Customer control of data is embraced by forward-thinking brands. How should marketers navigate this new era?
With an increasing number of high-profile data breaches, lawmakers and regulators around the world are establishing new data security regulations to protect personal data and enables customer control.
In Britain, and across the European Union (EU), the newly minted General Data Protection Regulation (GDPR) go into effect on May 25, 2018 and portent to change the landscape of digital marketing forever. The legislation will apply to any company that handles EU citizens' data, even if that company is not based in Europe.
Should Brexit prevail, it’s likely that there will be no dodging data protection regulations. "I don't think Brexit should mean Brexit when it comes to standards of data protection," UK Information Commissioner Elizabeth Denham told BBC Radio 4's afternoon broadcast.
In the U.S., the FCC is following suit and tightening the requirements concerning the use of an individual’s personal data and Asia leads all countries in its implementation of data privacy laws. Given the heightened sensitivity around consumers’ data usage, security and privacy, and the growing mistrust of brands using their data in less-than-reputable ways, protocols like these are essential.
No longer will companies, brands and unscrupulous players control a customer’s profile, personal identity information or any other private data tidbits without explicit and specific permission. Brands will no longer be able to bury use consent in their terms of service or simply provide an easily-overlooked opt-out box.
Personal Data as Defined by Regulators
To clear up any ambiguity amongst the regulations, personal data is considered information that relates to any person and their private, professional or public life. It can be: a name, photo, email address, bank details, posts on social networking sites, medical information, purchases, location, passwords, interests, or a computer IP address. Technically, the GDPR apply whenever a person can be directly or indirectly identified by any data, or be singled out in a group of individuals.
The consequences of skirting the law are fodder for CFO nightmares, and rightfully so. Noncompliance could lead to astronomical fines of up to 20 million euros or 4% of annual worldwide revenue, whichever is higher. Yet of greater concern should be the irreparable damage to brands and their relationships with consumers.
The End of the Orwellian Era
GDPR and the FCC ruling means that marketers are going to need to accept and embrace the new era of transparency and customer control and move past the outdated policies. In this paradigm, it’s the consumers who choose the brands with which they want to engage and voluntarily share their information, likes, dislikes and aspirations, not the other way around.
Consumers will also have the right to exercise data portability, which gives users the right to extract, in a structured format, personal data from service providers and to move personal data to another provider.
Since the individual now owns their data, they have every right to:
Future of Marketing—Establishing Meaningful Customer Relationships
For some brands, the new rules are blasphemy. However, I believe these privacy parameters create a future of marketing that is brighter than ever. The personal preferences customers willingly share with brands will lead to stronger relationships over time, enabling brands to deliver highly-personalized experiences that are much more relevant. Brands will also have the type of data needed to reactivate or revitalize new relationships since the information from customer-created profiles will make it easier to cater to their preferences across all touch points.
Target and interest group profiling can finally be determined right down to the individual. This alone brings about a whole new age of targeted advertising. Advertisers with more knowledge can choose more effective media and take advantage of lower cost media opportunities when they fit its customer profiles.
It will also be possible to analyze social networks in much greater detail and identify viral hubs, bridges and dead ends. Even with customers' control to edit their digital footprint and the right to be forgotten, the volume of data is likely to increase as customers update preference data and brands piece together a 360-degree view of each shopper.
The implications of this granularity have enlightened brands to advance advertising strategies to enhance the branded messages being shared with consumers. Individually-targeted advertising will have a much higher response rate and real, or at least perceived, value to the consumer, which will reduce wasted marketing dollars and provide results that are quantifiable and directly tie to marketing ROI.
So, why haven’t brands gone down this yellow brick road for meaningful data and customer control before? For one, generations of marketers and CMOs have long had access to cheap, universal and mostly meaningless data, with which was used as they pleased. These marketers wrongly assumed that asking permission to use one’s personal data would beg more questions than answers.
With the right technology solution, and by embracing the exciting brand opportunities on the horizon, marketing in the new GDPR world will deliver far more positive outcomes than companies using disparate third-party data realize today.
However, there may be some bumps along the path of implementing marketing practices to meet regulations. Full compliance is just around the corner, and 80% of brand customer data will be obsolete on May 26 2018, yet few brands or agencies are prepared. Still, forward-thinking companies such as Uber and Airbnb have proven brands can deliver meaningful experiences for consumers without owning customer data, placing them ahead of the curve in this new era of data regulations.