“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Scott McDonald, President and CEO of the Advertising Research Foundation.
There’s no need to rehash all the privacy-related legislation sweeping the digital world and how the advertising industry is evolving in response.
What advertisers need to figure out is how to get more internet users to voluntarily share their uber-valuable, opted-in, first-party data.
Today, there are three key ways in which the industry can do a better job of selling customers on the value exchange they’ll see from sharing their data with brands.
Stop, educate and listen
McKinsey research reveals that many consumers don’t trust companies to adequately handle their data or protect their privacy.
Consumers rank health care and financial services companies as the ones with whom they’re most comfortable sharing data, at 44%. They are least comfortable sharing data with media and entertainment and CPG companies, at 10%.
The reality is that many consumers lack trust because they don’t know how their data is actually used. This should be a simple fix for most businesses. All it takes is spelling out the benefits: what will work better, cost less or be more relevant as a result of data sharing.
A consistent, multi-channel approach, including consent banners, privacy policies, website pages, blog posts, emails and social media, can educate consumers about when, why and how you use their data. Also consider explicitly calling out the meaning of key terms involved with digital data privacy that may still confuse consumers, such as PII.
Ask with intention
Consumers are now more intentional about what types of data they share, preferring to hand over only what is needed to engage with a business, according to McKinsey. For instance, 52% of consumers are more likely to trust companies that don’t ask for information not relevant to their product, and 48% prefer that companies not ask for too much personal information.
The easiest way to get more opted-in first-party data is by proving to consumers that the information you already have about them is being used relevantly and respectfully. Make it easy for them to control, correct and withdraw the data. Being privacy-first requires transparency.
It’s also important to consider the moments in the logical flow of a user’s journey where it makes sense to ask for data. Don’t ask for it all upfront. Don’t ask for too much personal information (like a 10-field contact form to download a whitepaper). And offer your customers something when they do provide their data.
While advertisers are using transparency to build up trust over the long term, in the near term, they will need to embrace contextual targeting, explore the growing array of PETs (privacy enhancing technologies), and/or build up their body of consciously consented first-party data.
Personalize, personalize, personalize
A recent survey of 1,000 consumers by MediaMath shows that most are okay with using first-party data to personalize advertising. Almost three-quarters of consumers would share preferences, interests and demographic information directly with brands if it improved their online shopping experience.
Seventy-one percent said they would greenlight sharing their email addresses with brands if it would power personalized online experiences, offers and ads.
Some examples include:
- Use the customer’s birthdate to offer a coupon or freebie
- Deliver preferred content topics
- Send surveys or mini polls about interests, future purchases or opinions
- Use postal codes to deliver local news, traffic and weather alerts
Feeling at home in a new digital world in which advertisers are more reliant on opted-in first-party data will be tricky and take time. Don’t wait for Big Tech or the government to make a move before you start putting some of the above strategies in place.
The sooner you can make consumers trust your brand enough to share their data with you, the sooner you’ll future-proof your business for growth.
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