Data Privacy and Marketing – What You Need to Know
Data breaches, data abuse and consumer concerns. After decades of intrusive cookies, ads following consumers all over the internet and a wealth of new data created every day, governments, tech companies and consumers alike are taking fresh looks at data privacy and the rights of consumers to protect their personal information.
Data privacy and marketing – one privacy expert noted, the problem isn’t that there’s data about you. The problem is that you don’t have control over it.
How big is this issue? According to NextGov, 2.5 quintillion bytes of data are produced every day.
Data privacy transparency — a top priority
Large scale data breaches like what occurred at Equifax and Clixsense exposed key personal data for millions of people. A Cisco study found that more than 50% of consumers would switch companies because of perceived bad data policies or data sharing practices.
That’s sobering news for digital marketers.
Digital advertising and marketing – Many companies use ad tech stacks to digitally stalk customers and prospects. MARTECH typical applications in the past include these outcomes:
- Tracks your location
- Analyzes your browsing history
- Examines the way you scroll (tracks your eyeballs)
- Records how you pass personal information to third parties
- Follows you around on the internet with targeted ads (IP targeting)
Today, this is all changing on many fronts. International, national and state legislation and emerging regulations threaten many typical digital marketing (and data miners). As reported by the Wall Street Journal, Google got hit in June with a formal antitrust probe for its use of competitor-crushing ad tech. This follows on legal probes and investigations from state governments and other international regulatory entities.
While many like digital “personalization” trends, consumers also regularly express growing reservations with how their personal information is gathered and used. One can’t have personalization without personal information, so it’s a grown quandary.
Today’s situation reminds one of the popular Futurama animated TV series. In one episode, a cute little toad appears to be an innocent pet. As it becomes integrated into society, it turns out to be a “hypnotoad,” possessing powers to enslave and require obedience (“All glory to the hypnotoad”).
As digital ads – pre- and post-cookie – follow consumers around on the internet hawking their wares, do they actually result in marketing and sales conversions? Or just get creepy and annoying?
As the saying goes, business moves at the speed of trust. Earlier this year, the annual global Edelman Trust Barometer came out. This is the standard report on measuring reputation, credibility and of course, trust. Edelman has been doing this for 20 plus years. This exhaustive 2021 report, based on 33,000 responses from C-level executives in 28 countries, showed an alarming state. The report basically declared information bankruptcy. Trust levels in government and media are at all-time lows.
Privacy issues figure into this and are directly affected. If people don’t trust the entity requesting or handling their data, they won’t participate. Without data, updated data and more data, many marketing programs all but collapse.
That’s in part why cookies are going away in a hurry. There are the 20 percent of so-called data nihilists who so they don’t care about their privacy. But that leaves 80 percent of people who DO CARE.
An important note: building trust through transparency is not a quick process.
More companies will invest in privacy technology. Here are some key emerging trends:
Companies will have to do more with less for privacy protection.
Work at Home issues resulted in higher costs to scale and protection operations. 65% of businesses reported higher compliance costs. More than 80 percent of business leaders say they’re being pressured to lower costs.
New market for personal privacy control apps
EYEO, the company that makes AdBlock, launched new product called “CRUMBS.” It blocks third-party cookies and shields users’ IP and email addresses from marketing software. Crumbs has a dashboard that will allow users to decide what data to share.
As Crumbs’ CEO noted: “the way the web is set up, with advertisers tracking users and using third-party cookies to gather information to finance the creation of online content is no longer a viable option. This is because it is, 1. going to be obsolete with said new legislation, and 2. because users are becoming ever more privacy aware and demand changes.”
iLocal and other major newspaper/media databases will be affected. Databases offering major consumer behavior data exist all over.
A Short Summary of Data Issues
Following are some summaries of key data issues (discussed at the Indianapolis Cybersecurity Conference on June 23, 2021)
EEA cross-border transfers. Hopefully agreement can be reached on this critical issue. EU demolished Privacy Shield in 2020.
General Data Protection Regulation (GDPR)
California Consumer Privacy Act (CCPA)
And more to come.
2021 – 10% of world’s population has personal information covered under privacy regulation
2023 – 65% of world’s population has personal information covered under privacy regulation
China – TikTok issues forced China to create and adopt a new data security initiative, which China wants as a global standard for data security
Probably soon see federal privacy laws as well as additional state privacy laws.
FTC investigations into privacy issues and alleged violations will increase under Biden Administration.
With demise of cookies, where web sites place intrusive code on customer or visitor properties, we’ll see the development of alternate marketing strategies. Quantification of performance is going to change. More reliance on customer opt-in, contextual behavioral advertising, and other developments as privacy laws further erode traditional tracking and targeting approaches.
Can’t achieve omni-channel marketing personalization without data, which means customers have to trust organizations to provide data.
Salesforce and other marketing/sales automation software can’t perform or operate without solid data.
Firefox and Safari already have phased out third-party cookies, Chrome following.
Google introduced the Privacy Sandbox. Marketers can still do behavorial targeting in a cookie-free environment. Cornerstone of Google’s Privacy Sandbox will be a giant AI/machine-learning model called Federated Learning of Cohorts (FLOC). Groups users and anonymizes data based on interests and demographics.
Apple and Facebook are fighting. iOS update requires apps to ask user’s permission to track them across the web and other apps.
Third party risk management will receive greater attention in 2021 and beyond. Includes supply chains, manufacturers, staffing companies, IT support services. Only some 35% of companies presently consider their 3rd party risk management to be fully effective.
Data breaches typically cost an average of $700,000 more when 3rd party is involved. Some 63% of data breaches are attributed to third parties!
Want to know more? Contact Michael Snyder.
