The Catch-22 of Digital Advertising: Privacy Vs. Personalization

Data is everywhere. From the personal to the professional, it is becoming increasingly essential to how we operate. Despite its great importance, data can also be controversial: some see it as a threat to privacy, while others see it as an invaluable tool for improving our daily lives.

This is particularly relevant in marketing, where personalized digital advertising has become the norm.

But how do we strike a balance between data-driven marketing and consumer privacy?

The Debate of Privacy vs. Personalization

Anyone who’s even remotely familiar with the world of marketing will be able to tell you how important an issue of privacy is within it. Across the board, consumers increasingly want and expect their personal information to be protected, whether from marketers, data brokers, or anyone else who might want to collect and use it. In fact, an overwhelming 86% of consumers state that privacy is something they deeply care about.

Simple enough on its own, right?

Well, delivering on this preference is made more complicated because most marketing strategies involve collecting and using data in some capacity. In other words, to create targeted and personalized content, marketers need access to information like consumer location, age, gender, purchasing history, and more.

This presents something of a conundrum then: on the one hand, consumers want their privacy respected; on the other, marketers need access to data to do their jobs. How can both of these needs be met?

Transparency And Accountability

The truth is that while many consumers do want their privacy respected, they also understand that data is necessary for marketing purposes. In fact, 65% of consumers are willing to share personal information if it means they’ll receive more personalized content and offers.

This comes down to a question of transparency: as long as consumers know that their data is being collected and used, and as long as they’re okay with it, they’re likely to be more forgiving.

So How Can Marketers Put Transparency and Accountability into Action?

There are a few key steps that can be taken:

1. Make it clear to consumers exactly what data is being collected and why.
2. Get explicit consent from consumers before collecting or using their data. The pop-up may be on your website or there may be a checkbox they need to check before proceeding.
3. Allow consumers to see what data you have on them, and let them edit or delete it as they see fit.
4. Keep your promises! If you say you won’t sell consumer data to third parties, don’t do it.
5. Be open about any changes to your privacy policy, and give consumers a chance to opt out if they’re not okay with it.

Following these steps won’t guarantee that every single person will be happy with how you’re handling their data. But it will go a long way toward building trust between you and your consumers, which is essential for any successful marketing campaign.

Adopt Progressive Profiling

Let’s be honest – although a good portion of consumers contest, take a look at this example: the use of their personal data, the reality is that a large part of them still want some form of catered experience based on it.

Striking a balance between these two needs can be tricky, but it’s not impossible. One way to do this is through a technique known as progressive profiling.

Progressive profiling is a way of collecting data from consumers in a manner that feels unobtrusive and non-intrusive. Rather than asking for everything up-front, you only request the bare minimum amount of information you need to provide a good customer experience.
You can then supplement this over time as you get to know the consumer better and as they become more comfortable sharing information with you.

Take a Look at This Example:

You run an eCommerce store that sells shoes. When a consumer first visits your site, you only ask for their email address and nothing else.
Once they’ve made a purchase, you might ask for their shoe size and shipping address.

If they sign up for your loyalty program, you might ask for their birthday to send them a discount on their special day.

This gradual accumulation of data makes consumers more comfortable, but it also gives you a chance to build up a comprehensive picture of each one.

Embrace First-Party Data Over Third-Party Data

When most people think about digital advertising privacy, their thoughts immediately turn to third-party data. This is the kind of data bought and sold by data brokers, and it often includes things like consumer purchasing history, demographic information, and more. It’s important to know that although third-party data is indeed among the most popular forms of data marketers can use, it’s not the only kind dispensable.

First-party data is different. This is the data that you, as a brand, have collected yourselves through interactions with your consumers.

This could be website activity, newsletter sign-ups, or even data collected from loyalty programs.

Advantages to Using First-Party Data Over Third-Party Data

There are a few key advantages to using first-party data over third-party data:

1. You know exactly where it came from, and you can be sure it’s accurate.
2. Consumers are generally more comfortable sharing first-party data than third-party data.
3. You don’t have to worry about violating any privacy laws when using first-party data. As it’s all been collected with the consumer’s explicit consent.
4. It’s often cheaper to collect and use first-party data than buy third-party data.
5. This gives you a better opportunity to create personalized content, as you have a more complete picture of the consumer.

For all these reasons, it’s worth making first-party data a central part of your data privacy strategy.

Conclusion

Finding a balance between personalization and data privacy is a catch-22 of digital advertising that no marketer ever wants to deal with. However, by understanding customers’ concerns and utilizing a few best practices, you can find that happy medium. And when you do, you’ll be able to create marketing experiences that are both personal and privacy-compliant.

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