Balancing Data Privacy and Advertising: How to Solve the Data Privacy Paradox

 Quick Hits 

• Today’s consumers expect personalized advertising experiences but are hesitant to share the data needed to create them. 
• Marketers can meet consumer expectations by creating simple and clear messaging about what data is collected, why it is collected, and how it is used to enhance customer experience. 

It’s 2022, and personalized advertising experiences are both widely used by modern marketers and expected by many modern shoppers. At the same time, many consumers are hesitant to share personal data online and frown upon their data being used by advertisers.  

The Online Advertising and Privacy Paradox 

A BCG survey showed that while two-thirds of consumers want customized ads, one-half of consumers were hesitant to share data that would allow them to receive these ads. This means that a substantial percentage of consumers want personalized advertisements, but don’t want to share personal data. While this may seem paradoxical, this is not an insurmountable problem for marketers to solve. 

The majority of consumers are not against online experiences enhanced by personal data. However, concerns about how their data may be used keeps many from choosing to share. With a nuanced understanding of consumer concerns and intentional efforts marketers can overcome these consumer data anxieties.  

In the following section, we’ll outline strategies marketers can use to exceed customer expectations and utilize customer-centric data privacy tools and techniques.  

Customer-Centric Solutions 

In previous years, marketers freely used whatever data they could find, however, they found it. But today’s data-centric advertisement landscape isn’t the Wild West it used to be. Increasing restrictions, thanks to new privacy laws like GDPR, CCPA, and others, have been instituted due to numerous cases of data misuse.  

It’s important to understand that these rising restrictions come at the demand of the consumer, not regulatory bodies. Even if your company has not done anything worthy of scandal, consumer trust has been violated on a large scale. Many consumers are wary about disclosing information to any business and it’s the role of the marketer to address those concerns.  

Marketers and advertisers must take measures to regain consumer trust through both careful usage of consumer data and transparent communication about what happens to this data “behind the scenes.” 

Refusal to update marketing strategies may lead to increased mistrust and lost opportunities. Here are several measures to implement in order to meet regulations, gain consumer trust, and prepare your marketing strategy for the continued restrictions expected in the coming years.

Prioritize Clear Communication 

Customer communication should be at the forefront of every marketer’s mind when it comes to data privacy. How easy is it for customers to find information about how their data is being collected and used? How easy is that information to understand?  

The topic of data privacy should be added to all mediums of ongoing dialogue with customers. Not all customers will care, but those that do will appreciate the effort. Audit current data privacy communications and provide directions to pages with more information for privacy-minded customers.  

Optimize Data Invitations 

When asking for consumer data, many companies opt for large amounts of hard-to-read text and a simple “accept” button, hoping that customers will agree mindlessly. However, this misses an opportunity to interact with customers and increase consumer trust.  

Taking the time to simplify the message into an easily digestible request can change a begrudging acceptance into a positive interaction. Clearly communicate what data you’re requesting and why. Emphasize the benefit to the customer and clarify exactly how it will be used. Refusing to simplify the message in the hope that privacy copy won’t be read will result in resentful opt-ins or worse, customers leaving your site entirely.  

Offer Value 

At every step of the process, clearly offer value for the data you are requesting. If you’re asking to use data for personalized ads, some consumers may opt out, but they will know why their experience on the site is less personalized. Additionally, many consumers will be more than happy to opt in when they receive something of value.  

Create clear and reasonable value propositions whenever asking customers to share their data. While discounts and sales may be an effective way to gain more data, excluding customers who opt out may violate CCPA regulations. Your value propositions need to be tied to the benefit the data brings the consumer. Show customers how it enhances their experience saves them time or allows your company to operate better.

Increase Transparency 

Consumer trust is hard-won, and many consumers are tired of empty platitudes about “security” and “trust.” For these consumers, transparent communication is key. Show, don’t just tell, them the ins and outs of how their information is used. 

If you’re concerned that customers won’t appreciate how their data is used, that’s a sign that data usage needs to be addressed internally. It may seem like a hassle, but looking at data practices through the eyes of the consumer now is an opportunity to control the narrative before it’s taken out of your hands.  

Stick to Intended Use 

If you tell a customer that you are collecting data to be used for X purpose, you cannot turn around and use it for Y. Even big companies, like Twitter, make this mistake and it ends up costing them big. Not only is it illegal, but it damages customer trust.

Never use bait and switch tactics, promising that data will be used for one purpose and then using it for another. All of the ways that the data will be used must be communicated to customers. If tracking how data is collected, and what consent is given at collection, is tricky, consider using a consent management platform. Consent management technology can help keep track of data collection and manage data usage accordingly. 

This requirement may make it tricky for marketers to always position data collection in a positive light while maintaining complete honesty. Some data collection is simply easier to connect to the user experience than others. However, hiding behind these easy answers will only lead to loss of trust down the line.  

Update Internal Policies 

Audit internal policies and procedures to ensure that the data usage and security being communicated is being followed through. Create a team of legal, technical, and marketing individuals to strategize and implement data-centric privacy policies. 

While marketers may not have the power to change companywide policies, they have a vested interest in creating consumer-centric data policies. After all, it’s easier to communicate transparently about data usage and storage when there’s nothing upsetting to the consumer to share.  

This has been a brief overview of the strategies marketing and communication professionals can use to balance data privacy with advertising. Privacy restrictions and consumer demands are continuing to climb, which means now is the perfect time to shift how data is collected and used for marketing. Becoming too reliant on consumer data is a risky move for the long-term marketing strategist.

Still need to use personal data while managing privacy restrictions? Learn how data deidentification can preserve data’s advertising utility while moving it out of compliance scope.