Digital advertising has traditionally relied on practices that are fundamentally at odds with the notion of privacy. The sharing of customer data across a vast ecosystem of third parties, for example, became commonplace based on the belief that this was the only way to derive value from this data.
While attitudes have started to change, many organizations still treat privacy as if it were an albatross around their neck. Legislation such as the CCPA in the U.S. and the GDPR in Europe is viewed in some quarters as a hindrance to targeting and measurement efforts, and it’s an outlook that needs to change.
In reality, brands that can turn privacy into an asset will breathe new life into their customer relationships and nurture greater creativity and innovation. The business case for greater privacy protection is compelling, and all forward-looking organizations should be seeking to leverage it to their advantage rather than seeing it as a restriction.
Building consumer trust through privacy
While industry insiders have been discussing third-party cookies and device IDs for a long time, consumer awareness of how personal information is collected and used by businesses is also at an all-time high. More than two-thirds say they are more vigilant about their data than ever before, and in response, more brands and media owners are prioritizing data privacy and protection.
But there’s a big difference between boosting privacy initiatives because you have to and doing it because it’s the right thing to do. Digital giants Apple and Google have already shown they are serious about protecting their consumers with privacy features built into iOS and Android respectively. A half-hearted approach won’t wash; every organization needs to have a strong message on how they keep customer data private and why they collect it in the first place.
First-party data collected directly from consenting consumers is the Holy Grail for businesses that want to increase relevance in a completely transparent way. By taking a clear position on how they are collecting, managing, and using customer data, they can realize a virtuous cycle that strengthens customer relationships.
This process begins by demonstrating the value of collecting the data in the first place by delivering personalized recommendations, advertising, and products. This builds a level of trust so that the customer recognizes the value exchange and is happy to share more information.
The additional data enables the business to measure the effectiveness of the content they are delivering, providing them with a strong signal that can help them improve future campaigns. Without a coherent framework around how data privacy and security is protected, however, this isn’t possible.
Mitigating legal and reputational risks
Consumer awareness isn’t the only factor driving organizations to level up their privacy game. The regulatory landscape around data privacy has moved quickly in recent years. According to forecasts from Gartner, 75 percent of the world’s population will have its personal data covered under modern privacy legislation by 2024. Brands that don’t keep up with the changes could find themselves in a difficult situation both legally and financially.
TikTok’s recent £12.7 million fine from the UK Information Commissioner’s Office (ICO) for failing to protect children’s data is the perfect illustration of the heavy penalties faced by those falling afoul of such regulations. Along with being hit hard in the pocket, TikTok also had to endure the negative publicity resulting from this case; the potential loss of consumer trust, as a result, could prove more costly than the fine.
While there are many legal and financial risks to navigate around the issue of privacy, they all lead back to the same place: reputation. And reputation is something money can’t buy; it must be earned.
The business case for privacy
By building privacy into their core value proposition, brands can not only build stronger relationships with customers and mitigate reputational risk but also deliver greater innovation and creativity.
I’ve mentioned above the need for businesses to focus on building their first-party data assets in a transparent and sustainable way. First-party data provides valuable insight into current and prospective customers and a critical competitive advantage to maximize planning, activation, and measurement performance.
To augment this, organizations also need to develop better working partnerships. Rather than sharing customer data indiscriminately throughout the ecosystem, as they might have done in the past, advertisers should be thinking very carefully about how they collaborate and who they collaborate with. Technologies such as Unified ID 2.0 are examples of companies innovating to help prioritize privacy, do better by the consumer, and address the gaps left by cookie deprecation.
Brands can partner with media companies to provide direct access to their target audience profile as well as data partners that offer valuable data enrichment opportunities. And privacy should be at the heart of these collaborations. A good example of this is automotive brand Renault, which collaborated with German media group Axel Springer All Media (ASAM) to generate insights based on Renault’s first-party data and ASAM’s audience data. By utilizing a data clean room, no data was shared or commingled, with each company retaining full control of its own dataset. As a result, Renault improved its conversion rates by 18 percent compared to a control campaign based on third-party cookies that it ran in tandem.
Privacy doesn’t stand in your way
Adopting a forward-thinking attitude toward privacy means brands can be more creative with campaigns that push further with greater impact. By increasing transparency and trust with their customers, brands can understand their audiences more deeply and deliver better campaigns.
Organizations should stop thinking about privacy as something that stands in the way of effectively targeting their audience, and instead see it as something that adds tangible value to their business.
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.