Where do marketers draw the line on data targeting as privacy concerns grow?
In a more closed environment for consumer information, brands may need to double down on first-party data.
Ever since revelations surfaced that data from an estimated 87 million Facebook users were passed on to research firm Cambridge Analytica, nervous marketers are wondering how to reduce their chance of running afoul of regulators, consumers and privacy advocates, including by minimizing their exposure to data that is typically used for creating personalized experiences.
Despite the promises of data to enhance marketing, embracing information gathered online about consumers has come with a lot of headaches for marketers, a fact causing some to view data as one of the most difficult tasks they need to master. The impending May 25 GDPR deadline and Facebook's data scandal have only heightened marketers' concerns while also raising the possibility that stricter permission requirements could mean less access to data.
In this environment, marketers seeking a "minimum viable" data set should carefully consider how targeted they want to be and how important new customer acquisition is to them. While consumers increasingly demand personalization, which requires data, there are concerns that a brand might overstep by being so personalized that consumers wonder if they're being spied upon. There is evidence that consumers already don't trust brands with their personal information, so getting data right is important.
"Anytime something like this happens, there's this rush and knee-jerk reaction that all tracking is bad and we shouldn't be using it," Stephen Boidock, director of marketing and business development at Austin, Tex.-based Drumroll told Marketing Dive. "That's throwing the baby out with the bath water.
"Then you look at it and realize some of our best experiences come from tracking," he added, citing recommendation engines on services like Spotify or the ability of Netflix to let users come back to a program at the exact moment they’d stopped watching. "The big question is whether there's anything we're using right now that's going to be broken by the removal of certain permissions."
Amid its recent hearings with the U.S. Congress, Facebook announced it would shut down its Partner Categories program, whereby brands could use information from third-party data brokers such as Acxiom to target ads to prospective new customers across its social network. Facebook shutting down Partner Categories means that brands won't be able to use data on how customers have behaved on websites outside of Facebook, Boidock explained.
Facebook's controversial decision to close Partner Categories has "created a couple of conversations" with clients, Boidock noted. Most of the agency's clients have a good sense of how their first-party data is being used and are focusing their efforts there, rather than getting third-party data through Facebook and its partners, he added.
A dearth of third-party data, which is often used for large-scale new customer acquisition campaigns, is likely to hit some marketers harder than others. Movie studios, for instance, rely on this data when they're promoting a new film as do car dealerships that want to know who might be interested in leasing a new vehicle.
In the wake of the Facebook scandal, the possibility of U.S. legislators taking action in digital marketing also seems more likely than ever, suggesting the days of working with a relative degree of autonomy in the space are coming to an end, said Jesse Math, PMX Agency's group director of display and social media.
"I think that the politicians are definitely sensing political opportunity (to legislate), whether it's right or wrong. It's not enough the Senate is going to say 'We're happy to do nothing here,'" Math told Marketing Dive. "We are anticipating changes. We just have no idea what those changes will be."
The new, more closed environment for marketing data means brands will need to "double down" on getting information directly from their target audiences, Math said. For example, some brands have developed in-house e-commerce strategies to gain better insights into their customers.
A shifting environment
Beyond traditional advertising, data is also potentially the bedrock of next-generation connected experiences. At Franklin, Mass.-based Interactions LLC, for instance, the focus is on building "intelligent virtual assistants," which offer a more human-like version of the traditional chatbots used by hotels and other companies.
Intelligent virtual assistants need to blend both artificial intelligence technology along with human intervention to ensure a brand doesn't overstep and behaves in a way that is helpful rather than creepy, said Jane Price, Interaction's senior vice president of marketing.
She calls this "conversational design." The approach could be as simple as only using the email address of customers that have already established an account with a company, rather than using an address somehow obtained through a third party.
"There's kind of an if/then [aspect] to it," Price said. "There should be the knowledge that I’ve shared this information and delivered it to you for a purpose."
No matter what the data-driven brand experience, marketers need to base their strategy on three pillars: transparency, education and permission, according to Boidock. This means honestly communicating what's being tracked now and could be tracked in the future. Educating consumers about what data is being collected and why is always important but becomes even more so as new regulations and other evolutions come into play.
"Education is a big one — this is a step that a lot of people miss," Boidock said.