How The GDPR Will Impact Advertisers In The Asia Pacific

In this guest post, Rakuten Marketing’s JJ Eastwood (pictured below) explains why advertisers in the Asia-Pacific region need to be prepared for when the GDPR hits the industry later this month.

JJ Eastwood

The European General Data Protection Regulation (GDPR) is the legal framework coming into effect on May 25th and will serve as a means of governing the use of personal data across all EU markets, setting a strict, new standard for consumer privacy and data security. Once the GDPR comes into play, several financial penalties for non-compliance will be enforced. Penalties are severe enough that companies who don’t comply face fines of up to four per cent of their global revenue, or 20 million euros – whichever is greatest. Now, with the deadline of May 25th looming, advertisers in the Asia Pacific (APAC) must take heed.

Why should advertisers in the Asia Pacific be concerned with GDPR and what does it mean for consumers in the region? The industry is currently experiencing many significant challenges such as the aggressively expanding Amazon empire, and GDPR is yet another challenge that advertisers need to overcome. According to research from Forrester, media and retail companies are among those least prepared to meet GDPR compliance by the May 25th deadline. Forrester estimates that only 27 per cent of global retailers will be fully GDPR-compliant, leaving the remaining 73 per cent in a race against time for potential failure.

The GDPR aims to provide consumers with the power to decide when and how their data is collected, shared and used. This includes any information that can be used to identify who they are, how and where they engage with brands and what they purchase (i.e. phone numbers, device IDs, IP addresses, cookie IDs, demographic details). For advertisers, the GDPR creates a crossroad. Online advertising is a data-driven industry reliant on consumer information. Data is the key to improving and personalising consumers’ online shopping experiences, in turn driving healthier sales, elevated brand advocacy and loyalty. Brands are left helpless if unable to learn about and understand their consumers, their likes and dislikes, how they shop and what they want.

Rakuten Marketing research shows that 65 per cent of consumers recognise advertising can enhance their shopping experience. Further to this, 81 per cent of consumers want brands to know that advertising is okay when ad content is relevant, tailored to their likes and doesn’t interrupt their online experiences. In fact, many consumers proactively engage with certain native ad experiences, with some 66 per cent of consumer having intentionally clicked on an ad with the intention to purchase from the advertiser. The challenge is that consumers who don’t share their data under the GDPR framework in response to a knee-jerk reaction to the notice are also opting out of personalised advertising that is designed to add value to their online experiences.

There are reasons beyond the fines for why GDPR should be a priority for advertisers, including the risk of reputation for those found to not be in compliance, which could result in a loss of consumer trust. Rakuten research shows consumers who trust a brand deliver 1.9 times higher in customer value (i.e. spend) than those who are simply acquainted with a brand, without having established trust. The research also shows there is more to lose if non-compliance affects consumers who are brand loyal (7.2 times higher in customer value) or brand evangelists (9.7 times higher in customer value). Compliance is crucial to protecting brand image and it is pivotal in giving consumers piece of mind that they are safe and trusted with the brands they engage and do business with.

There are thousands of Asia-Pacific companies facing GDPR, and retail and media companies are at the tail-end of the preparation curve. With so much at risk – fines, consumer loyalty, potential negative publicity and more – the retail, media and advertising sector must forge ahead and prepare to enter a new era of consumer control. The key to success is developing and serving more customised, relevant ads that entice consumers to opt in and share their personal data with the brands they love. Advertisers who have prepared for GDPR and show compliance have positioned their brands for future success.

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