By Asina Pornwasin
The European Union’s General Data Protection Regulation (GDPR) is raising the cost of digital marketing and presenting a challenge to companies engaged in this field, a digital marketing agency says.
The GDPR, which is aimed at protecting consumers’ privacy on the Internet, affects organisations that have customers in the EU or collect data on people living with the bloc.
It affects digital marketing because it requires people to give their consent to companies to use their information. Digital marketing relies on the use of vast amounts of personal data in order to deliver targeted campaigns.
Mark McDowell, managing director of Primal, a digital marketing agency, said that digital marketers would want to ensure that the data providers that digital marketing companies work with comply with the new regulations.
“GDPR is very good for the industry overall for the long term as it will improve protections for consumer rights," said McDowell.
He said he always tries to target advertising or content to the right people at the right time with the right message, with the right products and services.
“And having data to do that helps us to correctly achieve that,” he said.
“What is happening right now is that people are downloading apps or subscribing to services from companies without reading the fine print in the terms and conditions, so the change will result in the cost of data increasing because if people do not consent to give their
information, the supply of data will be reduced.
“This means that the costs to obtain quality data will rise. Since the regulations require customers to re-opt-in, the
companies need to notify customers in order to get them to agree to give their consent.”
McDowell said that while the GDPR was announced two years ago, giving people plenty of time to make adjustments, it has only been in recent months that some online providers have swung into action.
The moved quickly to update their privacy policies and consent forms.
McDowell said companies can still take steps to ensure they can protect their businesses with the help of a legal adviser.
He said companies need not be overly worried, as it is not too difficult to ensure compliance with the GDPR.
“When we run campaigns on Facebook, we have the option to take the existing customers’ data, like their names and email addresses, and then upload the details onto Facebook,” said McDowell. “We can then target these people through their information on Facebook. We can also create what we call 'look alike' audiences.
“With this, we can take customer profiles and information on their online behaviour and through Facebook data on these people, we can create another audience who behaves online in the same way as existing audiences.
“If these audiences are primarily people from the EU, it means that we potentially have brands that have not obtained consent from these people to do targeted marketing at them on Facebook.
“So, an alternative for us as a digital marketer, is to rely on information drawn from non-behaviour aspects. This is called contextual advertising.”
McDowell said that an example of this could be that if someone is browsing on the Web for cameras, “we want to display ads on the websites that relate to what the website is about, such as a website that has news about cameras”.
“If I am a customer, I can then see ads about cameras related to the pages that we are on.
“This does not involve using the customer's personal information. It is not about who we are targeting, but rather it is about where and what,” he said.
Coming under the net
Dhiraphol Suwanprateep, the head of the telecommunications, media and technology practice group of Baker Mckenzie's Bangkok office, said that in the case of the processing of personal data of people in the EU related to the sale of goods or services of Thai companies available in the EU, such companies could be subject to the GDPR. This is also the case for Thai companies that track the behaviour or locations of individuals in the EU.
McDowell said the impact of the GDPR on customer engagement becomes more challenging because such engagement requires an understanding of the touch points of the customer journey before they buy something from a company. People may rely on third party data that they buy to understand or to map the customer journey. It becomes more difficult with the new regulatory regime.
However, because the quality of data should be improved, that information becomes much more actual, McDowell said.
“It may be not amount to much in volume or size, but if the quality improves, we could build more active actuals about their journey and we can reach and engage with them at the different touch points.
“People will see less 'spray and pray' advertising.”
Expenditure on digital marketing in Thailand is around US$430 million in 2018, according to KantasTNS Research. The market has an average growth rate of 45 per cent.
But the segment accounts for only 1 per cent of all advertising expenditure, even though digital consumption is very high.
Globally, consumer behaviour is changing, with people spending more time on mobile devices and online generally. Thailand is growing rapidly in terms of the way that people engage.
Thailand has also seen a big shift in TV advertising moving over to digital, because people everyone now has a mobile phone. When they watch TV they also use their phones at the same time. This represents a shift in behaviour.
To address problem of the big gap between digital consumption and digital marketing expenditure, education is required to promote consumer engagement in order to better use marketing investments.
Primal was established two and a half years ago to help Thai brands to grow their presence online through digital media, such as Facebook, Instagram and Google.
“We saw the gap in the market with regard to helping companies and businesses improve the way they engage the customers online.
“We started with four people and have now grown to about 30 people," said McDowell.
Primal has been growing at about 250 per cent year on year, having customers across 80 brands.
"We do not deal with any offline media. We focus only online media,” McDowell said. “We have different services that can help our customers. We help them to produce content, email marketing, display advertising, SEO, and social media as well as help them to develop websites, We are fully integrated as we handle the entire spectrum.
“Primal's big focus is on Thailand and Thai consumers because Thai consumer are not like the rest of Asia. They love video, love social media - it is very unique in the way they behave. We integrate different services. We partner with Facebook and Google as well.”