Privacy is changing the marketing data landscape
The topic of internet privacy and data transparency has been heating up over the past year. With Europe’s GDPR regulations and state-level privacy acts such as California’s CCPA, Big Tech has begun what will be a seismic shift in how marketers collect and use data. Apple recently introduced the AppTrackingTransparency framework within iOS 14 that requires app developers to request explicit permission from users to track them, and just last week Google announced that its ad tools would stop support of tracking individual users across websites starting in 2022. This is an extension of their initial announcement last year that they plan to stop supporting third-party cookies, a key system for user tracking and targeting. As these privacy changes continue to shift the marketing data landscape, marketers will be forced to find new ways to acquire data in a way that builds trust with consumers.
Brands have a big opportunity
While the digital advertising community has been focused on how these privacy-related announcements over the past year will limit brands’ ability to target and engage customers, there’s a real opportunity in all of this that will have a lasting impact on customer relationships. While third-party data has offered powerful ways to target and acquire consumers at scale, some brands have become too reliant on the technology and have lost focus on building more authentic customer relationships. Big Tech is now, in many ways, changing the game and allowing brands to compete on the basis of true engagement and real relationships instead of buying and leveraging third-party tracking data—a modern-day (and sometimes creepy) “spray and pray” approach.
In this new world, brands who are focused on earning their data will reign supreme. Creating experiences that introduce engaging ways for customers to provide their own personal data (zero-party data) not only ensures compliance with regulators but strengthens the bond with those customers. The key for brands will come down to the experience and the value exchange. Recent research from Econsultancy and Cheetah Digital revealed that 90% of consumers will share their preference data so long as a fair value exchange is offered. As part of this value exchange, it’s critical to not only collect the data, but also leverage it in ways that provides increased perceived value to the customer—be it through a more tailored experience, more personalized communications, or more relevant offers.
Begin earning your data
As brands accelerate efforts around capturing zero-party data, there are four key areas to consider when building strategies:
It starts by committing to a seamless CX. According to the eMarketer research, of consumers’ favorite brands that communicate with them frequently, 90% believe that the brand “provides a consistent experience, regardless of where they interact with it.” These digital experiences are the space within which brands engage customers and present a value exchange for their information. It’s critical that the digital ecosystem is seamless and consistent to provide the best opportunity to effectively capture the data.
Establish a clear value-exchange with customers. A clear value exchange is the cornerstone of an effective zero-party data program. These programs can manifest themselves as a CRM strategy, providing a way for customers to engage with a brand directly through personalized experiences, communications and offers, or through a more formal loyalty program, by offering currency and rewards for their transactional and self-reported preference data. Regardless of the strategy or structure that best fits the brand, the value exchange must be clear. According to the recent eMarketer research, consumers find the following five benefits highly valuable in return for providing their personal information:
- Discounts or coupons (53%)
- Loyalty points/rewards (46%)
- A chance to win something (33%)
- Early or exclusive access (30%)
- Unlocking content (18%)
Build zero-party data in engaging ways. There are so many unique and engaging ways to collect customer preference data, and the days of the traditional form are quickly drifting to the rear-view. From polls and quizzes to games and surveys, using creative ways to collect data makes customers feel engaged and builds a deeper connection. Mobile apps are also a significant component of this data collection eco-system, and can offer convenient ways for consumers to provide zero-party data. One note of caution—brands should focus on collecting only the data they plan to act on. Collecting data for the sake of collecting data can decrease conversion rates and leave customers asking why the information is necessary.
Enable stronger preference centers. One key element to building trust with customers is ensuring that they have the ability to access and update the information they provide. Robust preference and privacy centers offer benefits not only to customers who want control over the data they are providing, but also to the brands. Companies who offer flexibility in how they engage their customers, be it channel preferences, the cadence of communications, or personalization information will have a better chance at keeping customers engaged and opted in.
The playing field is changing for brands, and the dust has not yet settled. There’s only one certainty: data privacy will continue to impact the way brands acquire, convert, engage and retain customers. To take control of their destiny, brands must concentrate on earning zero-party data and building personal relationships with their customers. Those who focus on earning their data will find success through increased engagement, trust, and ultimately, loyalty.