Video Privacy Protection Act. Good Omens caused unexpected challenges
What was your favorite videotape in the 90s? Don't be afraid; no one will know that you rented "Titanic" or "Pretty Woman" 15 times because there is a law that protects your VHS rental history. And what's most unexpected is that this law still works and creates unexpected challenges for Connected TV advertisers.
The VPPA applies to today’s streaming world and the biggest inconvenience for advertisers is that they can’t ascertain the brand safety or brand affiliations of the shows their ads appear next to.
Last week, a federal appellate court has breathed new life into a class-action lawsuit against the NBA, alleging it violated privacy laws by sharing users' data with Meta via analytics tools. This ruling could ripple across the industry, putting other businesses facing similar lawsuits on alert. In fact, a federal judge in New York hinted that this decision might lead him to rethink an earlier dismissal of a privacy case against NBC Universal, signaling a potentially significant shift in how companies handle user data.
Take a look at CTV's history; technologies are changing so fast that sometimes the world needs to keep up with them. As long as the clumsy, meticulous world of lawyers works on change, we have no choice but to adapt and find ways to get results without breaking the law.
More on how the industry has changed over the last 40 years, you can find in the Historical Overview.
What is the VPPA?
The VPPA is an old law built to protect video rental history, but unfortunately, it scares the heck out of today's streaming publishers.
In the late 1980s, when video rental stores like Blockbuster reigned supreme, Congress passed the Video Privacy Protection Act (VPPA) to protect consumers' rental history from being shared without consent. Back then, it was simple: nobody wanted their VHS rental story linked to their name. The law prevented companies from disclosing which movies a person rented unless they had given explicit permission.
Fast-forward to today and the VPPA is still shaping the entertainment world—this time, in the streaming era. While streaming services like Netflix and Hulu deliver content via the internet instead of VHS tapes, the principles of the VPPA still apply. But things have gotten a little more complicated.
Advertisers want detailed information about who's watching what—specific shows, viewer habits, and more. But when it comes to the VPPA, things aren't always as clear-cut as they might seem. The law was designed for an era of VHS rentals, and while its principles still echo today, its application to the modern streaming world is far from definitive. Sometimes VPPA card may be pulled when it’s convenient. Others publishers, perhaps deliberately or unintentionally, may decide it doesn't fully apply and proceed to share show-level data via programmatic channels.
For advertisers, this creates a delicate balance. You can still target based on broader categories like "drama" or "comedy," but when it comes to granular, show-level data tied to an individual, it's a bit of a gray area. What remains certain, though, is the increasing importance of privacy regulations, and while the landscape is evolving, one thing is clear: advertisers have the right to transparency, they have the right to know which shows they appear next to. Publishers, even cautious ones, can still provide aggregate-level or genre-level data to give advertisers a sense of where their ads are landing without compromising privacy. It's not always a black-and-white scenario, but there are ways to ensure everyone gets what they need.
Risks that advertisers faced
- Restricted data sharing: Under the VPPA, streaming services must obtain consumer consent before sharing information about their viewing habits. This affects advertisers who rely on granular data for campaign optimization. Access reporting on ad performance becomes far more necessary for complex without access to show-level data to become simpler
- Legal risks: Recent lawsuits against companies like Hulu, Netflix, and GEICO showed how easily platforms can violate the VPPA. Brands running CTV ads must understand the legal environment to avoid costly litigation and reputational damage. A violation can lead to fines of up to $2,500 per affected consumer—multiply that by thousands of viewers, and the financial impact is staggering.
- Panel data: The panels can track viewing habits, preferences, and interactions with various media. They include people and data on how these individuals engage with video content across different platforms. This data is needed to understand audience demographics, viewing trends, and advertising effectiveness.
- Reputational damage: Being implicated in a VPPA violation can harm a company's reputation, leading to loss of consumer trust and potentially impacting sales and customer loyalty. Negative publicity from lawsuits can have long-lasting effects on brand perception.
Not refuse, but adapt. CTV Campaigns in a Privacy-conscious world
The VPPA, originally designed to protect rental video histories, now affects how streaming services handle viewer data. But there are more than one way to reach the target audience.
Advertisers can tap into metadata like genre, themes, and mood to target their ads. Picture this: a sports documentary is playing, and without knowing who is watching, you can run an ad for athletic gear that feels perfectly in tune with the content. Or, imagine a high-end travel ad appearing during a luxury lifestyle show—it fits the mood without linking to specific viewer info. This approach makes advertising feel more natural and connected to the moment without overstepping the privacy boundaries.