User Privacy and Regulation

The Fifth Driver of Change in the Marketing Landscape

Looming legislation and regulation will impact user privacy laws and forever alter the marketing landscape.

In part five of our series on the changing landscape of marketing, we discuss potential new privacy laws, how those laws will impact marketing, and what brands should be doing now to prepare for the future.

LIFE IN THE DATA WILD WEST

The sheer volume of personal data that is collected online would shock the average consumer. It amounts to a virtual, digital self.

This article in Wired details the ways users’ online movements are tracked: cookies, super cookies, fingerprinters, identity trackers, session cookies, and on and on. After reading it, the average consumer might think, “This is creepy. Really creepy.” And yet this is how the sausage is made in the world of digital marketing.

To make matters worse, every day brings the latest shocking revelation about a social media platform sharing its users’ data without their consent. Every day brings news that a giant retailer’s database of consumers’ financial data has been compromised. Every day we learn about a new app that has been secretly selling its users’ personal health information to mysterious third parties.

This status quo is unsustainable. Soon the government will step in and pass sweeping new consumer privacy laws, break up the big tech giants, or both.

What does this mean for brands whose marketing relies on targeted digital advertising? It means they need to harness, leverage, and curate their own primary data for their marketing.

What Changed for Brands and Consumers?

Consumers, and the brands that rely on consumer data for their marketing efforts, should welcome the user privacy regulations that are surely in our future. But before considering how these changes will affect marketing, it’s important to look back at the conditions that got us here in the first place.

1). Walled Gardens and Ad Fraud

As Jaron Lanier, internet visionary and virtual reality pioneer, tells the story of how we got here, the crucial moment came back in the 1990s, when tech companies decided to make their platforms and products “free.” But as the saying goes, if you’re not paying for something, then you are the product. In this case, the “product” is our personal data, which tech companies sell to media buyers, advertisers, and shady third parties, such as Cambridge Analytica, in order to fund the growth of Google, Facebook, Amazon, and other tech Goliaths.

Why does this matter to brands and how they market? Because when you advertise or sell on almost any tech platform, the platforms control access to consumer data, as well as the performance metrics. This is what is known as a “walled garden.” If a brand advertises on Facebook, the brand is essentially renting a small portion of the relevant user data that Facebook owns. And because Facebook also controls access to performance metrics, a brand has to trust that what Facebook reports back to them is accurate.

These closed ecosystems, which also include popular e-commerce, CRM, and sales software such as Shopify and HubSpot, are essentially permission slips for ad fraud, which is why many huge brands and conglomerates have been urging their own internal marketing teams to decrease their reliance on walled gardens.

2). Hacks and Consumer Backlash

In 2019 alone, hackers breached more than 8 billion consumer records. That’s billion, with a “b.” Here is just a short list of the major hacks in 2019: 11.9 million records from Quest Diagnostics, 100 million from Capital One, and 49 million from Houzz.

Why should brands and marketers care about this sad state of affairs? Why is this anything other than a cyber security concern?

The first reason is because consumers lose trust in brands that are not responsible with their data. A report by Deloitte found that 80 percent of consumers believe that they no longer have control over their own personal data, 31 percent of consumers have deleted apps that they feel put their personal data at risk, and 27 percent of consumers avoid shopping on websites that don’t handle user data responsibly.

The second reason brands and marketers should care is that these individual hacks will begin to build into a wave of consumer backlash that will cause federal and state regulators to act, and the new laws will fundamentally change how brands market—that’s not to mention how new antitrust actions could affect the tech platforms that most brands rely on for consumer engagement and sales.

Eighty percent of consumers believe that they no longer have control over their own personal data.

3). An Increasing Need for New Regulations

There are growing calls from both sides of the political spectrum to break up the big tech companies. If these movements succeed—if Facebook was forced to split off Instagram, for example—then the marketing landscape would be dramatically altered.

A more likely compromise is something that looks like the EU’s General Data Protection Regulation (GDPR), which demands that platforms receive continuing, active consent from users, not just a single, one-time agreement to a terms-of-service statement that most consumers never read because they are too long and too complicated.

Other portions of the GDPR will dramatically impact data collection methods and marketers’ access to user data, as well as how they target consumers with that data: no more behavioral data gathering, no more using algorithms to drive targeting, no more walled gardens, i.e., all user data must be “portable.” Beyond that, the GDPR also gives consumers the right to alter or erase personal data that is held by a platform or brand, and it prohibits companies from gathering data on sensitive categories, such as data about health, race, ethnicity, political opinions, and religious beliefs.

There are many theories about how this may translate to the US when this level of regulation comes to our shores. But for many brands, the simple reality is this: you need to start preparing now, because these changes are coming.

How [B]RIGHT Can Help

When these new regulations are enacted, whether in the form of the breakup of big tech companies or legislation similar to the GDPR, the marketing landscape will look a lot like the landscape back in 2010, when brands had to do all the hard work of understanding their audiences without the help of analytics from Google or Facebook.

Thankfully, the team at [B]RIGHT Brand Performance Group is prepared for this future:

1). Curating and Activating Primary Data

How would brands go about curating their own internal consumer data after years of outsourcing it? Website visitor data would once again become all-important. Lead-gen campaigns would become the central method that brands use to collect information about their consumers.

Owned media would also become a primary focus. [B]RIGHT already helps our clients activate all these data strategies through our New Business Development service.

2). Flexible, Data-Informed Tactics

Consent-based activation tactics like email campaigns could once again become the primary way brands get in front of their consumers. These are tactics [B]RIGHT already employs, because using a brand’s in-house primary data to target existing consumers is much less likely to result in waste or fraud.

Plus, we can help brands add to that primary data through an ongoing, automated process that targets customers based on not just their email address and name, but also based on their browsing path, purchase history, and customer journey stage.

3). Channel Expertise

In this new world, brands will turn to marketers who offer channel-specific expertise instead of do-it-all, one-stop marketing shops. And this is exactly the model that [B]RIGHT was built to take advantage of: creating custom, channel-specific (or cross-channel and multichannel) strategies that get our clients results.

Gone is the way of the generalist, because a general approach will only produce average results. Specialists create extraordinary, high-performing results.

Is your brand planning for a more regulated future? How will changes in privacy laws affect your digital marketing efforts? Is your brand already curating its own set of primary customer data?

If you answered “no” to any of these questions, then give [B]RIGHT a call, and we can start planning for this new future together.

Read part six, on brand (dis)loyalty, of our series on the changing landscape of marketing.