Research: Marketers Aim to Balance Thirst for First-Party Data & Customer Privacy

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Customer identity and data privacy are at the core of every marketing strategy, driving everything brands are doing with marketing data — from social media marketing to in-store email collection. The 360-degree customer experience demands more sophisticated data management and data privacy is a front-and-center priority,  especially now that data privacy legislation reminiscent of GDPR looms in the U.S. in 2020, starting with California next year and possibly moving state-by-state from then on.

GDPR ensured any brands marketing to E.U. citizens adhered to new data privacy rules — including removing consumers’ data from marketing lists when requested or when GDPR non-compliant. That caused marketers to make sure they knew the source of their data and that consumers had opted in to have that data used for marketing purposes.

At the same time that brands are being expected to have pristine data that adheres to customer preferences in all of their marketing, they’re seeing a glut of information. For example, according to the Salesforce “State of Marketing Report” announced in December 2018: “The median number of data sources is projected to jump from 10 in 2017 to 15 in 2019 — a 50% increase in just two years.”

As a result, organizations are investing in martech that helps them manage all of it, as well as the data privacy concerns. That’s where customer identity comes in, managed by customer data platforms (CDPs) and CRM systems. If all goes well with brand efforts, the customer experience is so smooth the data management isn’t even noticeable to customers.

Marketing Trend: Investing in Customer Identity Tools

Marketers and agencies are moving data collection in-house, making it first-party, opt-in. That trend is the result of increasing pressure from “walled gardens,” like Facebook, not releasing data and keeping lists to themselves, as well as rising pressure to ensure third-party data adheres to upcoming privacy regulations.

Research released on Jan. 17, 2019, by the Winterberry Group states: “Cambridge Analytica and [Facebook] shook up the privacy landscape at the end of Q1, while GDPR went into effect at the end of May and California passed a flawed privacy directive in June, leading to calls for national regulation by 4Q18.”

The study finds most marketers, 60 percent, “believe that CRM databases are the most important tools in supporting identity-related efforts.” And brands working on identity solutions are trying to ensure that their resources “support persistent recognition of audience members across devices and other promotional and transactional touchpoints.”

Winterberry says mid-market solutions that are on the rise are CDPs, which 49 percent of marketers are using and 39 percent plan to add in the next two years. These add to the marketing stack and can combine “CRM/digital data capabilities with applications.”

While CDPs are great for enabling real-time data use by marketers, their suppliers are struggling to figure out where CDPs fit in the marketing mix, finds Winterberry.

Heather Fletcher is a freelance reporter for Adweek. She covers performance and direct marketing.