Reshaping digital marketing

Technology has changed not only what’s possible, but people’s expectations, motivating regulators to change what’s permitted. Brands must change their response.

BigTech’s privacy trajectory started in 2016 and shows no sign of abating, spreading from browsers to apps.  This will continue to affect any consumer-facing digital ‘rails’; be that connected TV, retail, audio, gaming, AR, VR, cars and so on.  We connected everyone and everything; that means rethinking how data flows work.

Governments are compelled to react, but must balance conflicting privacy and competition aims, alongside a fear of stifling innovation.  Hence regulation will necessarily be backward looking.

Brands should forecast for such external variables, and must play by others’ rules, but are best to focus more on their audience.  Doing the right thing for customers’ privacy is the best preparation.  By helping consumers understand what they are exchanging and why, they can engender brand value. 

Human consciousness of digital data was growing before the pandemic, but the very public use of health data and having to live digitally have been dual accelerants.  People now not only understand that they create data, but have feelings on how brands should use it.

This translates into a hierarchy of data needs, which brands must address:

This is no substitute for a great product or any other element of brand strategy, but successful organisations will use data sensitively, to guide their audience from the basics – ease and safety – onwards to tailored, valuable experiences.

Privacy is a state in which one is not observed or disturbed by other people.  But privacy, in a digital marketing context, is not an absolute.  The nature of software means it must observe what’s happening to function correctly.  And marketers strived for measurability by observation long before the internet; think different phone numbers in TV or print.  Moreover, advertising has always disturbed the experience to an extent.  The challenge is to get noticed, without being too noticeable.  This is all tolerable, where it helps fund the experience.

‘Experience’ is key.  Because when Apple and others argue we don’t need such data because advertising worked fine beforehand, they’re only partially correct.

Because all touchpoints with a brand, and that includes ads, can be made better with data.  It’s why Apple collect so much personal information; check your iPhone’s privacy statement.

It’s also important to qualify what marketers can do with that data.  Because data is like sand; it’s most useful in aggregate.  No marketer wants your banking PIN; it doesn’t help them scale a viable campaign.  Even digital ads are tailored by template, rather than individually bespoke.  More interesting are in-market signals, and segments of a broader population in which to find high value audiences.

Privacy in digital marketing then is a spectrum.  A series of balanced data value exchanges where the brand and customer find mutual benefit.  This can be illustrated as a ‘privacy curve’:

The brands shown are informative.  Every business uses data, but its role differs.  Facebook sell the opportunity to advertise against data.  This drives 97% of revenue and users get a free at-point-of-use product.  Netflix doesn’t sell traditional ads, instead using data for recommendation, product development and commercialisation.  But users pay a subscription.  The NYT balances the two models, with 67% of revenue from subscriptions, 22% from ads (both fuelled by data) and a strong privacy stance.

In all cases, the customer understands what they’re getting – it is transparent.  The data value exchange works for them, so they share data.  Why?

Such exchanges can be evaluated by considering five factors.  Purpose is mentioned in most post-GDPR legislation and is the corollary of Benefit.  These are the reasons the brand wants, and believe the user will share, data.  Trust is not only a function of brand, but industry and environment, as well as whether another party is involved.  Control reassures the user that they can change their mind in the future.  And sensitivity is governed by the nature of the data and the audience.  Demography and culture influence which data is considered shareable in a given context.

Brands already have data value exchanges.  These should be re-examined with a renewed privacy lens.  Which data are truly necessary to measure?  Are the metrics used still appropriate, timely and reflective of consumer behaviour at scale?  How do they influence activation and shape the customer journey?

It is natural to react to the firehose of privacy changes by worrying which current marketing tactics will ‘break’ as a result.  That leaves marketers on a treadmill though, chasing fixes to practices which are no longer in their or their audiences’ best interests.  There will be operational tweaks, but little effort towards a privacy-conscious mindset.  The brand won’t evolve in a sustainable way.

Proactive brands will start at the other end of the to-do list, and think privacy first.  By considering their data strategy and privacy stance, and matching that to their intended audiences, operational changes become a natural progression.  These brands will still feel the impact of digital’s new rules, but they’ll approach it with a vision and cultural aptitude.

Consumers need to be reassured that data value exchanges benefit them, as well as the brand.  The idea of unbridled surveillance capitalism scares people.  Brands must educate their audience on how they approach privacy in a transparent way.

Data security is table stakes for any marketer.  But so are clear use cases for which data are necessary, and when.  These enable marketing teams to work effectively with Legal and InfoSec departments to assess platforms and their data solutions.

Measurement wasn’t the issue that led to digital privacy changes, but these make it an issue.  Marketers’ ability to measure digital ad effectiveness is changing, not disappearing.  The whole organisation must understand that to have a meaningful discussion of ROI.  The resulting review of measurement frameworks is timely.  Metrics’ accuracy varies and some only have a tangential relationship with consumer experience.  Better to rethink what is available, when it is appropriate and how it links back to business value.  Measurement changes won’t alter consumer behaviour.  But a longer-term view is needed to identify when privacy changes do.

A more private internet tends towards a more siloed one.  Brands’ privacy stance should influence their choice of walled and open environments, plus how these fit into the customer experience.

Privacy is changing, hence brands must iterate and adapt.  That requires skill, cultural change, and a forward-looking stance.  But most of all, it demands understanding your audiences and designing experiences around them.

Author:
Jonathan Edwards

Head of Data and Transformation, APAC