It seems like every week new privacy legislation emerges in the United States. As the status of legislation varies from state to state and an individual state’s policy is constantly developing, there is little to no room for error when it comes to consumer data. Currently, three states in the U.S. have three different consumer privacy measures that have been signed into law: California, Virginia, and Colorado. Four additional states (Pennsylvania, North Carolina, Massachusetts, and New York) have serious consumer data-privacy proposals in committee at the moment.
I’ve written about data privacy and digital targeting in the past. To help sort through the current state of data privacy, and make sense of what it means for marketers, I spoke with RRD’s Todd Hatley, senior vice-president, data, insights, customer experience, and Paul Horbal, vice president, chief information security officer.
Gary Drenik: With various states evaluating and even passing new privacy legislation aimed at protecting consumer data, can you give us a quick overview? What’s the latest in data privacy?
Paul Horbal: Since GDPR and CCPA passed in 2018, the climate in the U.S. surrounding data privacy has been evolving and states and companies are reacting. We’re seeing that when the law changes in one state, other states take a look at their own measures. And, because of the nature of data-privacy rights, the dialogue around privacy is constantly changing. This is due to the lack of federal legislation.
However, most marketers who manage data for large brands are doing so for organizations with a presence or customers in every state, including California. This means that the steps taken by the vast majority of organizations to address CCPA requirements leaves them well-positioned for future state-by-state or federal legislation.
Drenik: What is the impact of this type of legislation on brands and marketers in today’s data-driven world?
Todd Hatley: Amongst the most significant impacts are operational requirements for managing data. Organizations require a very high degree of situational awareness when it comes to their standard of handling consumer data, and the process of gaining that awareness must come from internal intent versus a byproduct of legislation.
This is extremely important to consumers — more than half (54.7%) of Gen Z consumers included in a recent Prosper Insights & Analytics survey reported being concerned about the privacy of their personal identity when shopping online.
Therefore, it must be critical to a brand’s strategy; those who put data privacy at their core — rather than an afterthought — will find the most success. In practice, when a brand introduces new products or services, data privacy must have a first-party seat at the table to discuss and understand the impact it has on the organization’s responsibility to privacy.
Prosper — Privacy Shopping Online. Prosper Insights & Analytics
Drenik: How is RRD approaching these changes and what impact have they had on clients?
Horbal: While this is all still developing, RRD is here to help clients implement and enforce their privacy policies, but companies must take full ownership of their entire privacy regime and I cannot stress this enough.
With that being said, an important element of RRD’s response is our emphasis on zero-party data (i.e., data self-reported by consumers) and the infrastructure to collect, stage, and leverage this data. Zero-party efforts involve preference centers, providing an opportunity for consumers to share their preferences for communicating with a brand. However, when you ask consumers their preferences, you have to guarantee you will meet them and the more you allow consumers to specify how communication will operate, the more implications there are for how you’re able to implement it.
Beyond respecting their preferences, this is an opportunity to engage consumers, to find out what they care about, and to show they are valued by your brand.
Drenik: How can marketers ensure they remain compliant with the legislation while still leveraging their analytics efforts to deliver highly personalized experiences?
Hatley: Once you receive consumer preferences from the preference center, you can begin to personalize their experiences with your brand. And, via analytics, we can infer further – leveraging email open rates, purchase history, and other interactions – and use this information to speak to consumers in a highly personalized and customized fashion.
In fact, Prosper Insights & Analytics Media Behaviors & Influence™ Study found 38% of millennials are willing to allow personal information on connected devices to be tracked and used for marketing purposes, showing that consumers may be receptive to sharing information in exchange for a highly tailored experience.
It’s important for organizations to demonstrate to consumers that they value their communication preferences, rights, and personal data, and are using it in a way that is beneficial to the individual.
Prosper — Allow Personal Information to Be Tracked. Prosper Insights & Analytics
Drenik: How does this impact data-driven attribution models? What are some strategies that marketers can employ to help them navigate these changes?
Hatley: Brands will have to rebuild data-driven attribution models without some of the previously used variables. Anytime you build an attribution model, it’s a search for different independent variables and you are trying to include as many as possible. While the finished product of your attribution model may only use a few, you start the process of building that model by harvesting a lot of variables.
The challenge is there are quite a few attribution models out there that involve bringing together information through methods that may no longer be allowed. Instead, marketers should deploy other effective response strategies, including allocating more resources to contextual marketing tactics, building zero and first-party data assets, and forming compliant second-party relationships.
Drenik: Where is the opportunity for marketers moving forward?
Hatley: Compliance with the law is just the baseline for organizations today. Making changes to your organization in order to respect consumer privacy is entirely positive and necessary for society. These changes will require brands to engage consumers with better value propositions and a more holistic understanding of who the consumer is and what they want.
This also provides an opportunity for marketers to bake data privacy into their brand’s identity and interact with consumers in an authentic way with privacy at the core. Consumers will notice this – and respond positively.
Drenik: No one knows how all of this will shake out over the next few months and years, but if you had a crystal ball, how do you anticipate the marketing landscape will evolve in the next five years?
Horbal: At this moment, we are trending toward future federal privacy legislation similar to what’s found in Europe where it’s determined how much consumer data a brand can track. This will give way to a more empowered consumer who is able to opt-in to sharing data based on what’s offered, meaning consumer data is inbound as opposed to brands reaching out to consumers for permission.
A recent Prosper Insights & Analytics survey found that the majority of consumers have already taken steps to protect their digital/online privacy, such as changing social media privacy settings or turning off mobile trackers. This trend will only continue to grow as consumers gain greater control over their data.
Prosper — How Protecting Digital/Online Privacy. Prosper Insights & Analytics
In the next five years, I expect more brands embracing consumer data privacy, resulting in greater awareness and empowerment among consumers.
We’re headed towards a future where the customer will truly be in control. And now is the time to start adjusting marketing strategies accordingly.
Drenik: Thank you, Todd and Paul, for sharing your data-privacy expertise with us and providing a glimpse of what is to come next for marketers.