In a recent op-ed, LiveRamp CEO Scott Howe covered how marketers needed to discern the right tools for their jobs in an ever-shifting landscape, citing trusted, transparent value exchanges as one of the main ingredients for building reliable first-party data.
In a time when the ad industry is approaching a consumer-trust debt ceiling, these value exchanges will be key to steering the industry back toward safety.
Just as a debt ceiling represents when a financial system can no longer function, I see the consumer-trust debt ceiling as the limit where companies involved in the digital advertising ecosystem can no longer function due to the historic and widespread absence of consumer trust.
Now is the time to restore that trust. Simply put, advertising is enormously beneficial for consumers. Never before has so much information and content been so freely available. The internet has revolutionized the consumer experience and given incalculable value to consumers. There is a cost to all of that information and content, though. Journalism, data centers, and video content are not free, and that cost is paid through advertising.
It’s time for companies to begin having this open dialogue with consumers and to help them understand what a transparent value exchange can look like.
Revisiting value exchanges
As a quick refresher, value exchanges are as advertised — consumers will exchange their data for valuable experiences, but they need to know what’s in it for them. These value exchanges are trusted, meaning that they are with the publishers or marketers themselves, and they are transparent, meaning that consumers understand what their data will be used for in exchange for the value provided. The value exchange always existed with cookies, but consumers were not able to easily understand it.
Each value exchange is an opportunity to continue building a first-party relationship, and so companies must deliver valuable experiences across all interactions. Newsletters, text messages, and premium services are all examples of value exchanges, and consumers authenticating to access these services are building deeper relationships with companies.
Regulations turn up the pressure in 2023
In 2023, consumers will continue to express their preferences for brands that give them control over, and protect, their information and privacy. These consumer preferences also influence the ecosystem through the wills of tech giants, as these companies exert their gravitational pull to advance privacy-centric agendas, which in turn affect how downstream ecosystem players plan their marketing. Brands must cater to these preferences or get left by the wayside, and value exchanges help signal to consumers that we’re respecting their preferences, and can help them differentiate good actors from the bad.
Consumer preferences and the need for value exchanges also echo the global privacy regulations taking effect. In the U.S. alone, five states will have pivotal consumer privacy legislation coming into effect in 2023, forcing marketers to reevaluate their solutions to ensure they are compliant. This echoes the global landscape: Marketers across the world have to process how the new landscape affects their responsibilities every day.
A lot is at stake. Running afoul of regulators, or even contradicting the spirit of the law in markets, will put brands’ reputations at risk and can erode consumer trust even further, exacerbating the consumer trust debt ceiling. Trusted, transparent value exchanges are a well-suited salve for marketer concerns here. By definition, they involve authenticated consumers sharing their information; the resulting first-party data can then be tightly controlled by marketers and publishers, limiting the amount of risk.
Now is the time to rebuild consumer trust
In order to help not just your company but also the broader industry ease away from the consumer-trust debt ceiling, you should engage in trusted, transparent value exchanges with consumers, and give them control over their information and privacy. Most importantly, while value exchanges address both regulatory pressures and underlying consumer preferences, they also give companies a starting point for creating lasting, valuable relationships with customers, and building the first-party data that helps drive powerhouse marketing.
As companies increasingly adopt customer intelligence as a priority and tool, first-party data will be the building block that makes this possible. Furthermore, before companies can begin realizing the higher-level benefits of a first-party data strategy, such as data collaboration, they must first ensure their own relationships with their customers are solid, and that they’ve made their plans for the data — and stewardship of said data — transparent.
As value exchanges help rebuild consumer trust and reclaim the ecosystem from the consumer-trust debt ceiling, they bring your company closer to the consumer, and create lasting customer relationships that drive sustainable revenue.
The views and opinions contained in this op-ed represent the views and opinions of the authors and do not represent the views or opinions of The Current nor of The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk of the content.