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February 14, 2019

How the CCPA Will Change Marketing for the Better

Data privacy legislation like the CCPA may cause marketers headaches in the short term—but in the long term, it will make your marketing smarter.

Jonathan Crowl

In less than a year, the California Consumer Privacy Act of 2018 will go into full effect, creating the biggest seismic shift in data collection and consumer privacy since the European Union’s General Data Protection Regulation was implemented in May of 2018.

Much like GDPR affected companies outside the EU, the implications of the CCPA for businesses and marketers extend far beyond the California border. For companies that lean heavily on data-driven approaches to business and revenue growth, the CCPA could force an overhaul of data collection and marketing practices—especially when those companies rely on covert data to drive their marketing and branded experiences.

But there’s more to the CCPA than merely forcing marketers to comply with new laws. Although it won’t be without its growing pains, the CCPA’s new standards will ultimately benefit marketers as well as customers, yielding long-term benefits for organizations willing to embrace this period of change.

Will Your Business Be Affected by the CCPA?

While the CCPA could be influential in shaping additional consumer data regulations, for now the law’s scope is limited to mid- to large-sized businesses that do business in California. Companies are subject to the terms of the CCPA when they meet one of the following conditions:

  • Annual revenue exceeds $25 million;
  • Company receives data from at least 50,000 people, households, or devices every year;
  • Company earns at least 50 percent of its annual revenue from selling personal data.

In other words, you won’t get fined by the State of California for using a retargeted ad to sell a single candle to someone in Fresno. But the International Association of Privacy Professionals still estimates that more than half a million US businesses will be affected by the law, not to mention international companies that meet the criteria. (More technical details of the CCPA are covered in our “CCPA 101” guide.)

Even if you aren’t directly affected by the CCPA, it’s worth paying attention to the marketing implications that will force strategic shifts at other organizations—and change the competitive marketing landscape for your own brand.

Targeted Marketing is Thrown Into Flux

It’s possible that the CCPA’s bark will be worse than its bite. The new regulations give consumers the ability to opt out of data reselling and to request that the data be deleted, but it remains to be seen how many consumers will actually take such actions.

Regardless, many experts believe the value of targeted advertising, retargeting campaigns, and other programmatic channels will be hurt by reduced access to third-party data. The post-CCPA marketing landscape will cast even more skepticism on this data source and likely limit its availability as third-party vendors struggle against increased regulation and dwindling data inventories.

Marketers may be fearful, but as Harvard Business Review reports, the downfall of third-party data isn’t necessarily bad for businesses. This “dirty data” has always been suspect: It often comes from unknown, questionable sources and requires marketers to make inferences based on the trends identified in these data sets. In many cases, marketers can’t even be sure how old the data is, and in the fast-changing digital era, data’s shelf life is short—what good is targeting a consumer for diapers when their child has been potty-trained for a year?

If anything, reduced access to third-party data puts pressure on companies to develop better first-party data acquisition channels, keeping information in-house and ending their reliance on data that quickly becomes outdated and unreliable. With this focus on reputable first-party data, businesses can defend their data collection practices to their customers by pointing to the role of that data in shaping better experiences.

The Value-Added Play: Selling Data-Driven Experiences to Your Audience

To some degree, the CCPA’s regulation of data ownership is merely a more robust extension of a business dynamic that’s been in play for years. Companies have long been dependent on users granting access to location metrics and other data collected through personal devices, and consumers have by and large been willing to grant access, even when they may harbor reservations about how that information will be used.

But it’s a trade-off consumers are willing to make in exchange for the experience this data-sharing enables. To some degree, the CCPA is only formalizing an existing consumer demand for value in exchange for their data. Under the CCPA, consumers have more legal protections and rights than in the past, placing them in a better position to exact that demand from companies. One of the easiest ways to deliver on that demand without abandoning a data-driven business strategy is for companies to be explicit about why consumers should share their data in the first place.

By demonstrating how this information drives better service, personalization, and branded experiences, companies can increase their access to first-party data while surviving, and even thriving, in an era of increased data regulation. A better experience leads to better data, and better data leads to even better experiences, creating a win-win scenario for consumers and marketers alike.

Regulation Likely Won’t End with the CCPA

The CCPA is a consumer-friendly step toward better data regulation privacy protection, but it likely won’t be the end of new data privacy laws—and that could create headaches for businesses.

With the CCPA only providing protections to California-based consumers, other states are looking at their own legislation that would enact similar regulations to protect their citizens. Those state laws could carry different requirements for businesses to follow, creating a maze of regulations that makes compliance with every privacy act nearly impossible for companies to implement.

Meanwhile, Ars Technica reports that the federal government may consider its own consumer privacy regulations. Federal involvement could, in theory, help standardize these laws across state lines and provide consistent guidelines for businesses to follow. While no federal regulatory framework is imminent, the continued calls for data regulation will ensure that the CCPA is only the start of data management reforms in the US.

Given the prospect of increased regulation in the near future, brands shouldn’t settle for doing the bare minimum when meeting the letter of these CCPA laws. An earnest attempt to embrace consumer data transparency will benefit your company on several different fronts, getting ahead of upcoming legislation and improving the quality of your marketing data, all while providing a better brand experience to customers.

The CCPA may present new challenges for marketers, but it’s far from a doomsday scenario. In fact, many businesses will be pleasantly surprised to learn that when they scrap their dirty data of old, what they’re left with is better, more reliable data and smarter brand marketing campaigns. The impetus may be coming from new government regulations, but don’t let that fool you: The CCPA is going to be good news for your marketing department.

Stay up to date on all things CCPA. Get the latest updates, resources, and guides.

Jonathan Crowl

Jebbit Grid Decorative
Jebbit Grid Decorative
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