Ethics Alert Series

Privacy: It's About the Data!

By Lisa Shosteck

Data and privacy. This ethics update focuses on where data privacy intersects an evolving landscape of shifts in consumer expectations, technology providers' practices and regulatory focus. We spotlight the trends in the industry and tools and guidance for developing a data privacy plan.

BACKGROUND:

As you may know — January 28th marked Data Privacy Day. Of course, if you're dealing with marketing and data — every day is really Data Privacy Day. While data and privacy are top of mind — it is a great opportunity to survey the landscape and review and update your data privacy practices as needed. You might need to pivot your practices and policy to meet any new legal, regulatory, or technological requirements and/or consumer expectations. The privacy landscape is complex and evolving, and it can be challenging to meet these sometimes-varying perspectives.

We have all heard from consumers, and in turn regulators, that we as an industry need to be doing more to "protect" and honor consumer privacy. Industry has taken notice. According to the Cisco 2022 Data Privacy Benchmark Study, "privacy has become more important to buying processes, management metrics and employee responsibilities." Highlights provided below:

  • Cisco's 2022 Data Privacy Benchmark Study surveyed more than 4,900 professionals across 27 geographies. It finds that 90 percent of respondents consider privacy a business imperative.
  • Organizations continue to invest in privacy and estimate return on investment at nearly 1.8 times spending on average.
  • Privacy legislation worldwide has been well received with 83 percent seeing a positive impact.
  • Customers want more transparency and are concerned about the use of data in Artificial Intelligence (AI) and automated decision making.

It is a bit of a catch-22 though — consumers want greater protection in data privacy, yet also want more relevant and personalized offers. In a recent Airship Survey, nearly two-thirds of consumers use retailers' apps in-store to meld digital and physical experiences to access loyalty cards, coupons, scan QR codes and more personalized experiences.

It is also interesting to note how the pandemic affected online shopping which broke down barriers to adoption by older generations and made online shopping the go-to method for everyone for its convenience of virtually any product or service. A study by Digital Commerce 360, found that top companies generated $849.5 billion in online sales in 2020, a 45.3% jump from 2006. Consumers also stepped-up efforts in endorsing shopping small and local which, again, enforces the need for personalized and relevant offers to consumers.

RECENT EXAMPLES:

While marketers want to bring personalized offers to consumers' fingertips, marketers also need to be kept abreast of shifting privacy strategies by technology providers and regulators. Carefully review these recent examples, as you plan and implement your data privacy practices.

  • Apple Changes its Mail Privacy Protection (MPP) Features:
    One of the greatest impacts in 2021, was the move by Apple in its iOS15 privacy update to shift its settings to hide users' IP addresses. This has greatly impacted the marketer's ability to track email engagement (rendering metrics like open rates and click-to-open rates virtually useless). 97% of Apple users who have downloaded iOS15 have opted in to MPP, and this number is certain to rise as more users download the update. This shift in strategy has left marketers a challenge and opportunity to reach, engage and expand its customers in new ways.
  • Expiration of Third-Party Cookies:
    Google announced that by the end of the year it will end third party cookie tracking. Most recently Google announced its plans for a new way to anonymously group people by Topics. Instead of placing users into cohorts (as previously announced FLoC), it will assign users to five areas of interest, or topics, every week, depending on the user's browsing history. This shift in strategy also provides marketers with challenges and opportunities to secure first party data, customer data.
  • FTC Warns Users to Opt-out of Targeted Advertising on Social Media:
    According to the Federal Trade Commission, in 2021 consumers lost approximately $770 million due to fraud on social media with more than 1 in 4 people reporting losing money to fraud which started on social media. The leading scams involved online dating schemes to bilk unsuspecting people out of gift cards and imposter companies misleading consumers into paying for merchandise that was never delivered. The FTC is gearing up to pass privacy rules which may include further restrictions on online advertising and/or social media.

With these examples in mind, marketers need to carefully examine their practices, armed with knowledge of consumer expectations and a shifting privacy landscape, gather your team together to ensure you are staying ahead of the privacy curve. You want to make sure you are employing best practices with regards to data and privacy.

RULES, TOOLS & GUIDES:

Responsible marketers and regulators have come forward over the years to develop key guideposts to protect data including:

Please review these online privacy policies for examples from companies who are providing consumers with information and choices on its data privacy practices:

  • Gap Inc.: includes nine main components of its information practices and the second component covers: "Your Right to Control How Your Personal Information is Used" — the company makes it very accessible for the consumer to contact the company with its marketing preferences.
  • TD Bank: pop-up is displayed upon entering site: "Ad Choices & Personalization". It also lists as item #2 on its privacy policy: "Marketing Preferences".

  • Anthem: includes easy-to-find and accessible contact information for a consumer to reach the provider directly (email and mailing address, toll-free number to be placed on Anthem's Do Not Call list, webpage to opt-out of first-party cookie tracking, and other avenues (i.e., NAI's third-party cookie opt-out website).

CONCLUSION AND RECOMMENDATIONS:

It's quite the challenge — how do you address privacy concerns while providing consumers with personalized and relevant marketing offers? The core of this resides in building brand and consumer trust. Let's get back to basics and address the real data privacy concerns. When is the last time your company has completed a data privacy audit? We recommend you do so on at least an annual basis, and it really is a team effort. Be sure to involve IT, Legal, Marketing, Training, Lead Channel Teams (Mail, Digital, Telemarketing), Data Base Teams. Here are the key elements to review and incorporate:

  • Specify Data: share what data you are collecting and for what purpose.
  • Third Party Sharing: inform consumers if you are sharing data and for what purpose.
  • Protect Data: provide what steps you are taking to properly secure and protect the data (physical safeguards, proper training of staff).
  • Minimize Data: ensure that you are only collecting the minimum amount of data for a specific purpose and for the minimum amount of time needed.
  • Clean Data: subscribe to ANA's DMAchoice and Deceased Do Not Contact lists — to remove unresponsive and deceased individuals from your prospect mailings.
  • Choices: provide consumers an easy and effective way to communicate their marketing preferences, to access and correct data, and limit sharing.
  • Provide Proper Notice: of your information collection, sharing practices and choices available to consumers.
  • Take Action: For questions/comments, please contact the Ethics team at ethics@ana.net, or to report a potential ethical or legal violation, please submit the information via this complaint form.

If you have questions or want to get more involved in marketing and ethics, please contact ethics@ana.net. We look forward to working with you in our shared efforts to ensure good business practices, consumer protection in the marketplace, and consumer trust by providing accountability.

Lisa Brown Shosteck | ANA Center for Ethical Marketing

Source

"Privacy: It's About the Data!" ANA, 2022.