Personalization Versus Privacy: How Marketers Can Find A Middle Ground
Nov 11 2021
The imminent demise of third-party cookies has seriously impacted how online marketers and advertisers collect customer data to build personalized user experiences. Third-party cookies have been the industry standard in data collection for more than twenty years. Brands use them to improve the customer experience, collect data that helps marketers target ads to the right audiences, and track website visitor behavior, specifically what customers check out online when they aren’t on a brand’s website.
But growing customer concerns about online security and privacy have prompted sweeping changes in how companies can collect data to build those all-important personalized customer experiences. The heavy use of third-party data has also led to a decrease in trust, as many consumers feel as if their every move is being tracked online for the benefit of marketers and advertisers.
While the prospect of a third-party cookieless future presents challenges for online marketers, it’s not all doom and gloom. It just means marketers need to make better use of first-party data to build targeted customer experiences. In fact, 52% of marketers said privacy regulations have them putting greater importance on collecting and utilizing first-party data. As they grow in importance, first-party cookies are poised to become the gold standard for customer data collection.
A Stronger Dependency On First-Party Data
First-party data is information that companies collect from their own online and offline sources. This can include data gathered from website visitors and their actions, apps, Customer Relationship Management (CRMs), social media, email subscribers, transaction records, phone calls, or online surveys and quizzes. First-party cookies also collect vital information like items added to shopping carts, usernames and passwords, geographical locations, and language preferences.
First-party data is more accurate than third-party data since it provides deeper information about existing and prospective customers. In short, it puts brands in closer contact with their customer base. Without this kind of reliable information, building meaningful, personalized experiences becomes much more difficult. Since personalization is the name of the game in marketing these days, it’s imperative that marketers make the very best use of first-party data.
Striking A Balance Between Personalization and Privacy
The precision and ease of collection of first-party data has brought on its own set of challenges in the age of heightened privacy. Marketers now struggle with striking a balance between personalization and going too far in their pursuit of personalized customer data to the point of annoyance.
While consumers now expect ultra-relevant experiences, they’re increasingly concerned about privacy. At the same time, consumers often send mixed signals to brands about privacy and personalization. 79% of consumers believe companies know too much about them, yet 90% are willing to share behavioral data for a cheaper and easier brand experience.
As well, a large number of consumers say that personalization efforts have become increasingly annoying, particularly when it comes to email marketing. According to a report from the personalization platform company SmarterHQ:
63% of consumers have stopped buying from a brand that used annoying personalization tactics
66% were annoyed when they were targeted too many times
44% found it annoying when brands targeted them for too long a period of time
39% of consumers were annoyed at being targeted for items they already bought
Consumers also found annoyance with repeated ad targeting that is a bit too specific, finding the experience to be effective and “creepy” at the same time.
How to Do Personalization Without Being Annoying
When faced with so many roadblocks, how can marketers make optimum use of personal first-party data for more relevant consumer experiences while still respecting privacy concerns? How do they find a middle ground between providing highly personalized experiences and building consumer trust? Here are a few ways marketers can optimize their first-party data to build personalized customer experiences that aren’t pushy or downright annoying.
Brands need to be transparent in letting customers know how they are collecting personal data and what they intend to do with it. Transparency lets brands make the case to consumers for collecting their data. When consumers know and trust a brand’s intentions, they are more likely to give away their information when brands ask for it. Data collection does not need to be clandestine.
Let customers know the value exchange
Consumers will feel more comfortable sharing their personal data if
they know they’re getting something valuable in return. What experiences can customers expect in exchange for their data and loyalty? The answer, of course, is a personalized, tailor-made experience at every touchpoint. Since that’s what today’s customers are looking for anyway, brands who give it to them will gain their trust and their data.
Give consumers a choice to opt-out
Practice audience segmentation
Once brands have collected enough data, they can segment their audience based on factors like age, gender, income, location, interests, and pain points. Audience segmentation enables brands to match audiences with messages, media, products, and services based on the specific audience preferences. This way, a customer in Philadelphia will not receive communications about a sales event in San Francisco.
See things from the customers’ perspective
When designing personalization campaigns, it helps if brand marketers put themselves in the consumer’s position. Then they can take into account how public or private each channel of personalized communication might be, how specific their message is, and if it comes off as rude, annoying, or inappropriate. Marketers need to remember that personalization is all about improving the customer experience. The company’s bottom line is secondary.
Always be testing
Ultimately, the only way to really know if a personalization campaign is annoying or inappropriate is to test it. Brand should run an A/B test on different messages in order to hit the right tone. Monitoring social networks for any kind of feedback and keeping track of a campaign’s KPIs will also help brands make sure they’re getting the right results.
Brands That Respect Their Customers Will Be Rewarded
Following the above tips will help brands make the most of their first-party data while giving their customers the personalized experience they are looking for. Of course, it’s up to brands to perform due diligence to make sure that they’re not crossing the line into annoying or creepy. In the end, it all comes down to respect. Brands that respect their customers’ privacy when it comes to collecting first-party data will be rewarded with customer trust and loyalty and even more data.