Data Privacy and Compliance for Marketers Third Wunder

As the digital landscape continues to evolve, the topic of data protection has become increasingly relevant to the field of digital marketing.

We’ve all had that experience where we think about something seemingly random, like pink, bedazzled snake-skin loafers, and then suddenly start seeing ads for those exact shoes popping up on our social media feeds. Yes, the internet is listening, but not in the way you think. In reality, it’s just using our browsing habits to gather information about our interests. Everything is Intel.

Convenience – But at What Cost?

As consumers, who doesn’t love getting ads that are tailored to our interests? It makes browsing the internet so much more enjoyable. And as digital marketers, using hyper-targeting techniques to constantly collect data on consumer behaviour to inform and build our advertising efforts, is a great way to save time and money. In fact, with the world becoming increasingly digital and more of us becoming more permanently plugged-in, it’s important for us to consider the trade-offs of sharing personal information in exchange for more relevant ads.

Remember that with this approach, there’s also a risk of too much information being collected and the potential abuse of personal data. You might have heard of some scary examples from as prominent as the Cambridge Analytica scandal to an incident where Target knew a teenage girl was pregnant before her parents did and sent her coupons for maternity wear. These situations demonstrate some of the potential consequences of overreaching data collection.

The line between customization and privacy invasion is a delicate one.

The goal of data protection is to ensure that people’s personal data is handled in a way that is respectful to our individual rights and minimizes the risk of unauthorized access. To address the growing concern around the prevalent use of personal information, governments have begun to implement their own data protection laws such as the EU’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and the Canadian Anti-SPAM legislation (CASL: pronounced “castle”) that require digital marketers to navigate a complex landscape of regulations in order to effectively reach and engage with their audience.

Data breaches and cyber attacks

Despite these data protection laws, and increased efforts and investments in security, cyber attacks are still a growing problem with several leading companies falling victim to data breaches.

While not quite considered a “data breach” as no systems were infiltrated or hacked, 2018’s Cambridge Analytica scandal saw 50 million Facebook profiles exploited to gain personal data about US voters in an attempt to predict and influence the outcome of the presidential election in favour of the Trump administration.

Desjardin’s high-profile data breach in 2020 occurred when a rogue employee shared sensitive personal information of 4.2 million people with active accounts at the financial cooperative. This resulted in a massive class-action lawsuit against Desjardins and the Superior Court of Quebec approving a whopping $200.9 million dollar settlement.

In recent years, some of the largest, global hospitality brands such as Marriott International, MGM International, Choice Hotels International, and Starwood Hotel & Resorts Worldwide, have been impacted with millions of customer’s personal information (including names, birthdays, contact information) potentially exposed by hackers. The frequency of these sorts of threats and data vulnerabilities further emphasize the necessity for even more stringent measures to secure personal information.

(Third) Party’s Over and the Cookie Has Crumbled

Both security and privacy concerns in the digital space have propelled data protection innovations and actions from Apple, Facebook and Google to keep personal information from falling into the wrong hands.

User’s choice with Apple

Companies like Apple are making it easier for people to take control of their data. As the internet becomes more app-based, every app is required to disclose what data it collects and tracks, allowing users to make informed decisions and consent to their data being shared. Apple’s release of iOS 14.5 requires users to deliberately opt-in or opt-out of sharing their unique Identifier for Advertisers (IDFA), which associates user’s activity and interests with them.

As you can imagine, this information is highly valuable to third parties and their digital marketing campaigns as it allows companies to deliver highly personalized ads. Opting out limits access to this intel and consequently to the effectiveness of digital marketing.

Facebook’s pivot to using first-party data

Thanks to the decline in user tracking by Apple’s move, companies like Facebook that heavily rely on ad revenue from targeted advertising were significantly impacted, with many primarily small-to-medium businesses unable to effectively use Facebook’s advertising features. Having to rethink the foundation of its ads, Facebook is now focusing its efforts on collecting and using first-party data directly from its audience, and implementing more engaging content strategies. The goal is to have people actively seek out information, rather than having information targeted towards people.

Google’s cookie-alternative

Both Facebook and Google have a total of 4.6 billion users. Google announced that it will begin phasing out third-party tracking cookies in 2023, and instead use its own version, the Federated Learning of Cohorts (FLoC) to track users with similar browsing history, predict their interests and determine which personalized ads to send them. An individual’s personal clicks will be tracked less than before.

Other large ad-tech companies like Trade Desk are also developing cookie-alternatives that continue to deliver targeted ads.

The new, ad-free internet

With the rise of ad-blockers and browsers that allow for tracking-blocking such as Brave, Opera or Firefox, privacy has become a key feature of the new internet. Bonus, no ads also means a faster browsing experience!

What Does This Mean for Digital Marketing?

Consumer data has outsized potential, and with these major data privacy changes, comes limited visibility into customers’ online behaviour which makes it harder to know where to target marketing efforts. In other words… How do we give the people what they want when we don’t know what they want? Is it game over? Not quite – not if you’re ready to pivot your marketing strategy.

How can digital marketers continue to market effectively while playing by the rules? The answer is Adaptability

1. Build Trust with your audience

Play the long game. Building trust is an effective strategy as it allows your brand to establish a reputation for providing safe and reliable products and services. Additionally, this will provide you with direct user-centric insights and more reliable, higher-quality data while respecting their privacy.

2. Collect first-party data

First-party data, collected directly from customers is not only crucial to understanding their behaviour and preferences, but is also highly accurate and uniquely targeted to your brand. This includes email lists, gated content sign-ups, contests and subscription or memberships. However, for customers to willingly give you their personal information, a level of trust must be established.

3. Focus on transparency, education and accessibility:

People are more likely to share their data if they understand how it works and are more comfortable sharing their data for a public or personal benefit. As digital marketers, it is your responsibility to educate the public about a brand’s privacy policies, benefits of tracking and data-driven marketing so that they can make informed decisions about opting-in or out.

By engaging with customers directly, marketers gain a better understanding of their privacy concerns, needs and preferences which will help in building better customer experiences and marketing strategies.

Additionally, make privacy policies easy to access, read and understand by keeping them short and simple.

4. Prioritize data privacy

Creating a privacy-safe world is becoming increasingly important as the focus shifts towards first-party data. Media measurement and activation teams will need to employ data compliance expertise and data scientists to ensure data safety, quality and actionability.

5. Optimize marketing budgets

Investing more in adapting to data privacy regulations presents an opportunity to improve targeting methods while maintaining customer privacy. Compliance with data privacy laws can be costly and although penalties for breaking these laws may not be significant, it’s better to be safe and stay ahead of the game.

6. Contextual Marketing

To ensure brands remain strong and relevant in the long term, digital marketing should focus on what makes them them and use modern marketing strategies to drive organic growth. Get creative with impactful content, fine-tune the messaging that communicates what your brand stands for, engage with your target audience more frequently.

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