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Deep Dive: How India’s Data Protection Bill will impact online advertising

Consent, data localisation, and other compliance burdens are likely to reorder the online advertising industry for better or worse.

The online advertising industry collects and processes troves of personal data to deliver personalised ads and consequentially will be one of the most impacted by India's Data Protection Bill (DPB), 2021, because when this Bill becomes law, profiling users will not be possible without getting free, specific, informed, and clear consent from users, which, if denied, attacks the very foundation of tailored advertising. But consent is just one of the numerous obligations to which companies will be subjected. In this post, we take a closer look at how the DPB impacts the online advertising industry. You don't have to be located in India to be affected by the DPB. If your advertising reaches Indian citizens, then your data practices need to adhere to the Bill. How online advertising works and who are the major stakeholders? The three main stakeholders: Publishers: Publishers are websites with ad spaces such as news websites and blogs. They use inventory management software called ad servers that helps them sell their ad inventory. Advertisers: These are companies that want to advertise. They use ad-buying tools to buy inventory from publishers. Ad marketplaces: The electronic marketplaces where publishers and advertisers are matched through a real-time bidding process. The bidding price of an advertiser is determined by how valuable that ad space is, which, in turn, is determined based on the data collected about the user seeing the space. For example, a car company will be willing to pay a high price for an ad space appearing to a user who has recently been…

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