Open season on personal data is coming to an end. As part of the latest edition of Joined-up Thinking magazine, Gam Dias looks at how brands can create processes and propositions to gain trust and consent from customers and keep the data pipeline flowing...
To be a successful marketer in a digital world, you’ve really had to be on top of the data. How you profile, segment and target; what that costs and what response you get at each stage of your funnel; who ends up converting; when they do; what can you do to get them to keep returning, spending and recommending. Your role is at the beating heart of the business, and consumer data is its lifeblood.
Over the next few years, our open season on personal data will come to an end. Apple’s revised IDFA policy means that cookies are not what they used to be. That will go for Android too. Under GDPR / CCPA, privacy rights and regulations are now being enforced on anyone processing consumer data. Consent is a toolkit of dark patterns. The IAB consent standards are a trick and you know it. Consumers have been awakened by movies like The Great Hack, The Social Dilemma, and books like Privacy is Power and Surveillance Capitalism. Consumers no longer want to be the product.
Privacy is a basic societal need and not simply the preserve of the wealthy. In primitive tribes that live in communal longhouses, there are social protocols that give families and individuals their space. Generation-Z, which has grown up digital, simply builds their own privacy model in social media by setting up multiple accounts, each used for separate social groups. This spawned a whole industry around identity resolution. But there is a backlash. Matching our online identities adds to the creepiness of smart devices tracking our physical location and listening to our conversations. Consumers are expressing a desire to regain privacy in an already intrusive digital world.
Are you feeling the squeeze in what can be done with personal data? It’s time to bring consent back into the light by providing something worth consenting to. Zero party data is the new consent experience that gives the consumer greater agency over their data. The privacy tech space presents new zero-party engagement models underpinned by trust and lifetime value.
As a digital marketer you’re already master of 1st, 2nd and 3rd party data. Most of the time, this data is obtained with small-print consent, a waived obstacle in the way of free content, with little thought as to where that data will be used. What if that small print consent is taken off the table?
The Martech industry quickly jumped upon zero party as a quick fix, allowing the industry to continue selling tools based on first-party data by allowing consumers to set preferences, enrich profiles and take surveys. The accurate interpretation of zero party philosophy enables true agency over personal data, giving the consumer precise control of who sees their data for what purpose for how long.
Earlier digital acquisition and retention models relied on collecting and hoarding data and performing look-a-like alchemy behind closed doors. This fed the programmatic advertising machine, but ultimately created an increased level of noise competing for the same net customer demand. The main beneficiary is the adtech industry. Marketers are simply spending more to out-market each other.
In the light of consumer awareness, privacy regulation and a swathe of new technologies are entering the market. As an industry, we have the perfect opportunity remake these processes to be favourable to both the marketer and the consumer.
The economic theory of rivalrous goods states that an item like a bottle of wine can only be consumed once, so it is rival. Many people can watch a movie without loss of quality, so it is non-rival. An online multiplayer game like Fortnite increases in value the more players consume it, so we extend the classic economic theory and call this anti-rival. Data, and in particular personal data is anti-rival. The more times personal data is processed and remixed, the greater the potential value. As digital marketers, this must be close to your heart.
Incidentally, paying people money for personal data is a non-starter because money is rival and data is anti-rival – and would cause the universe to implode. No start-up has succeeded in paying people for their data.
On the one hand, we need to give consumers agency through zero party data. On the other hand, once they have the ability to control the data, how can we ensure the data can be leveraged by all the brands that can provide value to the consumer? And by the way, consumers are in a privacy paradox. When surveyed, they are untrusting of brands with their data. Yet, they continue to share intimate details of their lives in social media.
Well-managed customer relationships should deliver brand equity, customer lifetime value, and customer profitability. So, it’s curious that the software industry made customer relationship management into a customer database. The result? Scaled mass marketing with a veneer of personalization. If we think that online privacy is in the hands of those brands that we trust each day, then the value of those relationships will increase our lifetime value. Brands will have a large number of customers that visit once, after which the drop in successive visits falls off a cliff. At the end of the visit frequency tail, ultra-loyal customers return over and over to take you from the red into the black.
What can a brand do to cultivate trust and long-term relationships?
- Offer real value in products or services – otherwise customers will not return
- Make a financial return – otherwise the organization will not be able to sustain the relationship
- Respond to the customer when they make a request – silence or evasion will strain that relationship
- Give the customer control over what they want to share with whom – meaning that organizations must build trust through offering privacy
Zero Party Business
True customer agency is not a pipe dream – a new generation of companies and technologies are making this happen:
Trust in Apple: The recent “Privacy. That’s iPhone” campaign positions Apple as the privacy choice and this principle underpins its hardware, software, cloud and marketing propositions.
Publishers without Cookies Founded by a Digital Marketing pioneer, PrivacyCloud’s Customer Data Hub gives consumers agency over their data and a way to have specific advertisers pay for news media subscriptions.
Search without Ads: Ex-Google advertising executives have developed ad-free search engine, Neeva that does not collect data, but provides a more complete search of the web and of your own cloud data stores. Neeva has no advertising and will not share consumers’ data.
Paying with Trees: Founded by an advertising executive, Tribal Data is a mobile application that collects device data and shares it anonymously with brands. Instead of paying cash dividends, Paying with Trees helps consumers make the planet a better place by planting trees.
Banking with Intent: Fintech start-up Valido (launching 2021) will work with the Open Banking protocols to quickly build a secure financial profile that is more accurate than a credit score, allowing consumers to assert themselves as financially creditworthy to any brand.
What’s a Marketer to do?
No marketer in their right mind is going to cold-turkey their brand on first-, second- and third-party data to jump on the zero-party bandwagon. You will need to create new processes and propositions to gain consent, give agency and build trust. A customer relationship built on these foundations will ultimately deliver acquisition, retention, and lifetime value. Explore and test the new technology propositions to help customers gain benefits from sharing data as part of your marketing strategy.
Gam Dias is a Partner of 3pointsDIGITAL, MSQ’s digital advisory partner
This article appears in the upcoming edition of Joined-up Thinking Magazine. Get hold of an advanced copy by emailing email@example.com