CYBERSPACE – In the recent history of digital advertising, there has been one predictable trend: Year over year, the aggregate revenue from digital ads has grown, steadily and consistently.

There’s no indication that 2018 will buck this trend – in fact, for the first time, analytics and consulting firms like Magna Global are predicting that digital advertising will comprise 50% of all advertising sales in 2018.

At the same time, new regulations, technologies and laws are poised to impact the digital advertising space in unpredictable ways. The complexity and depth of European Union’s General Data Protection Regulation (GDPR), for example, has even spurred some companies to shutter the Euro-facing elements of their advertising businesses rather than try to navigate the potentially choppy waters of the GDPR.

Ad networks serving the adult industry will experience a significant impact from the GDPR as well,

“Huge regulations that have just come in now as part of the GDPR and user consent/privacy legislation will affect a lot of people and (traffic) volumes available,” Chris Georghiou, the Head of Business Development & Acquisitions for DPLAds told YNOT. “The common consensus is that there will be less traffic available and therefore prices will increase.”

This impact from the GDPR isn’t all bad news though, as Georghiou sees things.

“Naturally this should lead to a higher quality of traffic, which on the market is only a good thing,” Georghiou said. “This in turn should be beneficial for all parties. Advertisers are happy to pay more if the traffic converts for them, and users are happy to pay more to use/join a site that is relevant to them and in line with what they are looking for.”

Perhaps no new law or regulation has injected more uncertainty into the adult market than the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA), which was signed into law by President Donald Trump in April.

“FOSTA regulation has caused many challenges and have been an overall negative impact for both advertisers and platforms,” Tony of ReactAds said. “Advertisers big and small had successful campaigns running for years on some of these sites, we have seen many sites shut down over night (both willingly and unwillingly). This seems to be a struggle for mostly US based organizations.”

The problem, Tony said, isn’t the notion of combatting sex trafficking or human trafficking – he says he believes FOSTA was written with “good intention” – but the specific means by which Congress has targeted those crimes, crafting a bill in which the good intent of fighting human trafficking is “but not necessarily being implemented correctly.”

“That being said, rules are rules,” Tony said. “Once again, we need to make necessary corrections to be compliant with them.”

Arguably even less predictable than the impact of GDPR on digital advertising and online ad networks are the policy changes and technological standards which come from the private sector, including changes in the ways ad-blocking software works and banking regulations which often seem to be applied selectively and randomly when it comes to businesses and advertisers in the adult entertainment industry.

“Between banking hurdles, Google, other online regulations and the unforeseen changes, it’s very difficult to say what type of challenges we will have in the future,” Tony of ReactAds told YNOT. “All we can do it really sit back and try to follow, adhere and adapt to the required changes we will be faced with.”

JuicyAds founder and CEO JuicyJay noted that age verification measures like the one pending in the United Kingdom may have a side effect on digital advertising in the adult sector, by pushing users toward the use of technologies to circumvent the UK’s blocking and filtering scheme – technologies which will also make such users harder for ad networks to track and measure.

“AdBlocking, Proxy/VPN usage – which will hurt targeting accuracy – and Age Verification will have a great impact on the advertising industry as a whole,” Jay said.

Of those factors, the one which probably has received the most coverage and concern within the online advertising space has been the new protocols in play on various ad blockers, but Jay said thus far, the changes made to Chrome’s ad blocker hasn’t been as substantial as some predicted.

“We had expected the Chrome Ad Blocker to be a bit more impactful than it has been,” Jay said. “Surely, AdBlockers are taking a chunk out of Publisher revenues, but ‘disallowed’ types like PopUnders and PopUps are still being delivered today.”

While ad blockers are popular among some more sophisticated web users, Jay noted the companies which market ad blockers often have their own barriers to deal with as they seek better market penetration and consumer-adoption levels.

“Ad Blocking has been determined to be legal in Germany, and potentially other courts in other countries will rule similarly,” Jay said. “The whole AdBlocking thing is an arms race, and Advertisers have much more money than AdBlocking companies – so who do you think is going to win?”

In a space as dynamic as the online advertising sector, the only true constant is change. As advertisers, publishers, consumers, ad networks and the online platforms they all use adapt to new regulations, laws and technological challenges, those who thrive will be separated from those who fail not by how accurately they anticipate the unpredictable shifts which will stand in their way, but by how well they adjust to the vicissitudes of the market as they occur.

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YNOT’s special reports on advertising and online ad networks will continue through the end of the month. Read more about this month’s theme here.

Image © Dan Neacsu