The Reckoning on Digital Privacy and Data Is Here
By Jonathan Lacoste | 4.29.18
For much of the population, the Cambridge Analytica leak was, if not a first introduction to the challenges around digital privacy and data, then perhaps an abrupt reminder. But for many of us in the marketing and technology space, the story felt like more of the same than something brand new.
Marketers’ best intentions of delivering relevant, right-place, right-time advertising have led to eroding consumer confidence.
Recent news that Facebook is removing ad targeting from third-party data vendors should not come as a shock, but instead should be welcomed with a round of applause. It’s the sign of a reckoning — one that’s necessary to regain consumer trust in a new era of digital privacy and data use.
It’s (almost always) all about the data
Historically, data vendors have most often aggregated unrelated sources to compile third-party data sets. To do this, they pull in readily available information like home addresses, voter registrations, birth dates, and credit scores, and combine that with data inferred from cookies, such as online browsing, click trails, and searches.
But that data doesn’t always tell a complete — or accurate — story. A Deloitte consumer survey underscores this: The majority of respondents say the third-party data tied to their profile was consistently less than 50 percent correct. Another recent study revealed that more Americans are concerned about data privacy than their income. It should come as no surprise, then that 66 percent of Americans want companies to be more transparent about how their data is used.
Because third-party data comes from an entity without a direct relationship with consumers, it’s the single biggest offender. And the potential implications for marketers are only going to mount.
Cambridge Analytica and GDPR are one and the same
On May 25, Europe will enact the General Data Protection Regulations (GDPR) Act, which will have big implications for how brands, even here in the United States, can market to consumers.
New “data rights,” such as the right to be forgotten and the right to give consent before an organization can use an E.U. citizen’s data, will bring forward new challenges to how companies sell and advertise their products.
How did we get to the point of legislation?
As marketers, we need to take a hard look in the mirror. In the name of better personalizing experiences for our customers, we’ve gobbled up trillions of data points, sometimes with very little regard for their accuracy, relevance, or how they were collected.
The personalization versus privacy paradox
The demand for all that consumer data didn’t simply magically materialize. To be fair, we’ve only been following our customers’ lead.
According to a major analyst firm’s research, more than 75% of consumers expect personalization on digital channels from brands. The rush to personalization was to meet a market need.
But for every perfectly placed “right time, right product” marketing message, as consumers ourselves we can recall many more messages for products we were never interested in, or had already purchased — maybe even for a friend or relative. That’s why 60 percent of those same consumers now express privacy concerns over how their mobile and online behavior is tracked.
So, what went wrong? Many brands never asked for the consumer’s consent to their data; they just bought it. And when that data was activated in a marketing campaign, it led to some pretty impersonal personalization.
A way forward: Declared Data
The new approach to customer data must focus less on what data you can buy or how you can apply that to a marketing message, and instead on one seemingly basic question: “If you could have a conversation with any customer, what would you ask?” Because, believe it or not, when brands are providing value to them, customers actually want to share their motivations, interests, intentions, preferences, and more. This is declared data — a type of first-party data that has been willingly and explicitly shared by an individual consumer, often about those motivations, intentions, interests, and preferences.
The output of those conversations (which we as marketers somewhat crudely call data) is the path that leads to true personalization — and is the detour from “creepy advertising” that consumers loathe. And because it is given explicitly, when that data is activated, it increases both conversion and brand affinity.
In a post–Cambridge Analytica and soon-to-be GDPR world, Declared Data is the way forward for marketers.
I challenge us all to...
Stop enabling these breaches of consumer trust by blindly buying data;
Bring data capture and activation out into the open; and,
Give consumers a voice in how their data is used.
So, as marketers, it’s time to be mindful of how we collect and activate data. It’s time to do it through earning attention and gaining back consumer trust.
If we don't, #DeleteFacebook and movements like it will rightfully persist. If we do, we can earn consumers’ attention and trust once again. It’s on us to do better.
About the Author
Jonathan Lacoste is cofounder and president of Jebbit, an enterprise software company that focuses on mobile marketing and consumer data. He writes frequently about digital technologies, marketing trends, and startups. Jonathan has been named to Forbes's 30 under 30 list and in his spare time, runs marathons globally.
Find Jonathan at @lacostejonathan