Respecting Data Privacy while Boosting Business
Privacy in the digital era. That sentence alone seems like an oxymoron. Privacy and digital platforms get along like oil and water. For years, consumers and governments have been wary of what platforms such as Google, Facebook, and others keep on their users as it pertains to user data. The results have been eye opening, to put it mildly. The amount of data these digital behemoths have on their users has led to legislation globally, first with GDPR in Europe and now CCPA and CPRA in the US, with several other state and federal laws pending.
What is privacy?
Before we dive deeper into how the perceived invasion of privacy is happening, perhaps it’s worth defining the word privacy. Privacy, as defined by Google’s zero search result, is the state or condition of being free from being observed or disturbed by other people. Let’s focus on “being observed” for now, and we will revisit being “disturbed” later on.
To better understand the issue, it’s important to understand the reason why these digital platforms are keen to observe and collect so much data. Google and Facebook make up the majority of their revenue from ads, and as those in the industry know, to deliver the most relevant ad, you need to have some consumer data. If you’re selling diapers, it would be good to know if the consumer you are targeting has shown some indication of being relevant, either through their search history or through their purchase history. Enter Google and Facebook, two companies who have a plethora of information on billions of users globally so that they can bridge the gap between brand and consumer. Seems harmonious and symbiotic, right? So why are consumers and governments laying the hammer down?
From a consumer standpoint, the reluctance comes from having your every move tracked. Cue the signals of Orwell’s 1984 and the reference to Big Brother. There are some searches and purchases we’d rather keep private instead of it being used to categorize us. A purchase of a laxative shouldn’t have to follow us around the web and remind us about digestive health the next time we open Instagram. Sure, it’s relevant, but it also crosses the line in terms of being intrusive for many. For governments, the concern comes from a private entity having so much data on its users. The fact that Facebook knows I’m married, have a child, like to play/watch soccer, and shop at Nike while the U.S. government only knows half of that is alarming. And that’s just a micro-example. If you layer on what Google and Facebook know about me, it is more than any other entity or person knows, even including myself. Scary stuff.
Add to the mix a global pandemic, and privacy conversations stretch beyond just the two usual suspects of Google and Facebook. Apps, such as COVID-19 trackers issued by state and federal agencies, track location data to notify you of increases in cases in your area. Other apps such as Citizen help notify you of alarming incidents happening around you. The question then becomes: Are you willing to trade your location data for your own personal safety?
Paid subscriptions don’t solve the problem
If consumers are reluctant to exchange information for access, then what’s the alternative? Well, simply put, services such as Google and Facebook would have to charge for usage. As consumers, we’d scoff at that suggestion. Search engines and social media platforms have always been free to use as we get value from it. Paying for these services is not something most, if any, consumers would be willing to do. Therein lies the rub. Consumers want these utilitarian platforms for free and for these platforms to exist, they need a strong source of revenue, which they mostly get from selling ads. In order to increase ad revenue and create a better consumer platform, they need to have compelling propositions, which usually come in the form of better ad targeting. See the problem?
Paying for a service isn’t necessarily a silver bullet that gets you to opt-out of data collection. Amazon Prime, Netflix, and Spotify Premium, all paid services, still collect user data. They don’t sell it to third parties, but they do use that data to curate content and get their users to increase frequency and duration. Even in these instances, the content curation can seem intrusive and off-putting. In 2016, Spotify had OOH ads that noted users who listened to certain songs and had entertaining captions around them. While most enjoyed the insightful ads, some scrutinized it, noting that these invaded privacy despite the data being anonymized. The end goal for these brands is to create the best user experience possible, driven by data. I suppose that’s the irony since that’s what Google and Facebook also want to do — create the best user experience possible, driven by data. Whereas Amazon, Netflix, and Spotify own the products and services, Google and Facebook are mere liaisons to get consumers closer to those products and services.
Observing without disturbing
Let’s look back at the definition of privacy. We can all agree that we are being observed in exchange for using these services, but are we really being disturbed? These big tech platforms would argue that the ads will have existed anyway, with or without the targeting data, so why not improve the interaction with relevance? They might even argue that instead of being disturbed, a consumer is actually enriching their experience because of the data they shared.
The concept of being relevant while not being intrusive is not mutually exclusive. Certain brands have been able to master this delicate balance. One such brand is Apple. Apple knows that I have an iPhone 12, but they aren’t chasing me on all corners of the internet trying to sell me accessories, or worse, another iPhone. However, when I go to the Apple Store app, it has all my devices connected to my Apple ID, creating a curated list of relevant products. This is a masterclass in being relevant without being intrusive. Nike is the same. They have all my past purchases, and their app tailors products based on my interests/shopping behaviors. My Nike app experience would be very different from someone else’s because our purchasing behaviors are different, and Nike acknowledges that by enhancing each user’s experience differently.
It’s worth noting and appreciating that not all brands are like Apple and Nike. They do have to be a bit more aggressive to help their bottom line. But that kind of behavior and lack of tact can be penny wise and pound foolish. While the consumer may make the initial purchase, the complete disregard for space and bombarding consumers with offer after offer is sure to alienate them in the long run. This approach leaves consumers feeling violated and their privacy completely disregarded.
How to respect customer boundaries
In an era where privacy and data usage is so fragile, brands need to be cognizant of how to put their consumers at ease. Here are a few steps on how they can do so:
- Be transparent: In the first interaction with the consumer, let them know that their data is being collected and how it will be used. Give them the option to opt-out and make that very visible, not hidden in page 74 of your end user agreement.
- Communicate early and often: After they’ve opted in, follow up via email or in-app to let them know how the data collection will help enrich their brand experience. Reiterate that they can opt-out at any time.
- Manage frequency and cadence: Don’t overwhelm your customer. Set frequency caps and spread out the cadence of your messaging.
Right now, marketers should take the opportunity to learn how to engage their consumers without crossing the very thin line that straddles relevant and creepy. It’s a challenge for sure, but all the technological advancements we take for granted now were considered novel at some point. Perhaps, these intensified privacy regulations will provide the impetus for the next great marketing innovation.
It would appear that we’re at a crossroads between privacy and accessibility when it comes to these utilitarian platforms. On the one hand, consumers want and expect these services to be free, yet on the other they are reluctant to provide a value exchange which allows these very services to be free — which is their data. The pendulum is shifting towards consumer privacy as governments are cracking down on the amount of data Google, Facebook, and others can store. And marketers must be prepared to make swift, strategic changes to their programs to ensure they are not only abiding by new regulations, but also authentically engaging with consumers.
Shamsul Chowdhury is VP of paid social at Jellyfish.