As brands lean more on data-driven marketing, they can’t ignore potential data privacy concerns. They can start by taking these five lessons to heart.
Last year was a year of data privacy abuses and data privacy reforms—and 2019 looks to be much the same. For a long time marketers have been relaxed about how they collect and handle consumer data; a change is long overdue. As brands lean more and more on data-driven marketing, they can’t ignore potential concerns. It’s time for brands to do a data privacy overhaul, and they can start by taking these five lessons to heart.
1. If you didn’t ask for your data first, it’s probably pretty dirty
Third-party data can seem like the answer to your marketing prayers. Especially in the digital age, there is a massive amount of data available on almost all consumers across the globe. But it doesn’t take long to realize these data buys aren’t what they seem to be. When it was collected, how it was collected, and how many other brands have access to it is all unknown. In fact, SafeGraph CEO Auren Hoffman estimates that the accuracy of purchased marketing data is typically between 10 and 20 percent.
But even when you have faith that the information is accurate—when you collect your own first-party data, like consumers’ browsing and transaction history—the assumptions you make from it can be way off. When you don’t ask the consumer directly for information, there’s no way to validate your assumptions. This is why that new cast-iron skillet you got for your cooking-obsessed dad makes brands think you’re a grill aficionado, when in reality you burn everything you touch.
Imagine if that brand had asked why you were buying a skillet. They would know you bought it as a gift and that you haven’t cooked for yourself in the past five years. They’d know to only contact you around gifting times of the year, instead of wasting those touchpoints trying to start your cooking career.
By starting a conversation with the consumer, you open up a dialogue and paint a real picture of the consumer—the kind of picture that shapes touchpoints into relationship-building moments that also increase conversions and ROI.
2. Consumers care more than you think
Consumers went a long time not knowing how much data was being collected on them, let alone that companies made money off its direct sale. That brands have been carelessly collecting, buying, and sharing consumer data is finally coming to light, and consumers are taking note. From the mundane (selling email addresses) to the sensational (Cambridge Analytica, anyone?), consumers consider it a huge invasion of their privacy.
That invasion of privacy comes at the high cost of consumer trust. Last year, Jebbit conducted a study of 1,000 US consumers on what brands they trust and why. The Consumer Data Trust Index revealed that 66 percent of consumers not only want more control over their data, but say that it would increase their trust in a brand.
3. Brands are asking for too much info from their consumers
The Consumer Data Trust Index also found that 36 percent of consumers distrust brands that ask them for too much information. When you’re just buying some new socks, there’s no reason for a brand to ask to track your GPS location. That doesn’t mean they shouldn’t request information at all, but the information they collect needs to be relevant to the brand experience.
Back to the socks—they could ask about what activities you do or what climate you live in to learn more about how you’re using the socks. To hike or to go to work? To keep warm or to lounge in the AC? What was most important factor in your buying decision? This highly relevant information gives brands simple way to tailor future messaging in a meaningful way.
4. Personalization should not be at the expense of consent
Over half of consumers admit to switching brands if a company fails to personalize experiences. Consumers want and expect personalized experiences: It makes their experience with a brand smoother and more meaningful, and it makes it more likely that they’ll come back.
So it makes sense why marketers personalize—but to what lengths are they going in order to make their content relevant? Many times, it’s by buying third-party data, leaving consumers wondering how brands learned this information about them. In a study from InMoment of 2,000 US consumers, three out of four reported being creeped out by personalization. Without transparency, content may be personalized, but it’s at the expense of consumer privacy and trust.
Personalization is still as important as ever, but brands need to make sure they’re doing it the correct way: by collecting consented, first-party data that the consumer owns. Personalization based on unconsented data is not worth breaking ties with consumers.
5. The status quo is no longer the status quo
Buying and collecting data without consent has been the norm for a long time, but that’s changing fast. General Data Protection Regulation (GDPR), which went into effect last year, was the first legal blow that many companies faced. The law requires companies to get consent from consumers before processing their personal information and gives them the right to delete the information that companies have collected on them. Although it’s an EU regulation, it affected many companies around the world and got brands thinking about how they handle consumer data.
Next came the California Consumer Privacy Act. It’s expected that the CCPA will affect more than half a million US companies. These brands have until January 1, 2020 to ensure compliance. Because the CCPA takes aim at third-party data sharing, it will make third-party data buys less effective and also hurt some forms of targeted advertising.
These data privacy regulations are only the most recent; it’s expected that more will be put into place in the near future. While many brands see this as a challenge, they should really see it as an opportunity to build an even closer and trusting one-to-one relationship with their consumers.
Published March 5, 2019