How Do Data Privacy Laws and Regulations Affect Commerce Media?

Over the past decade, new data privacy regulations have fundamentally reshaped digital marketing. The introduction of laws like the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States has forced digital platforms, ad tech companies, brands, and marketers to rethink how they collect, store, and use consumer data. For some, these regulations have been a source of significant disruption, introducing stricter compliance requirements and limiting traditional data-driven advertising strategies. 

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For others, however—particularly companies with direct transactional relationships with their customers—the rise of new privacy regulations has been a boon. Such is the case for retail and commerce media platforms like Amazon, Walmart, Uber, United Airlines, and many others. By relying on permissioned and privacy-friendly data to target ads to known audiences, the commerce media model aligns well with the new regulatory landscape.

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A Brief History of Privacy Laws and Digital Advertising

Over the past decade, privacy laws have proliferated worldwide, driven by consumer demand for greater control over their personal information. GDPR, enacted in 2018, set the gold standard for privacy regulation, introducing requirements such as explicit consent for data collection and stringent rules for data handling. Similarly, CCPA has empowered California residents with rights to know, access, and delete their data while imposing penalties for non-compliance. These laws have served as models for many other international and state-level privacy regulations in the ensuing years. l

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The impact of these regulations—which emphasize transparency, accountability, and the need for companies to establish trust with their audiences—has been profound. Traditional digital advertising models reliant on third-party cookies, cross-site tracking, and questionable data gathering practices have been severely disrupted. Companies now face challenges in acquiring and leveraging personal data for ad targeting without clear and explicit user consent. 

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Enter commerce media, which focuses chiefly on leveraging the permissioned first-party customer data of retailers and other commerce platforms to serve highly targeted advertisements. Unlike traditional ad networks, commerce media companies collect data through direct customer relationships, such as logged-in interactions, loyalty programs, and purchase histories. This approach inherently aligns with regulatory requirements, as it is rooted in permissioned data collection and privacy-conscious practices, and it enables commerce media platforms to serve highly targeted ads on behalf of brands.

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Privacy Limitations in Commerce Media

While commerce media provides a robust framework for privacy-compliant advertising, it is not without its limitations. One challenge lies in the level of data granularity and transparency that commerce media companies can share with brands. Privacy regulations often restrict the sharing of detailed personal data back to advertisers, limiting insights into consumer behavior.

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Additionally, as commerce media expands beyond on-site campaigns to off-site advertising—such as running ads on external publisher networks or connected TV platforms—privacy concerns grow more complex. Off-site campaigns require careful handling of data to ensure compliance with privacy laws across jurisdictions. For instance:

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• Data Sharing Constraints: Commerce media companies must anonymize and aggregate customer data before sharing it with external platforms.
• Heightened Accountability: Off-site advertising partnerships demand strict vetting of third-party platforms to prevent data misuse.
• Regulatory Overlap: Managing compliance with multiple privacy regulations can complicate cross-border campaigns.

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These limitations highlight the importance of maintaining robust privacy protocols as commerce media evolves to become a more full-funnel tool for brands and advertisers. 

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The Future of Commerce Media and Privacy

To continue the tremendous growth that commerce media has experienced to date, the future of the channel will be contingent on adopting a full-funnel approach, integrating upper-funnel branding campaigns with lower-funnel performance tactics. This evolution will require commerce media companies to collaborate more extensively with external publishers and platforms to reach audiences at scale.

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To thrive in this expanded environment while safeguarding privacy, commerce media companies will have to:

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• Partner with Reputable Platforms: Collaborating with established and trustworthy partners ensures that data is handled responsibly.
• Invest in Secure Technology: Leveraging technologies such as data clean rooms allows for secure, privacy-safe data sharing and measurement.
• Adopt Privacy-First Frameworks: Implementing systems that prioritize consumer consent and transparency will build long-term trust.
• Monitor Regulatory Changes: Staying ahead of evolving privacy laws will ensure ongoing compliance and minimize risk.

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As data privacy laws and regulations have reshaped the digital advertising landscape, commerce media has emerged as a resilient and adaptable model. With its reliance on permissioned first-party data, commerce media offers a privacy-safe solution for brands seeking measurable advertising outcomes. As the industry evolves toward full-funnel strategies, commerce media companies must uphold stringent privacy standards and foster trusted partnerships to navigate this evolving landscape successfully.