The advertising technology industry is on the precipice of a major sea change regarding how members of the Digital Advertising Alliance balance privacy with serving ads to users online.
Last month, the DAA announced it is transitioning its technology platform for members away from the current cookie-based opt-out mechanism to a browser-based extension called WebChoices 2.0. The new extension is compatible with most major browsers and will support opt-outs of both cookies and other emerging technologies, including probabilistic IDs and hashed emails, or phone numbers.
In an interview with the IAPP, DAA CEO Lou Mastria said advertisers in the modern ecosystem are now targeting web users' online identifies at a "portfolio level," whereas browsing cookies were at one time the only source for companies to serve them relevant advertising.
"More and more companies are approaching (delivering relevant ads) with kind of this portfolio approach where it's cookies plus a bunch of other technologies that are out there to create that relevance," Mastria said. "What WebChoices 2.0 does is effectively answer that with a solution where customers can still have transparency and control into that tailoring of advertising, regardless of what the underlying addressability technology or solution is."
Mastria said the WebChoices 2.0 transition will have the greatest impact on adtech companies "who have code on the page" powering a given advertisement.
"Companies who have either pixels or other technologies on-page (can) now read this browser extension that we'll make available and be able to determine in real time, whether that (individual) browser has asked to be opted out or opted down in some way," Mastria said. "They'll be able to read that signal via a low-code reader function, then ingest it and then make some decisions about whether to bid on that advertising inventory or pass it along."
The impacts
In light of the DAA's announcement of the WebChoices 2.0 transition, legal minds in the adtech industry said the move away from cookies could stand to improve adtech companies' compliance with global data protection laws in the near future.
Loeb & Loeb Chief Privacy and Security Jessica Lee, CIPP/E, CIPP/US, CIPM, said DAA's WebChoices 2.0 is taking place in the broader context of the adtech industry's technological shift. More specifically, advertisers are trending away from cookie-based advertising in favor of utilizing other technologies like targeting and tracking hashed emails and other customer identifiers.
WebChoices 2.0 has the potential to offer consumers a better opportunity to exercise control over the advertising they receive and make it easier to opt-out of being targeted using their personal data.
"An opt-out tool that allows consumers to opt out via these other mechanisms, I do think is helpful in advancing privacy," Lee said. "We're seeing privacy regulators push for universal opt-out mechanisms, and so you can see this move toward wanting consumers to have a way to make a global message about themselves if they want to opt-out or they want to make a specific choice about their preferences."
Davis+Gilbert Partner Gary Kibel, CIPP/US, indicated a significant factor in the DAA rolling out the switch this year is due to California Consumer Privacy Act regulations mandating certain processes for offering consumer opt-outs, such as not sending users to another third-party website to manage their preferences. Without saying specifically if WebChoices 2.0 presents a better system for adtech compliance, Kibel said in the abstract, a browser-based preference management interface for consumers will likely be viewed favorably by regulators.
"Having a system where consumers are controlling their preferences that are built into the browser; it's sounding like a more compliant process, but the devil will be in the details," Kibel said. "(WebChoices 2.0) will force all members of the adtech ecosystem to work more collaboratively and with more transparency between partners."
The launch of WebChoices 2.0 is not in direct response to any one state's privacy laws, according to Mastria, who added current DAA Choice tools "do respond to state privacy laws that ask for opt-outs of targeted ads."
The WebChoices 2.0 extension will need to be downloaded by individual web users onto their browser of choice. Mastria said consumers will be able to directly choose which adtech companies they would like to opt out of targeted advertising. The new tool will also allow consumers to check off categories of ads they would like to opt-out of receiving — such as dating or sportswear.
"WebChoices 2.0 will still give the consumer that choice of what they want to opt out of and then it will ask them to install or update the extension," Mastria said. "Those choices will be visible to any company that has code on page on any website where you traverse, and this also expands the footprint of choice beyond just browsers that offer third-party cookie functionality."
Next steps
WebChoices 2.0 is currently undergoing beta testing by "several dozen" companies throughout the summer. Mastria anticipates testing will conclude by the end of the third quarter of 2024 before being available for general release.
The DAA set a deadline of 31 Dec. for companies using the group's cookie-based tool to integrate with WebChoices 2.0, after which there will be a 180-day grace period for member companies before the DAA's independent accountability partners will take enforcement actions for violating users' opt-out choices.
Mastria hopes companies will proactively work with the DAA ahead of the integration deadline.
"The call to action is 'Let's get on board now. We're doing testing, we're doing integration, so call us, and we'll get you into the pipeline,'" Mastria said. "We have asked companies for a timeline because this is relatively low-code solution, it's an easy get. By expanding our footprint, we really expand the ways that we can be responsible to consumers and the brands that want to engage with them."
Alex LaCasse is a staff writer for the IAPP.
