You probably use Facebook Ads to market your artist and drive revenue. You’ve also likely heard of the GDPR and privacy laws that went into effect, but you don’t know how they’ll affect you and your business. From increased CPM to reduced targeting options, the landscape of advertising on social media is changing, and understanding the impact these new laws have on your advertising is vital to you being GDPR-compliant. If not, you may be facing some serious fines. So, we’re here to break it down for you.

What is the GDPR?

The General Data Protection Regulation (GDPR), passed by the European Union in 2018, enhances individuals' control over personal data that companies may process, store, and use for future communication purposes.

There’s a lot of ground to cover on how GDPR helps consumers do just this, but in short, being GDPR compliant requires:

  • Knowing where all personally identifiable information, or PII, is stored for every fan in your database.
  • Every single way PII is being used. Some common examples include advertising and retargeting or as a sellable or shareable product with company partners.
  • Requesting explicit consent into marketing and communications via unchecked opt-in prompts and including clear instructions on what data is being collected and how it will be used.

GDPR has inspired governments worldwide to pursue similar protections, California’s Consumer Protection Act (CCPA) chief among them. Both policies policy reflect the general sentiment of most consumers today: a 2019 Pew Research poll found that 81% of Americans believe that the potential risks associated with companies collecting their data outweigh the perceived benefits, and 79% are “very/somewhat concerned with how [companies] use the data collected.” This isn’t just passive distrust: when Apple released iOS 14.5 – a software update that allowed iPhone users to restrict developers from tracking them & collecting data across apps, 85% of users worldwide opted out of third-party tracking within just three weeks.

In addition to shrinking audiences you can target, behemoth platforms that rely on third-party data to provide value to your marketing efforts are starting to feel the burn financially. In 2023, Facebook's parent company, Meta, was fined roughly $1.3 billion for GDPR violations. This may be the highest-profile instance of a governing body going after Big Tech for its data collection practices. Still, it almost certainly will not be the last – and the implications for the entertainment industry are enormous.

Have Your Facebook Ads Been Getting More Expensive?

If you’ve run any social media advertising since 2018, you’ve likely been impacted by GDPR. Most digital advertising platforms essentially operate as an auction house: companies “bid” against each other for the opportunity to serve their ad to a user. The more advertisers bidding for the same user, the higher the bid has to be to
“win”. Companies get around this today by choosing more specific targeting parameters, decreasing costs by narrowing the field of competing bidders, AND increasing their chances of conversion by serving ads to users more likely to convert based on behavioral trait assumptions. However, with GDPR and other data privacy initiatives limiting the ability of tech companies to track and store user data, you’re already seeing a reduction in the quantity and quality of targeting options available.

This has driven up average CPM (a.k.a. how much it would cost to serve your ad to 1,000 users) while simultaneously lowering conversion rates. Without the ability to capture data through third-party cookies, ads have become more expensive as platforms no longer have effective targeting methods.

Adjusting to the Changing Digital Ad Marketplace

You can either raise prices to cover the higher advertising costs (and risk losing fans in the process) or market smarter. This is why investing in your first-party data collection is more important than ever for long-term wins that drive conversions and delight fans.

As the world moves towards a cookie-less future, artists must rely heavily on their zero and first-party data to reach the most engaged fans. Through Volume.com, artists have been able to collect and monetize their fans through live broadcasts and artist subscriptions and increase their collection of emails.

If you’re ready to take the next step, our team is here to help. Contact us today to learn more about how Volume can help you grow your first-party data.

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