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Tackling Data Privacy Issues in a Data-Driven Marketing World

Last updated: August 14, 2020

data privacy in marketing

Consumers are becoming increasingly aware – and increasingly uncomfortable – about data collection in their day-to-day lives. In fact, chances are you’re one of those consumers on your day off, with a survey finding that 97 percent of consumers are somewhat or very concerned about protecting their personal data. This widespread trepidation regarding the collection and utilization of consumer data is poised to change the world of marketing as we know it.

Marketers, There is No Post-COVID Era

Between legal initiatives like GDPR and offerings like Firefox providing enhanced data privacy for consumers, it’s clear that the heyday of endless granular consumer data is reaching its end. However, while almost every consumer is demanding more privacy, an entire 63 percent of consumers believe personalization should be standard when they’re being served or sent promotional offers. This has left marketers wondering how to meet consumer demands without access to a wealth of consumer data.

Thankfully, there are options available for data-driven marketers who want to respect data privacy while targeting their consumers at a hyper-segmented level. Let’s examine some of the challenges put forth by this new era of consumer privacy and uncover some guidance to help you overcome these challenges.

The Changing Landscape in Consumer Privacy

The data protection and privacy environment has shifted significantly in recent years. While some consumers and thought leaders have been discussing the importance of data privacy for a decade or longer, it wasn’t until 2016 that a set of data privacy regulations called GDPR was proposed in the European Union. When it was passed in 2018, organizations had to allow users in the EU to opt-in to the collection of personal data, which set off a range of similar regulations around the world. Later that year, the California Consumer Privacy Act (CCPA) was passed, detailing new privacy rights for consumers in the state of California.

Many of these regulations were propelled forward by a series of data privacy scandals that affected consumers, such as the infamous Cambridge Analytica incident. These events gave the wider population an idea of how their data was being stored and used in ways that they may not approve of, damaging consumer trust and prompting several companies to re-evaluate how they access, collect, store, and leverage consumer data. In recent years, the following companies have taken significant steps to limit access to consumer data:

  • Apple recently changed how they allow marketers to engage with user data, no longer allowing insights by device.
  • Firefox now blocks tracking cookies by default.
  • DuckDuckGo, a search engine that touts increased privacy for its users, has seen a 65 percent increase in traffic, with a large surge occurring near the year 2018.

increase in DuckDuckGo traffic due to data privacy

Source: https://duckduckgo.com/traffic

Organizations are beginning to feel the impact of this legal and cultural shift toward data privacy, with 97 percent of organizations planning to increase their spend on protecting consumer data. However, staying compliant and satisfying consumer demands is only one part of the story. Certain business functions are going to be challenged more than others by data privacy concerns – and marketing teams may be affected the most.

Why is Data Privacy Important for Marketers Today?

All of the changes regarding data privacy in recent years have hit marketing teams especially hard. According to recent research by Gartner, almost one out of five marketers report privacy compliance as their main concern across marketing channels. It’s no wonder why – this increased focus on privacy negatively impacts a marketer’s ability to collect and derive insights at a rapid pace, and even makes some of their previous marketing technology investments obsolete. In fact, 73 percent of marketers fear that privacy concerns will negatively impact their analytics efforts.

However, analytics is only half of it. Marketers are guardians and custodians of a business’s brand image, and ignoring these privacy concerns out of choice or necessity could negatively impact their brand value. Studies have found that misusing user data can have dire consequences for organizations, with about 8 out of 10 customers reporting that they’re willing to abandon a brand if their data is used without their knowledge. This has left marketers stuck between a rock and a hard place, with consumer opinions on one side, and analytical prowess on the other.

The Impact on Data-Driven Attribution Models

For years, marketers have grown accustomed to leveraging torrents of data to create marketing campaigns and target them toward the perfect audience. However, as consumers take their privacy more seriously, this torrent of data is starting to slow into a modest stream of data. While most marketers can still conduct business as usual with less data, many fear that it’s only a matter of time until that stream of data turns into an inconsistent trickle.

This has led many marketers to look to the past for guidance. Marketing has a long history of providing recommendations based on aggregate data, primarily through Marketing Mix Modeling (MMM). This form of analysis took aggregate data, typically from sources like media exposures, and combined it with KPIs such as sales conversions, store visits, or web visits. Unfortunately, many marketers that are experimenting with these tactics today will find it leaves a lot to be desired when compared to models that tracked individuals at a personal level.

One of the biggest drawbacks of MMM is that it treats all consumers as a monolith. In reality, everyone responds differently to various advertisements, and not all traffic is equally valuable. For instance, you may purchase a set of YouTube advertisements as well as a set of TV advertisements. When you compare the traffic generated by the two mediums, you find that the TV advertisements attracted more traffic – leading your team to invest more in TV. However, your team may have completely missed that viewers on YouTube have a higher lifetime value, and are more likely to convert in the first place. With marketers needing to juggle multiple campaigns across various channels and demographics, it’s easy to see how MMM is hardly practical.

How Marketers Can Move Forward

Marketers delegated analytical models like Marketing Mix Modeling to the realm of history for a reason – they needed a solution that can provide more precise insights. Although data privacy concerns are making it difficult for marketers to get a granular view of their data, it’s not impossible with the right attribution models and approach toward marketing analytics. Modern businesses need a marketing analytics solution that can use whatever data is available so they won’t lose access to relevant insights, and their current marketing framework won’t fall apart.

They need a solution that doesn’t need a wealth of data to function, but is also able to process large volumes of data whenever possible. Further, a future-proof solution needs to be able to distinguish causation versus correlation, even if the solution isn’t given large volumes of data. Combining both of these capabilities will help your organization keep pace with changing consumer attitudes.

At Marketing Evolution, we’ve been working to create a solution that can strike that balance with simplicity and grace. We understand that uncertainty is at an all-time high among consumers and marketers alike – and that’s why we’re offering marketing teams a free demo of our cutting-edge, flexible marketing analytics platform today. Click here to get started today.

Marketers, There is No Post-COVID Era

Written by Marketing Evolution