Aug'22·Jordi Capdevila·3 MIN
Striking a Balance Between Advert Personalization and Data Protection
Right before the pandemic,Gartner declared that personalization was dying and that 80% of marketers will abandon personalization efforts by 2025. A few months into 2020, traditional customer journeys and touch points had all but vanished, leaving marketers with only digital channels to address both loyal and fresh customers. Consumers clamored for contextual and personal experiences even more than before.
While the demand for advert personalization and customized experiences went up, the market saw a parallel surge in the demand for higher data privacy and accountability from the brands they engaged with. Data protection became the bedrock of any marketing campaign.Studies indicate that 97% of the respondents are either very or somewhat concerned about their personal data privacy. At the same time, consumers expect brands and companies to offer personalized recommendations and experiences whenever they demand.
This catch-22 scenario between advert personalization and data protection was best summed up by a cartoon strip by Marketoonist in 2018. There exists a very fine line between whether a customer perceives an ad they see as cool because it appeals to their immediate needs or personal ethos, or they perceive an ad as being invasive or inappropriate. While the problem is clearly understood, how do marketers proceed?
Understand what’s legal
With data privacy coming to the forefront, governments across the world have been defining guidelines to ensure user data is protected while allowing businesses to still gain insights into consumers. Acts like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) are forcing businesses world over to be upfront and transparent in the way they manage data.
Such acts help make consent an active part of the consumer journey. Going forward, it would be paramount for all businesses to have their legal teams work closely with all departments in the company to ensure due diligence on how data is collected, stored and used, is followed.
Gain customer confidence with regard to data being collected
According to a PwC study, thirty-nine percent of consumers state that transparency around data use is important to them. As long as consumers are able to see how the data about them is being collected, secured, used and are offered fair value in return, consumers are more than happy to share relevant information. This includes not sending customers verbose jargon-heavy T&C forms to sign off on, in order to use the product or service a company delivers.
Google’s ‘consent mode’, introduced in 2020, allows Google tags to be adjusted based on consent given by the user. While we need to see how this changes once Google decides to drop cookies on their browsers completely, it is a start to how businesses can shift their advert personalization strategy while keeping in mind relevant compliances and still deliver personalization.
Sensitize employees on data privacy
While companies don’t control how end users consent to sharing personal data, they need to ensure employees who handle customer data are aware of the implications of internal lapses. Regular training on how to manage data, changes to regulatory requirements and more are the norm. While the data collection and protection is the first step, it’s also important for businesses to limit the access to personal consumer data for marketers looking to drive advert personalization. One of the ways would be to segment consumer requirements into groups like interest, time of purchase, location, etc. by combining first-party and third-party data. This will allow marketers to look at context and create messages that would resonate with the consumer at a group level as opposed to an individual level.
Amazon’s “Frequently Bought Together” section is an example of how to aggregate data from many customers that may present a relevant offering for each new customer without alarming them about its data tactics.
Leverage technology and new data sources
Technology plays a key role in ensuring this balance between advert personalization and data protection. Contextual AI is proving itself to be one of the best ways forward to deliver top-performing ads in the right context. Technology today is able to understand user patterns when they are on a website, understand “high attention” areas, context of content and more. By combining contextual AI and in-content advertising placements,brands are able to deliver almost five times the attention, without breaching data privacy laws.
As we move towards a cookieless world, we’re seeing the emergence of zero-party data. Companies like Netflix and Spotify leverage zero-party data (defined as the data that a customer intentionally and proactively shares with a company) to deliver personalized experiences that allow brands to engage in a more meaningful and secure way. Netflix is not only able to personalize the recommendations of the next movie or series, but also the poster that you may see to help entice you to watch the video. Feedback based on what works, number of episodes seen and more is feedback to the production team on the shows they would need to make to drive up viewership.
To sum it up, balancing advert personalization and data protection is a delicate and complicated matter. There exist guidelines to simplify what data is being collected and how it can be used. It’s up to brands to ensure that these guidelines are at the center of every marketing campaign they build, and that all the communication to customers and prospects showcases the transparency in which data is being used and most importantly, adds value that is seen as fair compensation for the surrendering data.