Google and its advertising post GDPR. Brokers beware that controls will launch on Monday, May 7 for DFP

It is fair to say that, although the worldwide web is a global font of resources and information, a handful of internet giants are so influential that even the largest of multinational corporations have to bow at their feet.

Google, the world’s most prominent internet resource, is a vital and overarching part of every individual and corporate daily existence and therefore the firm’s policy with regard to advertising controls is of great importance to retail FX brokerages, who are reliant on digital advertising and media campaigns to reach new and existing customers.

The recent and somewhat controversial banning of certain electronic trading related advertisements to retail audiences by Facebook and Google struck a very disconcerting chord with many FX industry participants.

A strong effort to differentiate the bona fide from the chancers with no real remit to be operating in organized countries with good quality consumer environments and an expectation of quality by our own industry participants would have achieved two potential outcomes.

The first would be to make a clear distinction in the minds of Google and Facebook’s digital advertising network executives and the Millennials that operate their pay per click schemes and advertising networks so that those twenty-somethings with a beard that looks like an upended Box hedge whose expertise is in digital marketing and not financial technology.

Today, Google has gone a step further and defined its Ad Technology Provider Controls launching ahead of the GDPR by sending an email to all owners of websites that accept banner advertising.

Google’s stance is:

Dear Partner,
As we shared in March, we are launching new Ad Technology Provider (ATP) Controls for you to choose the ad technology providers who will be able to serve and measure ads on your sites and apps for users in the European Economic Area (EEA). The controls will launch on Monday, May 7 for DFP and shortly after for AdSense and AdMob, and your settings will take effect on May 25, 2018.

We encourage you to use these controls to choose your preferred list of ad technology providers. The full list of ad technology providers featured in those controls is available in the Help Center for DFP/AdX, AdSense, and AdMob. All providers listed have shared certain information that is required by the GDPR. If you don’t engage with the controls to choose your own list, we will apply a ‘commonly used’ list of ad technology providers. The commonly used list comprises the ad technology providers associated with the most revenue to publishers from EEA users from all programmatic demand sources.

Within these controls, you will also have the ability to:

Present users a choice between personalized and non-personalized ads. We have already made documentation (DFP, AdSense) available for you to pass a non-personalized signal in our tags. App developer guides are available for passing this signal (DFP Android, DFP iOS, AdMob Android, AdMob iOS).
Select to serve only non-personalized ads to all users in the EEA, if you wish.

Choose which reservation line items are eligible to serve in personalized and non-personalized mode.

Finally, to further clarify requirements under our updated EU Consent policy, as well as Google’s controller position, we have published additional information on our Help Center to fully address your questions (DFP/AdX, AdSense, AdMob).

If you have any questions about this update, please don’t hesitate to reach out to your account team or contact us through the Help Center.

Sincerely,
The Google Team

In  order to provide value to retail FX firms, most sites use DFP’s rotational banner serving advertising network, hence this is vital.

We do, however, see a potential increase in the need for firms to advertise via direct agreements on specific sites that relate to FX rather than across generic ad networks or by use of remarketing pixels, and we also envisage a greater demand for attracting new commercial partners via specific, targeted offline events due to the bureaucratic direction that online advertising has taken and its notorious low CTR on the retail side.

As the regulators and search engines do not know the difference between a prestigious London firm with a 30 year history and a two-man effort in the Seychelles whose remit is to steal money and look official with scant CySec licensing and minimal/temporary physical operations, it is up to us to continue to push the powers that be to understand. This would mean that ad bans and trading restrictions would only apply to those who have no intention of longevity or whose executives come from gaming and lead buying/stealing instead of the genuine financial sector in the civilized world.

As it now stands, the natural selection will likely begin post-restriction.

Speaking to a very widely recognized financial reporting and analytical entity in London this morning, opinion was  that there will likely be a consolidation of business within the European Union, leaving a situation rather like that of the United States post implementation of the $20 million minimum capital adequacy requirement which is heavily policed by the NFA.

This means that CMC Markets, IG Group and Hargreaves Lansdown will continue to dominate in the UK. Their customer bases are over 70% British in the cases of CMC and IG, and 100% British in the case of Hargreaves Lansdown.

Customers of that caliber who are loyal and appreciate the quality of their providers will stomach the leverage restrictions and continue as normal, whilst smaller firms that cannot hack it, will pull out.

Indeed, we are aware that companies that wish to operate according to the most stringent rules and onboard very high quality customers for a long term business strategy will be able to submit their justification for advertising to Google for approval, but still – this is specific to our industry and still appears restrictive.

One CEO of an FCA regulated medium sized brokerage last month told FinanceFeeds “I am not sure that ESMA is doing enough to protect EU clients. I guess the decision is to protect the EU retail markets, but, what will small traders who prefer leverage 1:500 do? Yes of course 30x is more than enough, but not for the ones with a great risk apetite. When looked at like this, it defeats the purpose of ESMA protecting clients as retail clients will send their funds offshore in a non controlled environment”

A compliance officer in the City responded to this by saying “I doubt there will be a substantial push to offshore, since the big firms have EU and non-EU licenses and they won’t onboard an EU client offshore. Who are you going to go to? Australian firms like IC and Pepperstone have EU entities or getting them. It will be interesting to see how volumes are effected by leverage change.”

Whilst the data protection rules and overtly nervous approach to retail client protection reigns supreme, specific and targeted approaches are certainly necessary.