2020 California Privacy Laws: What Does It Mean for Brands?

Note: We are not lawyers, and this is not legal advice.

The new privacy laws in California, formally known as the California Consumer Privacy Act, went into effect on January 1, 2020 — but now, it’s finally started to impact brands.

What does this new law mean for brands and agencies who manage Facebook and Instagram advertising?

What is the New California Privacy Law (CCPA)?

At the beginning of 2020, the California Consumer Privacy Act (CCPA) went into effect.

On July 1, Facebook implemented Limited Data Use (LDU), which allowed people in California to opt out of having their data collected by businesses. What this means is that starting in July, Facebook started to limit data from users in California (conversions for example) as advertisers had until August 1st to switch to this LDU model by adding in additional code to the Facebook pixel that would allow CA users to opt out of having their data collected.

This was most recently pushed to having this done by October 20, 2020 — but many people are confused, citing that there has been very little communication around the updates that need to be made. On August 1, we started to see California data start to trickle in our campaigns, which is counter-intuitive to what Facebook said.

This new law is different than the European GDPR, which states that individuals have to opt in to advertising and marketing. CCPA simply allows users from California to opt out of their data being sold or shared.

What are Some Advertising Challenges CCPA Brings? 

Facebook Integrations

One of the challenges that CCPA brings to advertisers and businesses is native Facebook integrations via an app, like Shopify or Magento. Because of these third-party integrations, no one is able to alter the code to meet the requirements CCPA requires. It’s challenging to change the code in these third-party platforms, and would require larger integration from Shopify or Magento.

Revenue

For many of the eCommerce brands we work with, the state of California is one of the top 5 revenue drivers in terms of states. If we’re unable to effectively market to them, brands could suffer. Not being able to retarget a site visitor from California obviously impacts revenue, especially since California is such a populous state.

The predictions are that more states will follow the example of California, and these new advertising strategies will become more than just the exception to the rule. As your brand or agency prepares for a potential drop in revenue, it’s important to keep in mind that the strategies you enact now should be in good practice so it’s easy to migrate them if other states follow suit.

Ad Campaigns

On the practical side of this new law, everyone will have to separate out California into its own campaigns for both prospecting and retargeting. Because consumers now have the option to opt out of sharing their data, it will be easier to have residents of California as its own ad campaign.

In addition, because California will now have less data, we will have to set new KPIs for this state. It’s hard to tell what the returns and data will look like — how much brands will be impacted — but it’s safe to say that both prospecting and retargeting campaigns will likely suffer.