Working woman using laptop to e-shop showing the new consumer privacy concerns over personalized marketing
Personalized Marketing Faces New Consumer Privacy Concerns by Nicole Lindsey

Personalized Marketing Faces New Consumer Privacy Concerns

Within the world of digital marketing, one of the hottest trends being embraced by marketers both small and large is personalized marketing. The idea is simple: customers will be more willing to open your emails, read your content, or engage with your brand if every aspect of the customer experience has been personalized. That approach might have worked a year ago, but now the whole personalized marketing trend is getting a privacy blowback. A new GetApp survey, for example, found that 91% of consumers believe that ads know too much personal information about them.

The case against personalized marketing

And, indeed, it can be a bit creepy when certain ads seem to follow you around the Internet, wherever you go. And so many brands have jumped aboard the personalized marketing bandwagon at this point that it’s no longer novel or unique when you receive an email marketing message from a brand with your name in the subject heading. The problem, quite simply, is that brands might have gone overboard with the whole personalized marketing trend. Instead of picking and choosing where they send out personalized marketing messages, they are rushing to integrate some form of personalization at every customer touch point.

As the findings from the GetApp survey show, 95% of people believe that they are being tracked online based on past purchase history. And nearly one-half of consumers have been shown ads for products that they never searched for online, but mentioned to their friends or colleagues offline. If there’s one figure from the GetApp survey that stands out, it’s this one. We’ve all heard the stories about people’s smartphones or smart home devices “accidentally” recording conversations and then reporting those conversations or other personal information to third parties.

Of course, there might be an innocent explanation for the ability of brands to serve up ads for products you’ve never searched for online. One reason might be the popularity of predictive analytics. The goal of predictive analytics is to predict what a customer wants before the customer knows that he or she wants it. The only way to do that, though, is to collect so much data about an individual customer that you can literally predict what he or she will be asking for next. Presumably, companies like Amazon or Netflix – which have both created highly effective recommendation engines based on personalized marketing data – are getting close to this point. If Amazon knows that you order a new book at the end of every month, it can start to offer you some book recommendations at just the right moment when you might be “primed” for a purchase.

In general, though, people are looking for ways to avoid data personalization. According to GetApp, for example, 52% of consumers have used ad blockers within their browser. They simply don’t care about receiving personalized marketing messages, and certainly not if those messages are delivered in a creepy or overbearing manner. Another 29% of consumers say that they are unwilling to share any personal information with marketers in exchange for more relevant offers. At one time, the notion of personalized marketing might have sounded enticing, but now it’s just annoying to have brands filling up your email inbox with offers, or begging to spam you with text messages about hot new promotions.

The case for personalized marketing

That being said, it’s not like consumers are completely opposed to personalized content and personalized messages – as long as it makes their lives easier. In short, there can be benefits to personalized marketing. According to the GetApp survey, 53% of consumers say that online ads have become more relevant to their lives over the past three years. And that figure is even higher for the 18-to-25 age demographic, where more than two-thirds (69%) of respondents said that personalized marketing was making their lives easier or better. There appears to be an inverse correlation at work here: according to the GetApp data, the desire for personalized marketing fades as you get older, and becomes stronger as you get younger. Maybe older people are just more cynical, so they derive less value from personalized marketing. They probably see personalized emails and personalized experiences as just another clever marketing tactic that has been designed to get them to buy more stuff.

That being said, personalized marketing certainly has a role to play. When asked why they think personalized marketing is making their lives easier, 58% cited “promotions,” while another 48% cited “order updates.” And, in general, there seems to be a positive feeling about how online personalization can streamline the online e-commerce experience. Using relevant content to boost conversion rates is something that Amazon has mastered. Other brands that have received plaudits for personalized marketing campaigns include UK supermarket chain Sainsbury’s, Nike, Coca-Cola, Cadbury and Netflix.

Chris Warnock at GetApp, commented on the research findings: “This research shows encouraging signs for marketers, with many consumers finding benefits from having personalized advertisements directed at them. Due to their innate adoption of technology from an early age, younger generations are generally more receptive to personalized advertising. However, there will always be challenges posed by those who are wary of their information being used for marketing purposes. Businesses need to carefully consider their strategy and balance the need for information with maintaining the trust of their customers.”

The rise of the data pragmatist

Ultimately, it could be the case that people talk a lot about how much they value privacy, but are much more transactional in real life situations. Who hasn’t, for example, given away their email address to a trusted brand in exchange for being entered into a free product giveaway or sweepstakes promotion? And who hasn’t shared some aspect of their online profile – such as their age, gender or first name – in order to speed up an online shopping experience?

According to another survey, this one from Marketing Land, 58% of U.S. consumers actually identify as “data pragmatists.” In other words, they are willing to give up some of their data in exchange for premium content, exclusive offers, or attractive discounts. Even the staunchest privacy advocates probably have some “price” that they would be willing to be paid for their customer data.

So that raises an interesting strategic question for brands: How do you balance personalized marketing and data collection with the need for privacy? And how do you respect the right to privacy without making people feel that they are giving it away at a discounted price? Simply adding someone’s name to an email in order to boost email open rates or click-through rates is not a strategy – it’s a tactic.

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According to GetApp, the key is finding the right overlap between your business goals and the reasons why your customers find personalization useful. This requires developing a tailored personalization strategy that takes into account the customer experience. Some of the most popular and beloved brands in America have leveraged personalized marketing, and so there’s no reason why it can’t be used by other brands in moderation as well, as long as the proper privacy guardrails have been put into place to prevent overzealous marketers from abusing consumer privacy.