CEO Insights: Mobile World Congress 2018 – New Devices and New Regulations

What’s next for the future of mobile? Verto’s team spent last week at the 31st annual Mobile World Congress in Barcelona, showcasing our new solutions and latest report on e-commerce and consumer behavior, to an audience from across Europe and the globe. We also had a chance to catch up and check out the latest mobile trends for 2018.

The Buzz at MWC: Samsung and 5G

One of the show’s biggest announcements came from Samsung, who launched their new flagship S9 smartphone at the show, accompanied by the expected flurry of PR and marketing fanfare. But many industry pundits, including publications like the Wall Street Journal, noted that incremental developments in smartphones, specifically around hardware, are becoming minuscule – it is increasingly difficult for device vendors to outperform each other purely based on hardware specs.

Another core topic at MWC focused on the evolution of wireless network connectivity. Most consumers in the U.S. and Europe currently have access to pretty decent 4G connections, but network equipment manufacturers like Huawei (China), Ericsson (Sweden), and Nokia (Finland) are already actively pushing forward with 5G. Over the past few years, talk of this new generation of  5G networks has been front-and-center during the conference, but without significant any contractual commitments. This year, MWC was full of contractual announcements and talk about the concrete roll-out of these 5G networks, ranging from the U.S. to Finland. This is great news for the telecom industry at large, and will  help network equipment vendors return to growth again as carriers finally start to invest in upgrading their network infrastructure again.

Photo credit: Mobile World Congress
Photo credit: Mobile World Congress

How Will GDPR Impact the Measurement Industry and Beyond?

And of course, one of the most pressing topics at MWC this year was GDPR (General Data Protection Regulation), and its impact on companies, consumers, and investors and companies across the technology landscape. The new regulations go into effect as of May 25, 2018, and are expected to have especially profound implications for the adtech, content, and publishing sectors, as the new rules could make it significantly more difficult to execute data deals, obtain data without explicit user content, and utilize industry-standard tools like cookies.

Investors are also wary. As our colleagues at Arete Research noted, “The investment community has been truly spooked by GDPR, making it a regular question in company conference calls; this reflects more the uncertainty around implementation and enforcement, and the reticence of companies to commit to “full compliance” for fear of being later found in breach of regulations (sparking investor lawsuits). Many companies are even reluctant to define their role: will they be data collectors, processors, or both? And of course we don’t yet know what ePrivacy rules will entail.”

For companies in the audience measurement segment, compliance with GDPR could spark significant changes in methodology and best practices. Traditionally, the majority of audience measurement has been conducted via site-centric tagging to obtain census-level data. Under the new GDPR rules, each user must separately give consent for each cookie or tag. That means that the resulting data will be at best partial, not to mention the legal challenges involved and the fact that different publishers might implement tags in different ways. Verto is already fully GDPR compliant; unlike some of the offerings from our competitors. Verto’s solution is based on a double opt-in panel model with disclosures and consent already integrated, and we look forward to further leveraging our methodology going forward.

Although most of the industry talk has centered around how GDPR could potentially make things harder for tech giants like Google and Facebook, there was consensus that these two companies might actually benefit from the new regulations the most, at the expense of other advertising-driven publishers. After all, both Facebook and Google already have huge databases of primary first party data, and they do not need to rely that extensive on third party datasets. Smaller publishers have less access to data about their consumers, and are therefore more dependent on third party datasets – for example, the ones coming from Google and Facebook.

In fact, according to Arete Research, “The wider concern is that the vast first-party datasets of Facebook and Google and their ability to “acquire” consent alongside “free services” actually strengthens their position relative to the professional and long-tail publishers. The nightmare scenario would be that, without additional third-party data to help define and target audience segments, CPMs would drop sharply for publishers relying on third-party ad networks (including Google’s), damaging already troubled business models, while Facebook and Google extend their scale advantage. Any number of companies that “buy in” data to help advertisers find audiences would find their businesses limited, or bear the legal risk of relying on loose definitions of “legitimate interest” in retaining targeting data.”

Looking Ahead: GDPR in 2018 and Beyond

One thing is for sure: within the next two months, even the world’s biggest and most influential tech companies will require completely opt-in based measurement data to support their marketing and sales teams, and the GDPR rules will make it more difficult to use internal data for such purposes. And naturally, third party media measurement and audience measurement validation will continue to be a valuable and necessary asset in the future.

Research companies whose strategy and methodology are not based on strong consumer-centric opt-in principles will not have the same freedom as Verto in deploying their data to clients who want to understand competitors, publishers who want to monetize their audience, or to the adtech platforms that fuel ad targeting. This is a sweet spot in the industry, and one in which Verto looks forward to becoming a category leader over the next few decades, leveraging our strength in providing deep (and GDPR-compliant) insights and data on today’s liquid cross-platform consumers.

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