Consumers are becoming increasingly aware of how organizations are collecting and sharing their data. With the entire world connected through technology, consumers’ information is readily available for collecting. However, savvy consumers are demanding increased privacy and tighter restrictions on data control. At the same time, they also expect highly personalized brand interactions and individualized recommendations.
For businesses, data collection and analysis is the driving force behind their success. Access to consumer data allows for them to create these tailor-made experiences that consumers are demanding—more than ever before. These digital footprints offer excellent marketing opportunities for segmenting and targeting audiences.
So the real question is, can privacy and personalization exist together?
Any digital action Internet users take today – from logging into social media accounts, subscribing to a brand’s newsletter, to using their credit card online – creates data that is stored by companies and other organizations. Unfortunately, consumer data that is stored in this way sometimes attracts opportunities for theft or misuse, as has been shown by numerous data breaches around the world. This could explain why about 50% of Americans in a study by the Pew Research Center believe that their personal data is less secure today than it was only five years ago.
While consumers continually take advantage of the many benefits and comforts advanced technology provides, they are also aware that companies capture their digital data footprints for marketing purposes. More than 70% of Americans report feeling that their online actions or smartphone use is tracked by marketers or technology companies. Overall, many consumers think that using their data for marketing purposes without their consent is a privacy violation.
The amount of private consumer data that is collected is astronomical, and so the need to protect it has consequently become more important. Data privacy denotes protecting personally identifiable information about an individual, including their name, physical and email addresses, ID numbers, phone numbers, photos, date of birth, and more.
Data privacy protection is becoming a much bigger priority for individuals, organizations, and governments alike. There are data privacy laws by country that set some standards for the use of personal information for global marketers. For businesses across the world, however, the General Data Protection Regulation (GDPR) is a robust data privacy law created by the European Union to give control to individuals over their own personal data.
As governments take steps towards working to make the protection of data privacy rights more regulated, companies are having to re-evaluate how they track, collect, store, and process personal data.
Despite broad concerns about data collection and use by companies and the government, many consumers say it is acceptable for data to be used in certain ways. Ultimately, they want personalized experiences and offerings—and many get frustrated when business communications are impersonal. That being said, customers are willing to consent to an exchange of valuable customer data that organizations require to receive these types of experiences.
Seth Godin, a famous marketer, calls this exchange permission marketing. “Permission marketing is the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them” (Permission Marketing, Seth Godin). This marketing technique is centred around any direct marketing activities that the consumer has consented to. It is a value exchange, allowing brands to leverage highly protected data.
Permission marketing has removed the need for brands and marketers to walk the fine line between personalization and respecting consumer privacy. How is this possible? Through zero-party data.
To find out more about how your company can implement permission marketing campaigns powered by zero-party data, click here.
Experienced marketers are turning to zero-party data (ZPD) to build trust while maintaining high levels of personalization. ZPD refers to specific data that customers willingly and directly share with your brand through ongoing engagement and interactions. It can include your customers’ preferences, personal information, purchase intentions, and any other data regarding how they want your brand to recognize and acknowledge them.
When effecting personalization, it’s imperative that marketers start with what the consumer wants. Zero-party data comes in handy in providing marketers with the ability to do just that by allowing the consumer to tell them exactly what they want directly. Unlike first-party data that is owned by the company that collects it, ZPD is owned by the consumer. What this means is that consumers won’t feel intruded upon when they are the ones in control of how their data is being used. In its core, ZPD inspires consumer’s privacy and value.
With zero-party data, marketers are armed with a dataset where consumers have given consent, which will neutralize most of the challenges that could arise regarding general data privacy concerns. The result is that brands become empowered to build direct relationships with customers for better-personalized marketing efforts, services, and product recommendations.
The power in zero-party data and permission marketing is that by offering some form of value exchange, your customers will willingly provide you with the data you require. They’ll tell you directly what products or services they desire and what motivates them to make purchases.
Additionally, companies can leverage ZPD to transform consumer privacy and enhance personalization in user experiences. Some of the savviest companies are already maximizing their use of zero-party data. One example is Mediahuis—one of the largest publishers in Europe—that has built a considerable base of 4.4 million users. Mediahuis has been able to collect zero- and first-party data to create substantial, audience-based advertising campaigns across the Netherlands and Belgium. The result is that their audience campaigns rose to 27% of total ad revenue, with click-through rates 26% higher than non-targeted campaigns.