Data Privacy Is Marketing’s Biggest Challenge: Here’s Why That’s a Good Thing

Recent regulations across the world are forcing brands to get personal again

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Personal data collection is so deeply tied to the consumer’s digital experience that we can hardly imagine one without the other. But this is changing. Apple recently updated how the company handles consumer data, giving each user greater control over who tracks their data, how it can be shared and where that information is used. Similarly, consumer data privacy legislation is changing across the world.

In 2018, leaders in Europe launched the General Data Protection Regulation (GDPR), which required more transparency in how consumer information is collected, used and stored. Also in 2018, the California Consumer Privacy Act (CPA) was created to give consumers more control over their data. Since then, legislators across the United States have worked toward greater regulation of data and greater protection for consumers.

The move toward greater data privacy has only snowballed from these initial efforts. Earlier this year, Virginia passed a new data protection law and became the second state to do so. Now, according to the International Association of Privacy Professionals, there are as many as 21 other states that are actively working toward privacy legislation of their own.

With data collection tied so closely to the consumer experience and the way brands interact with their customers, these regulations are ushering in a new age of digital marketing strategy. Further protection of consumer data will make it more difficult for companies to understand the desires of their customer base, at least in comparison to the third-party data collection practices that are so common today. With these strategies outlawed, or at least made more difficult, digital marketers will need new ways to find customers.

But as privacy concerns increase and create significant challenges for marketers in 2021, there are some silver linings for the industry as a whole.

We’re focusing on the consumer again

Because of these rapidly changing regulations, marketers cannot rely on the data they purchase from third-party sources any longer. Instead, companies must take a more active approach and get to know their customers on a deeper level. This strategy is essential for marketing efforts to stay relevant and effective in today’s changing digital landscape.

While the changes made to data privacy regulation are all done in the name of protecting the consumer’s interests, particularly their privacy, consumers are, at the end of the day, still consumers. They will still be in search of products, services and resources even if their data is not collected through a third party. What’s changing is how and when that data should be collected.

Data privacy regulations such as these neglect one key quality in modern consumers: they still want personalization. According to Accenture, 91% of consumers are more likely to shop with brands that offer them some degree of personalization, whether those offerings are product recommendations or unique experiences. With increasing legislation and governance over consumer data, it will be more difficult for brands to personalize their offerings, but consumers will still expect targeted deals and recommendations.

Ultimately, this is good for the marketing world because innovation is required for success—old ways will not win anymore. Marketers should expect to explore alternative means for determining customers’ individual preferences, like first- or zero-party data collection that are declared explicitly from the consumer and not inferred or deduced from practices such as tracking web behavior.

These privacy changes will put control of data back into the hands of the consumer, but also give some power to the individual brands. No longer able to derive their core data sets for ad targeting, or achieve personalization based on third-party data that they purchase, brands need to reach out to consumers directly and collect new zero-party data at an individual level. This is a win because companies will own that data instead of renting it from media brands like Facebook, Google, Amazon or having to buy it from data brokers who make the same data available to any brands’ competitors as well.

Every marketing initiative will be reinvented

The writing has been on the wall for some time now: marketing needs to change. In an overwhelmingly digital age, brands have become complacent in their marketing efforts. When shopping first went digital, most brands adopted email, SMS and other virtual strategies, but many of these sat stagnant, especially as ad tech made targeting generic consumer segments based on web behavior and other third party data easy to execute. Digital marketing, coupled with the overwhelming demand from consumers for personalized journeys, will need to get personal once again and channels such as email, SMS and even brands’ apps and websites, will become increasingly important channels to deliver on consumers’ expectations.

The writing has been on the wall for some time now: marketing needs to change.

We will find personalization at the core of all of these changes. The only way marketing efforts will succeed in an increasingly regulated world of data privacy is if those efforts focus on building a one-to-one relationship with individual consumers, one at a time. Segmentation will be set aside in favor of direct communication, whether through AI or through dynamic content and offers matched to each individual’s wants and needs. It will be essential for companies to develop the tools and resources needed to communicate with their customers directly so that they can offer these hyper-personalized experiences. We will see personalization as the underlying theme in everything from mobile and direct-to-consumer revenue strategies to brand identity development.

In the end, personalization is what drives action. Consumers demand an individualized experience from each brand they work with, even though they are more cautious about sharing their data. It’s essential that brands are transparent about their data practices and build trust—something lacking in the social media world right now.

Data privacy may be one of marketing’s biggest challenges, but the change and innovation it is forcing marketers to adopt is absolutely beneficial for the industry as a whole. It will force them to start taking a more human approach to driving desired outcomes.