Data Privacy and Personalization: Is Your Marketing Future Proof?
The New Era of Digital
Welcome to the new era of data privacy, regulation and a cookie-less future. As we approach the many changes impacting digital marketing, marketers can embrace new technology solutions and create better, more personalized experiences for their customers. The Digital Age is giving way to a machine learning revolution. However, many of these models are not new, they are simply becoming more mainstream. As consumers become more aware and educated about how publishers and advertisers use their data, the digital ecosystem becomes more complex. This, in turn, gives rise to new technology, regulation, and transparency. Marketers looking to stay ahead must continue the education process around data privacy while also embracing new technologies and adopting fresh approaches to marketing and advertising.
New Technology
Since the beginning of the internet, companies have been collecting, storing, analyzing, and activating user data. Third party cookies have played a large role in this process. However, popular browsers like Firefox and Safari have retired the use of these snippets of code that store user data, and Google's Chrome is not far behind. Similarly, Apple's App Tracking Transparency has had a large effect on publishers like Facebook and advertisers, big and small. Also, in recent years, the data collection process has grown in sophistication as businesses invest in marketing technology such as customer relationship management software (CRM) like Salesforce and data management platforms (DMPs) like BlueKai and Customer Data Platforms (CDPs) like Segment. New entrants to the advertising technology industry also offer tools for creating a personal relationship with customers in an AI-driven world.
Oversight, Regulation, and Transparency
In the past few years, data privacy concerns have become mainstream. Facebook's Cambridge Analytica and other similar scandals, combined with high profile security breaches and hacks have led to increased attention and oversight by governing bodies and regulators. Most notable, GDPR and CCPA were rolled out by the European Union and the State of California, respectively, and have led the way for additional regulations to follow.
While the United States does not currently have federal regulation over data privacy, there are several states following California's lead and have either passed legislation or are in process. Notably, 7 states including Virginia, Utah and Colorado, have enacted comprehensive privacy laws at the state level, with many more pushing active bills through the process. Consumer rights such as the right to access, correct, delete, and opt out are at the top of the agenda. While business obligations such as required transparency notices, risk assessments, and prohibition on discrimination are also important factors.
Additionally, the use of third-party cookies in browsers is becoming obsolete and will essentially end in 2024, when Chrome officially retires them (although that date has been moved back several times). Apple's sweeping changes to how they handle user privacy have also caused waves. Essentially, their App Tracking Transparency allows users to choose whether an app can track their activity across other apps and websites. Furthermore, users with child accounts or those managed by an educational or business account may not be tracked. Not surprisingly, this has affected advertisers, data brokers and publishers in their ability to collect data. Apple has taken the position that users want transparency and control over how their personal data is handled but advertisers see things differently. For businesses reliant on digital advertising, the deprecation of third-party cookies and ATT represent the loss of certain targeting capabilities such as lookalike audience modeling and retargeting. Consequently, this can be equivalent to loss of engagement, interaction, leads and ultimately sales.
Data Landscape
Along with this evolving data privacy ecosystem comes challenges as well as opportunities. Brands must keep their customers at the center of everything, as they navigate changes related to data privacy, regulations, and transparency in the world of technology and marketing. Marketers must be aware of this evolution so they can continuously adjust their approach to data and privacy for their stakeholders.
While companies and marketers have traditionally relied on first, second- and third-party data sources in the past, a new era is upon us where zero party – or ethically sourced – data is moving to the forefront. Third party data, that which has been purchased typically through a broker like Acxiom, Experian, CoreLogic or Oracle. In recent years, purchasing third party data has become an outdated and ineffective practice. Similarly, second party data which has been obtained through partners or affiliates, has begun to fall by the wayside. That leaves the coveted first party data source.
First party data, that which is obtained directly from users typically through marketing, can include websites, mobile apps, email, SMS, point of sale, beacons, call centers, live events, and more. Although first party data has been an integral part of an overall marketing strategy, there are numerous challenges associated with it. Challenges include the ability to collect, store, and analyze the data but also the ability to resolve identity and profile information in order to make the data actionable. Further, many users are not aware that their data is being collected and are quick to opt out or unsubscribe as quickly as possible. Similarly, many users have become more educated and thus more untrusting leading them to give fake information or create fake profiles, thus gaming the first party data system.
Fresh Approaches to Marketing
Although many businesses still rely on first, second-, and third-party data, another type of data has emerged. Zero party data (ZPD) represents data that users have willingly and knowingly shared with brands, usually in exchange for something they value. ZPD provides an opportunity for brands to build an authentic and valuable connection with customers. Rather than deceptive techniques that force users to share their data, with zero party data, customers know their data is being collected and they agree to it in exchange for something of value. Value can be created in many ways. For example, custom quizzes to create personalized product or promotional experiences are an important mechanism for increasing brand loyalty. When customers feel their voices are being heard and have influence on their involvement with a brand, they are more likely to become repeat customers and ambassadors.
In fact, companies like Jebbit specialize in creating uniquely personalized experiences meant to help businesses build their zero-party data. These experiences can come in the form of engaging quizzes, polls, and surveys as well as enhanced forms and content opportunities. Often referred to as micro-experiences, these opportunities help build rapport with customers craving a more personalized experience with brands they like or admire. Companies like Gillette and PepsiCo are focusing on building their zero-party databases while leveraging best in class technology tools to leverage data in a more efficient and effective way. For example, a running shoe company can offer an interactive quiz for women joggers to then deliver customized product recommendations that can be saved and shared. Quizzes and polls can run within ads on popular social media sites like Instagram and Facebook or within an email campaign. This offers customers with an interesting and fun interaction with a brand while allowing the brand to capture relevant and useful data in an open and transparent way.
Zero party data offers brand the opportunity to authentically build a dialogue with customers who truly want and value that connection. Marketers who stay educated on the latest data privacy changes, including regulations and transparency, can stay ahead of the curve by building new and fresh approaches to their marketing strategies.
Kelly Cutler is Program Director at Northwestern University Medill School.
The views and opinions expressed in Industry Insights are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.