Consumers are more concerned about data privacy than ever. Through data breaches, legislation changes and shifts in technology, consumers have learned the importance of keeping their data safe and they’re short on patience for companies that don’t respect their security. Privacy has become even more important since the onset of the pandemic, which has shifted content consumption to even more digital channels where consumer data can be collected and leveraged for ad revenue.
As consumers have become more focused on privacy, it’s become time for brands to emphasize how—and how well—they keep their customers’ information safe. This trend isn’t going anywhere, as major companies like Apple and Google tout the newest data protection measures, giving customers the option to deny apps the ability to track their location and other personal information.
According to a McKinsey survey, three in 10 US internet users utilize ad-blocking software to prevent companies from tracking their online behavior. Furthermore, 87 percent of survey participants said they wouldn’t do business with an organization if they were worried about the company’s security practices, and 71 percent said they would stop working with a company altogether if they found out the company had given away their private data without their express permission.
The numbers speak for themselves—data privacy isn’t optional anymore, and if companies treat customers’ privacy lightly, they’re going to lose them. Instead, by prioritizing security, organizations can build brand trust and improve relationships with valued consumers, a business proposition that’s good for everyone.
Consumers are becoming hyper aware of how they’re being tracked
Data privacy has taken on a more prominent role across the globe in both the private and public sectors. In response to consumer demand as well as recognizing the threat of breaches to government institutions, legislators have brought forth regulations to increase digital security. From the California Consumer Privacy Act (CCPA) to the General Data Protection Regulation (GDPR) in Europe, the emphasis on privacy is growing.
Alongside facing data breaches, the regulations have brought even more consumer attention to the issue. This has created a growing segment of the population that is hyper-aware that they’re being tracked and is increasingly paying attention to what companies are doing with their data and whether a company can be trusted to hold onto sensitive information.
So far, many companies have yet to earn their customers’ trust. The same McKinsey survey showed the greatest consumer trust in healthcare and financial services companies—with just 44 percent saying they trusted these companies with data management. Other sectors fare far worse— just 10 percent of consumers claimed they trusted media companies and similar percentages were present when asked about consumer-packaged-goods and technology industries.
While trust is low, demands are high and growing in importance. Around 68 percent of internet users said it was very important for the contents of their email to remain strictly private. For example, while more than half said the same of their location data, the contents of their downloaded files, the identities of their email correspondents and their usage of online chat rooms and groups.
As companies struggle to satisfy consumer demands for privacy, though, an opportunity is emerging for organizations to prioritize data privacy and overall online security.
The rise of data consent
It wasn’t long ago that marketers and product designers were focused almost exclusively on increasing the dimensions and types of data that could be applied to target new customers, guide the customer journey and measure success. Now, as consumers demand that their privacy be considered first, companies will have to shift gears to not just track but to connect with their customers in order to build trust in how they protect and make use of data.
It may make our jobs more difficult, but it also presents an opportunity for companies to connect with consumers in ways that more naturally align with the depth of the relationship that they have with a particular customer. Brands that realign their goals around privacy at every stage of the marketing funnel will find greater success in finding consumers who willingly opt-in to take advantage of better user experiences.
Designing for privacy and progressively applying data are already leading to changes in the advertising ecosystem. As pervasive tracking and traditional forms of identity such as cookies fade, consent absolutely will form the foundation for targeting and cross-channel measurement moving forward. There’s no perfectly plotted out path but it will certainly lead to a more creative future of advertising to reach consumers and gain their trust. Companies will need to address these changes with conviction, forward-thinking and a dedication to customer privacy in a world in which customers work, shop and communicate online every day.
Putting consent back into consumer hands
While data privacy is of the utmost importance, that same data remains a key driver for growth and brands and organizations that use data efficiently to inform business decisions will emerge as industry leaders.
Herein lies the privacy paradox—consumers engage more deeply with content that reflects their interests and behaviors but are uncomfortable with the privacy implications of sharing their data. To address this problem, companies should solve for trust, focusing on consent and prioritizing transparency, context and empathy.
Organizations should bring transparency to operations through options for consumers like opt-in consent or proper notice and opt-outs to comply with privacy regulations. Organizations should be clear to consumers about data collection practices, which will increase brand trust and foster positive relationships with target audiences.
Context is equally important—companies should explain to customers the data they would like to collect, how that data will be protected and how providing that information will help improve the customer experience. Customers want a secure, positive, tailored experience, and by providing context to consumers, brands may be pleasantly surprised by how many consumers choose to opt in, instead of opt out, of data collection.
Empathy is also key. No one wants their personal data used in ways that make them feel violated or out of control, and certainly no one wants their data leaked to hackers who can cause serious damage. Organizations can help gain consumer trust by approaching data privacy through empathy, truly making sure they serve as a good steward of the data customers share by putting stringent security measures in place.
Empathy requires more than just lip service, and with something as important as data privacy, consumers want to see companies putting tangible measures in place to protect their information each day. It’s vital to lean into privacy preserving technologies such as secure multiparty computation and clean rooms that allow companies to accomplish personalization and measurement objectives without directly sharing customer data.
It’s also important to focus on programs to help comply with consumer privacy regulations to responsibly and securely collect, handle and maintain personal data. With these measures in place, as well as a focus on respect for customer data and an acknowledgment that privacy is top of mind for consumers, companies can build brand trust and foster positive relationships with the customers that make business possible.