Personalized ads are getting tougher thanks to privacy laws
Most advertisers are bracing for big changes
The advertising world is grappling with the growing impact of privacy laws, and the majority of advertisers are expecting their strategies to shift considerably. A study conducted by Proximic shows that 88% of advertisers anticipate that new privacy regulations will moderate or significantly alter how they approach personalized ad targeting.
This comes largely from the sweeping reforms introduced by regulations like the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States. These laws are disrupting the digital world, forcing marketers to rethink how they gather and use consumer data for targeted advertising.
Nearly 90% of advertisers say privacy laws are hurting personalized ads
As advertisers rely on data to craft tailored ad experiences, nearly 90% foresee that their ability to do so will be constrained.
GDPR and CCPA, which place strict limitations on the collection and usage of personal data, are key factors in this shift.
Companies are now required to prioritize consumer consent and transparency, limiting access to the data that fuels personalized ad strategies—pushing advertisers to find alternative ways to maintain relevance and engagement without breaching privacy regulations.
Data access and personalized ads are both in the crosshairs of new laws
The changes brought by privacy laws extend beyond targeting. These regulations are expected to limit advertisers’ overall access to consumer data.
Since personalized ads rely heavily on the ability to track and understand consumer behavior, this tightening of data access poses a direct threat to advertising efficacy.
The impact is expected to hit industries that rely on detailed user profiles to deliver customized messages, forcing them to rethink the types of data they collect and how they comply with legal requirements.
The messy patchwork of state privacy laws in the U.S.
Advertisers in the U.S. face the challenge of managing a fragmented privacy landscape due to the absence of a federal data law.
Currently, 11 states have enacted their own privacy regulations, with each law carrying its own nuances and requirements.
This creates a patchwork of legal standards, making it difficult for advertisers to maintain uniform compliance across regions. Lack of consistency here forces businesses to adapt their data collection practices and compliance protocols on a state-by-state basis, adding complexity to their operations.
11 U.S. states are making privacy laws even more complicated
With privacy laws now enforced in 11 U.S. states, advertisers are dealing with more complexity than ever. The variation in regulations across states means that a one-size-fits-all approach is no longer viable for national campaigns.
Businesses need to stay updated on the specific rules for each state, and in some cases, this may require adopting separate strategies for different regions. Keeping up with these regulations is time-consuming and resource-intensive, adding a new layer of operational difficulty for marketers.
No federal data law in the U.S. means fragmented compliance chaos
The absence of a federal data privacy law in the U.S. is a major source of fragmentation. While the European Union’s GDPR offers a single framework for all member countries, the U.S. lacks such consistency.
Instead, advertisers must juggle the different standards imposed by individual states, such as California’s CCPA. This fragmented approach is leading to compliance chaos, where advertisers must continuously adjust their practices to align with varying state laws, further complicating their ability to efficiently run nationwide campaigns.
Audience targeting is taking the biggest hit from privacy regulations
Advertisers say audience targeting is the biggest casualty of privacy laws
Among all the areas of digital advertising, audience targeting is being hit the hardest by privacy laws. The report reveals that 61% of advertisers believe that these regulations will have a significant negative impact on their ability to accurately target specific audiences.
Data collection practices, which once enabled precise audience segmentation, are now under strict scrutiny, forcing advertisers to adapt their targeting methods.
The loss of third-party data, in particular, is reducing advertisers’ ability to serve highly relevant ads, which could lead to lower engagement and conversion rates.
Advertisers are already shifting their targeting strategies to cope
To manage these challenges, 60% of advertisers have already started adjusting their targeting strategies. Many are turning to first-party data, consent-based data collection, and contextual targeting to fill the gaps left by stricter privacy regulations.
Adding to this, 56% have overhauled their entire digital strategy to better align with the new legal frameworks. The number of data partners advertisers work with has also decreased, with 47% reducing their partnerships to ensure better control over data compliance.
Programmatic channels are rising fast in the wake of privacy concerns
Advertisers are moving budgets to programmatic as privacy laws bite
The rise of Connected TV (CTV) and programmatic advertising is coinciding with the tightening of data privacy regulations. CTV is becoming an attractive option as it provides advertisers with more transparent and measurable data streams, which are better aligned with privacy regulations.
Programmatic advertising, which automates the buying process, is also growing as advertisers look for more efficient ways to target audiences without relying on invasive data collection practices.
CTV and programmatic budgets are exploding thanks to privacy pressures
Connected TV and programmatic advertising are seeing surges in investment as a direct result of privacy concerns. Advertisers are increasingly focusing on these channels, as they offer scalable options that comply more easily with data protection laws.
Demand for programmatic advertising, in particular, is booming, with advertisers reallocating budgets to these channels to offset the impact of reduced data access in other areas.
As privacy laws continue to evolve, CTV and programmatic are likely to play an even more central role in future ad strategies.
Advertisers are desperate for more accurate measurement as privacy rules tighten
As privacy laws restrict traditional tracking methods, advertisers are scrambling to find new ways to make sure their campaigns remain effective.
Measurement is becoming a top priority as advertisers need to prove the ROI of their ad spend in a more privacy-conscious environment. Without the ability to rely on third-party data for granular insights, advertisers are exploring more sophisticated tools that offer transparency and precision.
Advertisers are hitting major roadblocks with privacy law compliance
According to the report, 40% of respondents face challenges in accessing audience data in regions with stricter privacy laws, limiting their ability to reach key demographics. To add to this, 38% report difficulty in keeping up with the ongoing changes in privacy legislation, as new laws continue to be introduced and existing ones evolve.
The continuous adjustments needed to stay compliant are proving to be a major operational burden for many companies.
Privacy compliance is driving up costs for 30% of advertisers
Privacy law compliance is both a logistical and financial challenge. Nearly one-third of advertisers (31%) report increased costs directly related to adhering to changing privacy regulations.
Whether it’s investing in new technologies, hiring additional legal expertise, or reallocating resources, the cost of compliance is rising.
Financial strain here is likely to persist as new privacy laws continue to roll out, forcing businesses to further adjust their spending to meet regulatory requirements.
Final thoughts
As privacy laws continue to impact the advertising world, the question every brand must ask is this: Are you ready to adapt and innovate, or will outdated strategies leave you behind? It’s time to assess your data practices, explore privacy-first technologies like AI, and rethink how you connect with your audience.
