “rather than having to scrutinise and be on guard” every time they go to another website.

Almond acknowledged this would require shifts in both technology and legislation. He welcomed the re-introduction of the Data Protection and Digital Information Bill by the government earlier this month, which would lay the way for these shifts to take place.

This bill is the government’s replacement for GDPR and was broadly welcomed by marketing bodies when it was introduced last month.

Almond said the ICO acknowledges the “important role that advertising plays in funding many of the services that we enjoy online”, but said there were harms going unaddressed.

These issues will not be solved “website by website, cookie by cookie”, he said, and will instead take a whole eco-system approach to amend.