Since GDPR came into effect, consumers have become ever more aware about how their data is used by brands. In fact, complaints against companies misusing customer personal data have almost doubled from 21,000 to 41,000 since last year, according to the UK Information Commissioner’s Office.
Regulations have also impacted the way in which brands are collecting and using customer data for personalisation. Since May 2018, organisations have had to get the information and insights back on their markets, prospects and customers by earning the right to have their data. They have done this by making efforts to provide content that informs, supports, educates and even entertains their audiences, without directly trying to sell to them.
To be able to deliver a consistent, personalised experience across channels, marketers need to be able to analyse data holistically and provide a clear view of each individual customer. In this piece, I’m going to explore three ways in which data and regulations are having an impact on marketing.
Changes in consumer attitudes towards data sharing
The increased number of high profile data breaches that have occurred over the past few years and the introduction of regulations such as GDPR, have increased consumer awareness about the importance of personal information and the power they hold in relation to their data and what they should receive in return for sharing it. Today data privacy is not just being considered across businesses, but it’s even being discussed in schools. It is also a big focus at government level on the understanding that control and intervention is needed in order to maintain the privacy, security and safety of citizens.
Since the Facebook/ Cambridge Analytica scandal, where the former admitted to have shared the data of 87 million of its users with the political consulting firm to target them with personalised ads, large technology companies have become incredibly mindful and transparent about how they collect, store and use customer data.
Responding to data breaches and government-imposed regulations, large technology firms may be the most impacted by the data revolution. Today, the focus of these companies is to balance consumers’ craving for personalisation with their need for privacy. A bipolar technology ecosystem is emerging - on one end there are firms that explicitly state that their business model does not involve monetising of customer data even though they collect it, and on the other end are firms whose primary revenue source is through customer data monetisation. Irrespective of their polarity, there is increased communication around ethical data use for providing relevant personalised experiences to users. In cases where a brand wants to share customer data with third parties, there is a dual recognition about the need for transparency from the very beginning- otherwise the brand image is likely to suffer as a result.
What’s changed since GDPR?
As well as an increase in complaints, four times more data breaches have been logged since the introduction of GDPR, according to the UK Information Commissioner’s office. This number could be mitigated if more companies recognised the fact that GDPR is ultimately a mutually beneficial initiative.
GDPR created uncertainties for brands and consumers alike and this all comes down to trust. As a result, many brands moved their social advertising spend to larger providers such as Google instead of relying on smaller, and possibly, more innovative companies as they believed their brand would be more protected by the influence, expertise and reputation of these larger providers.
On the bright side, GDPR has helped brands finally realise consumer trust as a key differentiator and those that are transparent about what they do with customer data and use it to enhance their experience, are the ones seeing greater success.
Apple is a great example of a company that is open about how it uses customer data and communicates this in a plain language. At this year’s Consumer Electronics Show (CES) Apple’s billboard advertising, positioned right next to the Las Vegas Convention Centre where the event takes place, displayed the message ‘What happens on your iPhone, stays on your iPhone’, taking a twist on the popular Vegas line. Below that resided a link to Apple’s privacy webpage, where the company details at great length about the security and privacy of its products and services. The technology giant also used this ad to take on competitors who have been criticised about the way they handle customer data.
Personalisation in a data privacy era
Prior to GDPR, a lot of the personalisation efforts were based solely on the brand’s vision for customer experience, rather than necessarily starting with a customer-first mindset. Brands were using a catch-all approach: collecting all types of data, regardless of its usability. It was the wild west of customer data collection, made incredibly easy by technology, in many cases without specific plans for its usage or the right controls in place.
However, this has already started to change significantly with brands putting more effort towards planning and communicating the intended use of customer data so that they can conduct well-executed content personalisation with the customer in mind. This journey has only just started, though. Both the brand communication as well as user awareness needs to further evolve as connectivity permeates through everything that we do with the emergence of 5G and continued evolution of the Internet of Things.
Customers continue to demand content and experiences that are personalised to their exact wants and needs and if brands cannot provide this, their ROI and brand image are likely to suffer. To attract and retain loyal customers, brands need to be taking a customer-led approach to personalisation so that the content they are serving meets their desires. Furthermore, it’s also important that brands clearly communicate the benefits of a data-value exchange to their customers, and then respect their wishes in order to gain their loyalty. This is and will continue to result in a significant shift of power from brands to customers.
To conclude, increased consumer awareness about data sharing as well as the introduction of data privacy regulations a year ago, has had a significant impact on marketing, particularly on personalisation efforts. However, marketers should regard these as opportunities rather than challenges to refine their strategies and instil a sense of trust in their customers. Overall, the more honest and transparent marketers are with their customers, the more they will reap the rewards in the long run.
Written by Vijayanta Gupta, VP Strategy & Industry, Sitecore