How to understand and navigate the coming era of privacy, and where to find the opportunities to drive the necessary changes, by Sourcepoint co-founder, Brian Kane.
Since the advent of GDPR, much of the industry’s conversation on consumer privacy has centered on four themes: European compliance; the US state privacy law patchwork; alternatives to the third-party cookie; and frustration with Big Tech’s dominance over user data. To date, apart from a small set of innovative brands, advertisers have largely taken a reactive stance to privacy in the digital advertising ecosystem. But with 2022 well under way, that’s all finally starting to change.
Increasingly, brands are thinking about the role that privacy (i.e., the respectful use of consumer data) plays in ensuring the sustainability of their operations. And it’s about time, with privacy advocates pushing for more oversight of what has somehow been coined “surveillance advertising”. The big technology platforms, like Google and Apple, are making privacy a number one priority, and leveraging privacy protection as a competitive differentiator. Brands must follow suit by changing the way they think about consumer preferences. Consented first-party data and interest-based cohorts are both tactics that have become essential for successful privacy-centric marketing. In retail, for example, the potential for brands to use first-party data gained from loyalty card systems is offering a new type of value exchange between consumers and brands.
Where does all this leave advertising, specifically? Increasingly, instead of blindly rolling the dice on the open web, shrewd advertisers are moving data privacy and data ethics to the center of their brand’s strategy. If personalized advertising is to continue, it’s clear that current market dynamics are no longer sustainable. Advertisers have an important role to play in ensuring that the entire digital supply chain is meeting consumer privacy standards.
In a digital age where 74% of US internet users are concerned about their online privacy, advertisers are uniquely positioned to enact positive change on the privacy front. Not to mention, the majority of consumers say they’re more likely to engage with an ad on a website they trust.
Advertisers have the purse strings needed to help align incentives on consumer privacy for the entire ecosystem. By taking a proactive approach to privacy – for example, choosing to work with publishers and other partners that share a privacy-first mindset – advertisers can indirectly hold the entire ecosystem accountable and nudge participants in the right direction.
Leading with transparency
Just as we’ve seen the cultural shift towards purpose-driven marketing, with companies using their platforms to support the fight against climate change or promote DEI initiatives, smart brands have begun to approach data privacy in the same way. Big tech firms, such as Amazon and Facebook, now take privacy concerns into account when designing new products.
Advertisers can leverage this effectively by crafting messaging that positions data privacy front and center. New products that require subscriptions can emphasize the security surrounding any personal data. Equally, brands can be open about the methods advertisers are using on their platform, revealing the extent to which privacy is maintained throughout the process.
However, like all “cause marketing” initiatives, companies can’t simply talk about how privacy is an organizational virtue and then turn around and use consumer data inappropriately. Instead, they must lead with transparency – being as straight with consumers as they can about what data they’re going to collect and how they’re going to use it. Most customers are happy to hand over data in exchange for personalized experiences. By using data respectfully, brands create more loyal customers, improving lifetime value along the way. This is a balancing act worth figuring out.
Driving change across the ecosystem
Due to their pivotal role in today’s digital environment, advertisers have the power to determine the future of the internet. By rewarding the publishers that have invested in data privacy and in looking at data privacy as an extension of customer experience, advertisers can proactively shape the digital ecosystem that we’ll all use for years to come. The open internet relies entirely on the choices advertisers are making as they carefully approach the issue of privacy-first advertising.
Furthermore, as organizations continue to sharpen their focus on data ethics, advertisers have an incredible opportunity to lead by example, encouraging partners and even competitors to follow suit. By understanding the importance of privacy and engaging consumers in a respectful and transparent manner, brands can meet market expectations and position themselves – and consumers – to win in the data-driven future.
Getting started now
Equally as important is what’s at stake beyond data privacy on owned channels. The consequences of inaction in advertising could have a major impact on both industry and mass culture. The current lack of visibility into the true privacy practices of media partners represents an existential threat to the media ecosystem. If advertisers fail to adapt to this new reality, high-quality content – and the people-based marketing that sustains it – will die a slow and steady death.
On the flipside, by making data ethics a top corporate responsibility, advertisers can create a tidal wave of change in the privacy-first era. And by explicitly telling consumers about the benefits they’ll enjoy by sharing access to their data, and exactly how that data will be used, protected, and shared, they’ll bring publishers and adtech and martech intermediaries along with them.
We’ll all be better off because of it.
