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Balancing Marketing Personalization and Customer Privacy

The consumer privacy paradox is turning into one of marketing’s biggest dilemmas. Consumers are increasingly worried about the safety of personal data and online privacy, yet very few are taking steps to mitigate risk. This puts marketers in a delicate position, tasked with delivering the personalization consumers say they want, while also providing the checks and balances they need to feel secure.

This is the contradiction at the heart of the data debate and an issue that’s not likely to be resolved quickly or easily. But there are some facts, courtesy of Forrester, marketers can keep in mind as they work to strike the right balance between consumer concerns and their own marketing imperatives. Here are a few.

New Techniques for a New Time
Today’s consumers are well versed in data rights and risks thanks to the implementation of new regulations (GDPR in Europe and the Consumer Privacy Act in California), potential federal legislation and numerous high-profile, highly publicized, data breaches within Facebook, Google and other behemoth companies. As a result, 71% of consumers worry about how brands collect, store, use and sell their personal data and nine out of 10 don’t trust tech companies with their digital privacy and data security, according to this survey by ExpressVPN.

Yet despite consumer awareness of data issues, an IBM survey showed most don’t take consequential action in response. Less than half (45%) updated privacy settings. Only 16% stopped doing business with an impacted company, and only 18% deleted a social media account. At the same time, consumers say they prize the conveniences, savings and other rewards they reap from sharing personal information. Marketers face the conundrum of weighing privacy against convenience, but they are better-positioned than they think to address the concerns of their customers and also have a lasting influence on privacy in technology.

The Wrong Data Elicits the Wrong Reaction
According to Forrester, much of consumers’ distrust is due to an over-reliance on third-party data. The practice is rapidly being abandoned because the data it produces is problematic rather than helpful. For example, most third-party data is amassed from a host of unrelated and unreliable sources like credit scores, cookies and click trails. These not only become outdated quickly, they rarely have a direct relationship with the individual consumer, which ultimately hampers the quality and effectiveness of the ad campaigns the data is powering. Consumer preferences, budgets, household sizes and the like all evolve and change over time and credit scores fluctuate. As a result, third-party consumer data rapidly becomes useless.

The Benefits of Zero-Party Data
Forrester describes zero-party data as that which is shared intentionally and proactively with a brand. It can include purchase intentions, personal context and how the individual wants to be recognized. And unlike first-party data, which is collected during sales and is oriented around purchase histories, zero-party data is focused on intention, which gives marketers highly valuable information about what will interest the consumer in the future.

What’s most significant about zero-party data is that it allows brands to build direct relationships with consumers, and focus their marketing efforts, services, offers and product recommendations based on what the customer expects to do in the future, rather than on what has already occurred.

The privacy paradox is a big one to untangle and it will take action on many fronts to get to the happy medium between what’s effective for marketers and what’s acceptable to consumers. But zero-party data is a good first—and safe—step forward.