Advertisers Can do More to Respect Customer Data Privacy

In this free-wheeling era of data collection, Clive Humbly's now infamous "data is the new oil" quote continues to ring true for many marketers.  Data privacy, however, has become an increasingly hot-button issue, made more high-profile by security breaches at companies like Equifax and Yahoo, as well as misuse of data provided by social networks like Facebook.  Advertisers have championed the use of data to offer more relevant products, services, and ads to our customers, but this usage has created some backlash.  Big tech companies are coming under fire from governmental agencies for data collection practices and the public doesn’t have warm and fuzzy feelings toward the issue either.  So what can marketers do?  How can we responsibly use consumer data and respect data privacy going forward?  Let’s dig in.

 

How does the public feel about data privacy?   

In order to even begin tackling the data privacy issue, we need to better understand how consumers themselves feel about it.  According to a recent Gigya survey, 68% of consumers don’t trust that brands will protect their data, and many don’t believe that brands are forthcoming with their data collection and usage practices.

Facebook has recently gotten into hot water overseas due to this very issue.  It’s no secret that Facebook collects plenty of user data, but consumers might be surprised to hear that Facebook goes so far as to tap into Instagram and Whatsapp, both under the Facebook umbrella, to collect user activity and browsing histories.  The Federal Cartel Office of Germany is now calling Facebook to task over these practices, claiming that Facebook is abusing its power and that users are unaware of what data is collected and how it’s used.

Interestingly, Deloitte found that younger consumers are more likely than older consumers to express concern with data collection and take steps to proactively limit the data that sites and apps gather.  However, there is some good news for marketers – 79% of survey respondents said they’d share their data with a company if they’d get something of use in return. 

 

How do advertisers and marketers feel about data collection? 

It’s no secret that our industry loves data.  As it becomes (somewhat) easier to reach highly specific audiences with our advertising messages, we’ve turned to data to gain more insight into how our target audiences behave.  From third-party data provided by the platforms where we buy media to the CRM databases created by and for the brands we work with, there is a wealth of available information for marketers to tap into to make our work more relevant.  And that shows no sign of slowing down – advertisers are planning to increase their data streams from 5.4 to 6.2 by 2019, all in an effort to find out more about what consumers want, where they gather, and how to best reach them with useful offers.

There’s no denying that data makes a marketer’s job easier, allowing us to develop ads that are impactful by virtue of knowing our consumers’ interests.  But that begs the question – what responsibility do we and the brands we work for have when it comes to the data we collect?  And how can we increase trust between us and our customers?

 

How we can responsibly use data

Despite the opportunities data gives us as advertisers, we can’t completely ignore the Big Brother aspect of so much behind-the-scenes data collection.  Did you know that Roomba has been mapping customer homes and plans on sharing these GPS maps with other companies?  Or that Target uses your data to figure out if you’re likely to be pregnant, even before your family knows?  It’s cases like these that rightfully have consumers on edge.

As stewards of this data, we need to use it responsibly, which means better communicating what and how information is collected, giving users the ability to choose the data they share with you, and offering something of value in exchange for their information.  By putting your data collection practices into the spotlight, you give your customers the option to control what is collected, which can alleviate some of the concerns they have behind data privacy.  And offering something of value, whether it’s more personalized service, special offers, or free access to a product or service, is an acceptable trade-off for many users. 

Consumers place a value on their data depending on what it will be used for, and usage tends to fall into three main categories:  improving a product or service, creating better ads, or reselling to third parties.  The value of what you offer in exchange must match these tiers in the consumer’s mind, and again, underscores the need for transparency in your data collection policies.  This transparency requires a proactive approach, providing education and outreach to customers versus burying the information on a hard-to-find sub-page of your website.  To avoid a Facebook situation, companies and marketers must work to build transparency into their business model from the outset, not perform damage control once trust has already been breached.

 

 

A new era of data privacy is upon us.  Younger generations have grown up with widespread data collection as the norm, and are wise to the quiet ways that companies gather information.  Advertisers and marketers have the opportunity to change this approach entirely, putting the consumer perspective at the forefront of how and why we collect data.  We can and should do more to promote data education and hygiene.