Member Perspective: Effectively Navigating Privacy Regulations
Not long after GDPR went into effect, the California Consumer Privacy Act (CCPA) was enacted in California. Denial was no longer an option. CCPA is only the beginning of data privacy laws impacting American businesses. New privacy legislation — in California (CPRA), Colorado (CPA) and Virginia (VCDPA) —is set to go into effect in 2023. Additionally, more data privacy laws are proposed, with each bill having its own varying nuances.
Companies need to be proactive when it comes to privacy compliance. Aside from wanting to avoid violations that will be costly both monetarily and in reputational damage, the main motivation behind privacy compliance should be the desire to respect consumer choice. A study conducted in 2020 by global accounting organization KPMG revealed that 87% of U.S. consumers view data privacy as a human right.
Consumers have spoken loudly, and companies are finally responding. To respect consumers’ choices when it comes to how data is accessed, Apple now provides users with the choice to block the Identifier for Advertisers (IDFA) at the app level, and Google will eliminate third-party cookies from Chrome in 2023. These improvements in transparency empower consumers and panic advertisers.
But there’s no need to panic. Brands are still empowered to succeed in this new era. While consumers demand (and deserve) respect for their data privacy, they also crave personalized advertising experiences. A 2021 report by management consulting firm McKinsey & Co. shared that 76% of consumers believe that receiving personalized communications is a key factor in prompting their consideration of a brand.
At Aki Technologies, an Inmar Intelligence company, we have also proved the effectiveness of personalized advertising. Last year, Aki partnered with PepsiCo to test how personalized advertising might drive better results for a campaign promoting their Off The Eaten Path veggie snack brand. The findings revealed that each audience was at least twice as likely to engage with personalized creative vs. non-personalized creative. And personalized rich media drove 110% higher engagement than non-personalized rich media on average.
Knowing the impact that personalization has on the effectiveness of advertising, advertisers must figure out how to balance privacy compliance without compromising performance. Thankfully, it’s simple. Focus on data quality over data quantity. Deterministic targeting will not have the scale that it once did. Rather than collecting IDs from all users, marketers need high-quality, insightful data: demographic, psychographic, behavioral and transactional data from which to build scalable and representative models for advanced targeting and messaging.
It’s important for brands to partner with technology companies that have future-proof methodologies. Meaning that their core strategies leverage probabilistic data that is privacy-compliant by design. This will empower brands to provide consumers with individualized experiences while ensuring scaled addressability. Not only is this a benefit to the consumer, but it ensures brands can navigate the complexities of the ever-changing laws around data collection, usage and storage.
ABOUT THE AUTHOR: Alexandra Matthews is director of content marketing at Aki Technologies, where she manages the company’s award-winning thought leadership content. She is a passionate content marketer with 10-plus years of experience developing marketing strategies and solutions for brands, agencies and publishers.