Becki Francis, Associate Director of Retail Strategy at Movable Ink
One could easily argue that privacy and personalisation are at odds. Back in the Wild West days of digital advertising when third-party cookies reigned supreme, consumers were inundated with ads on every platform based on every website they visited. While many ad tracking companies found success during this time, it was also a low trust era, where consumers were suspicious of brands and how marketers knew so much about a person’s online behaviours. With the introduction of governmental regulation (including GDPR and CCPA), consumers became more attuned to the insights marketers had into their behaviour and how that personal data was processed and leveraged.
Fast forward to today and what some are calling the ‘privacy renaissance’ is upon us. Infosec demands, consumer interest, and changing opinions in tech-sector boardrooms are coalescing to create a more secure, more private internet where consumer data protection is paramount.
Last year, Google announced that the company would eventually phase out third-party cookies on Chrome. More recently, Apple launched a new suite of privacy features including App Tracking Transparency (ATT), giving iPhone users the ability to block mobile apps from tracking their online movements, and Mail Privacy Protection (MPP), preventing “senders from using invisible pixels to collect information about the user”.
But increased calls for greater privacy come at a time when consumers are also demanding greater personalisation. In fact, according to Movable Ink’s “Audience of One” Research Report, more than half of consumers (54%) say a personalised customer experience or relevant communication is a critical characteristic of a company they trust. Two-thirds of consumers (68%) say that their loyalty to a brand hinges on whether the brand is actively engaging and building personal relationships with them.
To meet demands on all fronts, privacy and personalisation need to co-exist harmoniously. So how can marketers strike the right balance? Here are some of the ways brands can prepare for the new world where personalisation must coincide with greater privacy measures.
Prioritise Zero- and First-party data – and act on it
The death of the third-party cookie will further increase the value of zero and first-party data for marketers.
There is a subtle distinction between zero and first-party data. First-party data is produced as a direct result of interactions with a brand. A shopper puts a new dress in their virtual shopping cart then leaves the site, after which marketers create campaigns based on that first-party data to build abandoned cart personalisation aimed to persuade that shopper to return to the site and complete their purchase. Zero-party data is information that consumers actively hand over to brands in order to tailor their experience. For example, a shopper at a department store may complete a preference poll to confirm that they’re interested in womenswear or a furniture browser actively provides information regarding the room they’re currently decorating.
Both data sets are extremely valuable to digital marketers, especially in light of new privacy measures limiting access to third-party and contextual data. And brands are already taking note. According to Deloitte, 61% of high-growth brands said they are shifting to a first-party data strategy, while only 40% of negative-growth companies say the same.
Marketing teams already have a wealth of first-party data from sources such as email service providers (ESPs) and customer data platforms (CDPs). The key here is action: brands need to swiftly understand the data they hold, identify the customer experiences this data can power, and break down silos in order to deliver those experiences to personalisation-hungry customers.
Demonstrate a clear value exchange to build robust customer relationships
While first-party data alone can be categorised as extraordinarily beneficial, paired with zero-party data, it may be unstoppable. Blending zero-and first-party data meshes passive information with active. What was once an assumption about individual consumers is now a known reality, given that customers themselves are the ones volunteering that information.
To efficiently collect zero-party data, brands will need to offer a compelling value exchange, making the benefits of handing over additional information obvious to the customer. Consumers are more than happy to share data with a brand as long as it’s being used to benefit them. Many brands are leaning into value propositions like loyalty programs to offer points and rewards in return for profile completion and preference data. Instead of creating lengthy preference centres, you can pepper questions throughout the buying journey to encourage greater sharing of data and prevent any barriers to account creation or conversion.
Be transparent and accurate
What consumers are looking for is more transparency and relevancy. After all, that’s what the best relationships are made of. Brands should be clear about why they are asking consumers for their data and what they will use it for.
Accuracy is also crucial; one in four consumers report that they would unsubscribe from emails when personalisation from a brand is wrong. Ensure that data is accurate, that consumers have an easy means of updating their preferences and that this data is leveraged in useful ways.
Against an ever-changing backdrop, personalisation, when done right, is the proverbial golden ticket. It’s up to marketers to deliver ROI-driving campaigns within the parameters set by businesses, regulators, and consumers. To do so, brands will need to prioritise their data-driven efforts and build personal connections with each customer to drive loyalty, trust, and strategic business outcomes.
