Google has finally decided to stop scanning personal Gmail messages for ad targeting, and privacy campaigners are delighted. But, there’s a danger this may set a wider precedent in the industry – a move away from personalisation, driven by privacy concerns.
Over the years, privacy and personalisation have been increasingly pitted against each other. The digital world’s answer to Superman versus Lex Luthor or Magneto versus Professor X: privacy versus personalisation. And, at the moment, privacy seems to have the upper hand.
It’s certainly a strong media focus, what with the upcoming General Data Protection Regulation (GDPR), EU-US Privacy Shield and multiple data breaches (including Gov.uk and the US Republican Party) putting online privacy in the spotlight. As a result, anxiety about data usage in advertising has grown and some brands are wondering if they should rein in personalisation to prevent data breaches. Indeed, Wetherspoons has even opted to wipe its entire email database.
But the question is: where does this leave the advertising industry – and is it impossible for these old enemies to find some common ground?
Personalisation isn’t the ‘bad guy’
Currently, brands are facing a conundrum. Personalisation has the potential to improve ad quality, and reduce ad blocking, by making messages more relevant for individuals. But, many consumers are freaked out by the fact brands hold their personal data full stop.
The reason for this is simple: consumers don’t understand why their data is necessary, so the idea of information about them being stored for unspecified reasons seems creepy. Yet solving this issue doesn’t require drastic action, all that’s needed is better communication.
Brands must explicitly convey that used correctly – and this is key – holding data on an individual is highly beneficial to their online ad experiences, particularly on mobile.
And to do this effectively, they’ll need to follow three key steps:
1.Ensure data is front and centre
According to research by the Chartered Institute of Marketing (CIM), nine in 10 consumers don’t fully understand how organisations use their personal data – and a third have no idea. This lack of comprehension about the destination of data is a big driver of concern about brands storing it. So, the first thing brands need to do is openly explain how they use data.
Instead of hiding information about data collection and usage away at the bottom of their website, brands must ensure it is front and centre. A prominent terms and conditions, or dedicated data policy webpage is a good start, but the most effective solution is to demonstrate the tangible value a consumer will get from usage of their data. To be truly seamless, this communication needs to be embedded into the UX of the mobile site or application, and part of a smooth and native user journey. Simplicity is also vital: phrases loaded with industry jargon won’t aid consumer understanding, wording needs to be clear and concise.
What brands can achieve through this increase in transparency is worth the effort: greater consumer trust. With in-depth understanding of what happens to data, consumers’ concerns about brands accessing and using their personal information will be dispelled.
2. Educate on the benefits
Most brands use consumer data to enhance ad experiences but the majority of consumers aren’t aware of this. Consequently, giving brands access to data has little appeal; in fact, the CIM study found that 70% don’t see the benefit of sharing their personal data at all.
It is clear brands need to create a stronger value exchange, where consumers receive more useful ads in return for their data. For example, exclusive discounts at their favourite store personalised to purchasing preferences, a voucher for their most highly frequented restaurant when nearby, or a sunscreen discount when they’ve just booked a holiday.
Above all, brands need to show consumers why data-driven ads are better. This is, of course, easiest on mobile thanks to location data: with the ability to pinpoint where individuals are, brands can ensure messages offer maximum relevance. Fan of frozen coffee? Try the new Frappuccino flavour at the Starbucks three metres away, or if you like superhero-battles, how about catching the latest Marvel film at the cinema by the office?
3. Stay up-to-date with privacy law
Finally, it’s crucial for brands to keep an eye on the changing digital privacy landscape, and make sure they are compliant in the way they use data and tell consumers how it’s used. Particularly if laws, such as the GDPR, are set to have a substantial impact on how personal data is accessed.
Yet while new legislation appears complicated, it isn’t designed to be. Laws like the GDPR and EU-US Privacy Shield aren’t as hard to decipher and implement as some scaremongers suggest; brands simply need to take time to become familiar with their twists and turns. And with penalties of up to 4% of revenue to be levied, brands can’t start their preparations too soon. Indeed, despite the bad press about industry disagreement with new data rules, they present a wonderful opportunity for better data, advertising and customer communications.
The great war of personalisation versus privacy has been mis-sold. Thanks to persistent misconceptions, consumers have come to believe there can be no privacy with tailored ads. Now it’s time for brands to show the two are not mutually exclusive. By being transparent and communicating with consumers, brands can prove that two apparently sworn enemies are able to work together and produce a winning combination for consumers.
Max Pepe is marketing and innovation director at Mozoo