Why the Latest Facebook Alternative Won’t Bridge the Gap Between Personalization and Data Privacy

The customer journey certainly has evolved over the last 15 years going from static, one-dimensional encounters to dynamic, tailored experiences. What’s driving these relevant, highly valuable experiences is data – which is the core of my organization, a data-as-a-service (DaaS) company helping marketers provide those hyper-personalized experience. So, when new “zero-data” sharing social networks like Openbook pop up, I’m often asked about the use – and misuse – of data.

Many of us cringed when we heard personal information from almost 90 million Facebook users was compromised during the Cambridge Analytica data breach earlier this year. But are alternatives to Facebook – like Openbook, Diaspora, and Ello – the answer? As I see it, the real issue is the knowledge gap that exists between personalization and data privacy.

Openbook says it will ensure transparency about what data they collect while offering more personalization. But what do consumers really think about personalization and privacy? A report from Virent shows a conflict in understanding. Researchers surveyed more than 24,000 consumers about their data security and privacy concerns, exploring the relationship with personalization. As you might expect, the study found that nearly 9 out of 10 consumers are concerned about data security and privacy. But, the vast majority – 80 percent – still want personalized service.

Golden rule of data

Consumers clearly want the best of both worlds: personalized experiences and increased data privacy. It’s certainly not a new discussion. In 2015, Forrester released a report that evaluated how prepared marketers were to deliver impactful messages at the right time. The use of data as a solution surfaced as the report’s key findings.

But with great data comes great responsibility. I like to think about this as the “golden rule” for data: treat consumer data the way you would want your own data to be treated. The result is increased trust that builds between you and the consumer.

Responsible companies view both sides of the equation – as a business and a consumer. If the consumer wins, the company wins and stays out ahead of regulations. The most responsible companies collect the information they need to make their customers’ experiences better and commit to quality data compliance. We see it with the businesses we work with when we provide solutions to ensure their marketing adheres to consumer protection laws (e.g. the Telephone Consumer Protection Act). And many of us are dealing with it under the General Data Protection Regulation (GDPR) and the impending California Consumer Privacy Act of 2018 (CCPA).

Education and awareness

Regulations like GDPR and CCPA are intended to protect the consumer because the vast majority do not fully understand how their data is used. In fact, only 3 in 10 Americans understand how companies share their personal information, according to a National Cyber Security Alliance U.S. Consumer Privacy Index. Likewise, the business impact of consumers’ privacy concerns remains high with 89 percent avoiding companies they don’t believe protect their privacy.

Technology companies don’t communicate effectively about how data is used and the technology behind it. We need to help consumers understand their role in data privacy. They should know why and how to enable safeguards to limit or restrict data. Much of this can be found by reading the privacy and terms of use statements on each website but, as many of us know, these can be written in confusing legal language. Here’s how I explain it to my family and friends: Brands gather demographic, behavioral, and attitudinal information about you so they can send you the right thing at the right time.

  • Demographic data, which most understand, includes location, age, education, income, etc.
  • Behavioral data is based on the actions taken by the consumer and can include information such as how often a consumer visits a website, total time they spend researching options, and the number of forms they filled out online.
  • Attitudinal data is information about how a person feels toward a product, service, or their experience with a lender. This can include preferences on communication methods (e.g. text message, phone, email, hard copy).

The onus truly is on businesses to help the consumer make an informed choice. This goes back to my earlier statement on the “golden rule of data use,” businesses should be clear and transparent about their data privacy policies (use of information) for personalization (logging preferences to create a valuable experience) as well as how they protect the data to ensure it doesn’t fall into the wrong hands.

There shouldn’t be fear about data, but instead, education about responsible, effective use that enables personalization. When organizations hold themselves accountable, they build trust with the consumers leading to a more-rewarding customer journey with better results for the business.

 


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