Privacy Vs. personalisation: brands and media owners debate a better plan for data-for-service

The wave of alarm over cyber-security has piqued global public interest in how personal data is stored, forcing brands and media owners to question their data-for-service exchange policies.

Another week, another cyber-attack. Thefts of customer data are becoming more commonplace at a time when businesses, and in particular marketers, are increasingly reliant on that data.

Ashley Madison, Sony, Target and JP Morgan are just some of the companies that have been hacked over the last two years and cybersecurity experts warn executives to prepare for more attacks.

It’s scary stuff for businesses and consumers alike. But the damage of inevitable attacks or systems failures to a brand can be mitigated somewhat if people experience the value exchange of trading their data. Consumers in the UK understand the value of their personal information to companies, according to an Aimia global study of 20,000, with 71 per cent ranking their data as valuable, and 30 per cent ranking it as highly valuable. Almost half (48 per cent) said they will share their personal information to get better offers and rewards.

And yet advertisers and media owners are failing to fully capitalise on these opportunities. A myriad of issues ranging from data transparency concerns to debates over self-regulation and privacy tools are stunting progress though the prospect of a single data protection directive across the European Union could bring clarity to some of the cloudier aspects of data privacy. Advertisers and technology firms have done lots to erode peoples’ trust over the years, and yet there's a growing acceptance from the former that more honesty is needed over just how valuable personal information actually is.

“There has to be a deeper value exchange between consumer and a brand or a media owner otherwise we’re going to have to pay hundreds of pounds just to access what we currently do today,” said AOL UK’s managing director Hamish Nicklin at an event hosted by agency Brave. “Once we get better at understanding that value exchange then advertisers, media owners and technology platforms can get better at adding value to each other’s work. It’s incredibly important because at the moment we’re not giving something back to the user.”

For Google, this trade-off revolves around making its personalised services more suggestive and rather than responsive to queries. The online business, which is at the centre of a long-running antitrust European Union investigation, has been criticised by some digital observers for how it, along with peers like Facebook, are using personal data to extend their dominance in international markets. To prove otherwise and try and use privacy as a brand differentiator, Google has told every single one of its users in Europe, Middle East and Asia how much data it is collecting and outlined the reasons why via privacy hub called My Account. People can also choose whether to tweak their security settings for everyday Google tasks more clearly, including blocking ads from specific advertisers appearing next to search results as well as setting what personal details are linked to their Google account.

“Brands have to work twice as hard to earn the trust and respect of people,” said former head of marketing at Addison Lee and agency executive Nick Constantinou. Speaking to The Drum about the Ashley Madison cyber attack last month, he said people would accept their behavioural data being used if the service offered to them is relevant and secure.

“People have to sift through too much spam, “ added Constantinou. “Seeing an untargeted message that means nothing to me is more annoying than having two messages twice a week that are absolutely relevant to my lifestyle.”

It’s marketing 101 stuff. If a brand wants to gain and nurture valuable relationships, they must show customers respect and therefore show their data respect. It’s when businesses focus solely on their own commercial ambitions over customer needs that the line tends to get crossed. There are some brands (along with their agencies) working hard to clarify that blurred line between privacy and personalisation as they look to push their marketing budgets harder.

“Saying ‘Trust me’ is the worst way to gain trust,” said Blippar’s global president of marketing Omaid Hiwaizi. “It’s how brands act which will create trust, not how they promote it.”

It’s an approach the business regards highly in its transformation into a universal visual search engine that complements the text-based offerings from Google and Bing. Blippar has spent a big part of 2015 working behind the scenes to educate advertisers as to why they should be using its behaviour data rather than demographic insights in order to make this a reality.

“The value exchange defines what’s OK, but as time goes on people will have greater understanding of the value in their data,” added Hiwaizi. “Over time people will become more adept at mashing their own data sets to extract value and improve their lives – helping in this gives brands huge role ongoing.”

More than 75 per cent of UK consumers are willing to share key pieces of personal information with brands, according to Aimia. Yet only 7 per cent of UK consumers feel as though they are actually receiving better offers from companies as a result of sharing their details. The responses highlight what some agencies feel is wariness from marketers to move beyond one-size fits all offerings that simply match promotional calendars or bombard the customer with offers similar to the last. Instead, every communication should be framed by the anticipation of what the individual customer will actually want next.

“It’s also important to make a distinction between machine-driven data personalisation and emotive or needs-driven personalisation,” said Claire Aldous, data strategy and innovation partner, at CRM specialist partner at Proximity London. “The latter involves a human intervention. You need to understand why customers make the decisions they come to, not just identify the decisions themselves.”

David Lloyd, head of data strategy and insight at Wunderman, argued that there’s a spectrum to the value exchange. “Some brands may have genuinely strong content or functionality that people will pay for or is freely accessible but funded by advertising,” he adds. “Others, like many loyalty programmes, will give more cash-related incentives such as money-off. So this already happens, though perhaps in less overt terms as brands accessing some sort of ‘data exchange’ where consumers can directly trade their own data.”

The danger is that the surge in cyber-attacks sparks a kneejerk reaction from regulators and governments worldwide that could scare brands into curbing some of their more progressive data strategies. European governments are working on an EU-wide data privacy law that will likely bring tough legislation on how technology companies can use personal data by the end of the year.

Oliver Bridge, founder of men’s grooming products retailer Cornerstone, said it's the responsibility of all quarters of the advertising industry to show consumers and regulators that personal data will be used responsibly. People are ambivalent to how their data is used - that is until a hack happens, he added. The retailer, which does not store any credit information and is working with digital agency 383 to develop more personalised campaigns, has strict rules on what data it shares with third parties and Bridge thinks companies need to think beyond the obvious - credit card numbers, patient health information and government secrets - to really consider how data can be valuable in the hands of the wrong person.

Nearly two-thirds (63 per cent) of C-suite executives report that their companies experience significant cyber-attacks daily or weekly; however, only 25 per cent of them said their organisation always incorporates countermeasures into the design of their company’s technology and operating models to make them more resilient, according to an Accenture study of 959 respondents.

It’s just a fact of life – platforms already understand our preferences better than we do - particularly content and what we buy. As the data collected becomes more intimate, enabled by wearables, marketers will be able to pre-empt our needs, wants and thoughts. It’s up to brands to use this in ways that are primarily in the consumers’ interests.

“Even with these added layers of analysis and real-time responses, brands are still struggling to make the most of the data available to them,” said Brave's managing director Ash Bendelow, “However it’s not the limitation of the technology that we have to worry about. It’s the tension between consumer paranoia and the brand opportunity.”