• by Laurie Sullivan , Staff Writer @lauriesullivan, October 16, 2023

The first snowfall of the season came and went this past week in Wyoming at the edge of the Bridger-Teton National Forest, covering the golden leaves of Quaking Aspen and green pine trees filled with pine cones. Although I moved six years ago from California, a state I still love, I continue to follow the politics of Governor Gavin Newsom.

Last week, Newsom signed the Delete Act, which allows state residents to make one request to remove their information from all data brokers registered in the state. The move could create unintended structural consequences for the advertising industry.

Senate Bill 362, known as the Delete Act, directs the California Privacy Protection Agency to create a new tool by January 2026 to accomplish this, but the act has national implications.

“This presents a large challenge for the buy side of the industry that relies heavily on third-party data to build match lists,” said Nick Pinks, CEO at Covatic, which supports media companies that deliver addressable advertising. “This Act and other tightening regulations are quickly making these lists more difficult to create. Without the use of third-party data, the industry needs alternative approaches to delivering addressable advertising, such as on-device audience curation, where the user has a direct and transparent relationship with the processor and no data storage is needed.”

In Europe, Pinks has seen a significant year-on-year growth of right-to-be-forgotten (RTBF) requests submitted to online search platforms and expects these to become more commonplace during the next few years.

California’s Delete Act will be a catalyst for similar change and further privacy regulations in the U.S., and companies will need to be prepared to delete the data on request. The industry could see other states adopt the same privacy protection laws by the 2026 deadline.

“Consumer privacy protection is an unstoppable trend and the Delete Act is the latest brick on a more ethical ad-tech path,” said Anthony Flaccavento, GM of the Americas at Ogury, which supports personified advertising. He believes the signing of the California’s Delete Act into law marks another significant milestone in the journey toward a privacy-first digital advertising ecosystem.

“While we understand the concerns expressed recently by ad trade bodies about this legislation, we believe that on balance, the Delete Act will be embraced by consumers,” he said. “Consumers are increasingly unwilling to share personal data with companies, particularly data brokers. This user rejection of online tracking en masse has inspired a raft of consumer privacy regulation starting with General Data Protection Regulation in Europe in 2018 and followed by the California Consumer Privacy Act.”

Impact On Data Brokers

There are about 500 data brokers registered in California, ranging from people-search sites to analytics firms that work with political campaigns. Magnite, Equifax Data Services, and Neustar are among those on the list.

Those that capture and sell consumer data must process data deletion requests within 45 days.

Some warn of unintended consequences, as regular audits and compliance reporting requirements must be met.

“With the Delete Act now signed, marketers will face further reduction in accessible consumer insights, impacting their targeting capabilities,” said Ryan Stewart, head of publisher acquisition in North America at MGID, a native performance and programmatic advertising company. “Smaller enterprises with limited first-party data might find it challenging to reach their audiences effectively. For consumers, this will mean an influx of generalized advertisements, diminishing their chances of discovering new, relevant products and services.”

Stewart calls on the ad industry to build new solutions for non-intrusive, user-friendly ad strategies that don’t rely heavily on personal data, such as contextual advertising. “Expect to see publishers boost their first-party data strategies by doubling down on pathways that convert unknown audiences into known, while also diversifying their revenue streams to reduce reliance on advertising,” he said.

Embracing California’s Privacy Call

Brian Quinn, AppsFlyer president and GM, champions using privacy-first technologies to empower advertisers and publishers, but is still looking for a national policy that is not as piecemeal.

“California continues to set the standards for the U.S. when it comes to prioritizing data privacy,’ he said. “While this will limit the amount of data that is out there for advertisers, we as an industry should celebrate anything that puts data privacy at the forefront and gives consumers more control over their data.”

While this is a major step for consumer privacy, there are so many unanswered questions.

The CCPA defines a California resident as a person who resides in California, even if the person is temporarily outside of the state. But, if the person is temporarily out of state, how do the data companies identify that person when out of state? What if you own property in the state of California, but the person is not a “resident”?

Californians today have the right to ask businesses to delete their personal information, but consumers have to make multiple requests. This bill aims to make it easier.

Senator Josh Becker who wrote SB 362, said in a statement that data brokers possess thousands of data points on each person the data to the highest bidder, selling data on everything from reproductive healthcare and geolocation, to purchasing data for clothing and food items.

The advertising industry has analyzed data capture and use techniques for years. Back in 2019, Apple CEO Tim Cook penned an article for Time magazine that suggests the “Federal Trade Commission should establish a data-broker clearinghouse, requiring all data brokers to register, enabling consumers to track the transactions that have bundled and sold their data from place to place, and giving users the power to delete their data on demand, freely, easily and online, once and for all.