As consumers, we’ve all experienced fear about big data and its apparent ambivalence to privacy. Frightening headlines like “What Your Fitness App Knows About You” are pervasive. All companies interfacing with sensitive consumer information have the responsibility to dispel this understandable trepidation.
The prevalence of careless and ambiguous data collection and increasing public awareness of misuse have led many consumers to believe that data collection is inherently unethical. Yes, there are many examples of unethical data handling. However, I believe there is a correct way — AKA, a secure, confidential and compliant way — to collect consumer data. It requires businesses to focus on solving technically complex and often neglected challenges such as consent enforcement and secure data processing infrastructure.
Consent is key to ethical collection
The General Data Protection Regulation Act (GDPR) and California Consumer Privacy Act (CCPA) delineate numerous protections for consumer privacy. Both acts stipulate that consumer data should be collected transparently and fairly, with advance notices provided to consumers about the intent of data collection.
As a result of this legislation, companies operating in the U.S. and the EU must uphold a minimum level of respect for consumer privacy. Otherwise, they risk incurring steep penalties. (Last year, Google settled a $5 billion lawsuit for allegedly misleading consumers into believing “incognito” mode data would remain confidential and never be tracked. This lawsuit evidences the weight that consumer perceptions carry when it comes to data privacy law.)
Yet I believe industry leaders must take one step further and question the ethics of data collection beyond mere compliance.
According to Pew Research, eight in 10 consumers are concerned about how companies use their data, and 67% don’t understand how companies use the data they collect — period. Clearly, the status quo of data collection is leaving many consumers in the dark. This level of obfuscation is simply unnecessary. Most customers are willing to provide personal information upfront in exchange for more personalized customer journeys.
Longstanding privacy research helmed by industry expert Alan Westin sorts consumers into three categories:
- Privacy fundamentalists — individuals who highly value their privacy and typically restrict government and commercial use of their data.
- Privacy unconcerned — individuals willing to share personal information when prompted, with little to no incentive.
- Privacy pragmatists — individuals who will share information if they receive something in return (for example, coupons, discounts, early access to sales).
As of 2019, nearly 70% of online consumers fall into the latter two categories. These digital consumers are willing to share their data, especially when companies are forthcoming about how it will be used.
Marketers must develop a data use case that benefits the company and the customer. Common consumer data-sharing benefits include enhanced personalization, better research and development, improved inventory management and real-time tracking (for instance, with mapping apps like Waze). Building an argument for the utility of these benefits demonstrates that an organization is committed to transparency. Moreover, it demonstrates a company’s dedication to transparency.
Consumers cannot make advantageous data decisions if organizations neglect to provide upfront information about their data use policies — or worse, fail to obtain and enforce customer consent for collection in the first place.
How to maintain trust as an organization
Consensual data collection should be priority No. 1 for digital marketers and advertisers. However, maintaining trust with consumers requires more legwork than just transparency. Other actions to take include:
- Prioritizing outstanding data governance. As soon as data transfers from Organization A to Organization B, it becomes the responsibility of Organization B to protect that data in observance of regulations like GDPR and CCPA. Therefore, it is in Organization A’s best interest to (1) only share data with organizations and third-party tools they trust and (2) ensure these partners adhere to all relevant regulations — no exceptions.
Downstream data breaches can become a significant problem for organizations that share data, especially when shared data includes personally identifiable information (PII) — as is the case for most consumer data.
- Considering real-time behavioral data. First-party data — that is, information collected directly from consumers via inline interactions and transactions — offers unparalleled control and transparency. It is more reliable and accurate because it becomes actionable quicker than third-party data sources. Real-time data enables marketers to reach their target audiences much more quickly when they’re motivated to purchase.
Furthermore, by relying on cross-domain tracking and server-side tagging, marketers can collect first-party data free of PII. By instead tagging customers with unique but anonymous IDs, marketers can bolster data privacy while equally improving their ability to provide hyper-relevant and timely ads.
- Avoiding consumer alarm. Data collection is necessary, but it’s equally necessary to remain transparent about what data is used for — and why. Additionally, trust and verify that third parties enforce similarly robust data protection policies. Otherwise, companies risk alienating consumers with unexpected revelations related to data collection — or, potentially worse, exposing customer data to a breach.
- Enforcing consumer consent. It’s one thing to collect consumer consent and another to enforce those decisions proactively. Once a customer has flagged their consent preferences, organizations must take steps to ensure that the consumer’s data is respected as directed. By enforcing consent at the moment of collection, organizations ensure they comply with all relevant regulations and respect their customer’s preferences.
Viewing data privacy as a positive
Marketers often view regulations like GDPR and CCPA as hoops to jump through on the journey toward personalization. Let’s reframe that narrative by interrogating what consumers value most in the digital economy: trust.
Organizations that responsibly and transparently handle data set themselves apart. They signal to discerning online consumers that customer loyalty and safety remain a priority. That’s critical because 71% of consumers say they won’t buy from companies that lose their trust. In other words, trust is currency — and a leading approach to data privacy is the business for earning that currency.
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ABOUT THE AUTHOR
Greg Brunk, Head of Product at MetaRouter
As MetaRouter’s Head of Product, Greg leads our team in setting the strategy and building out our Customer Data Infrastructure platform. Greg has a diverse and rich history in leadership, driving innovation through product in several industries. He is now blazing a trail in the marketing, advertising, and data space. He is well-connected with the industry’s emerging trends and is deeply involved with MetaRouter’s sales, CX, and partnership teams.