5 Ways Companies Need to Prepare Their Digital Marketing for the Age of Privacy

January 2021

The new privacy landscape has a huge upside for companies. It places them at the center of their digital ecosystem, freed from dependencies on marketing platforms.

This article first appeared published in the Observador magazine in Costa Rica in Spanish in October 2020. This English language edition is also an update to that article.

2020 was a landmark year for many reasons, not the least of which was for how it changed the data privacy landscape for the next generation of digital marketing.  

As digital consumers, we demand more control over our personal data and we entrust our government with crafting the regulatory landscape that helps ensure and protect our privacy. The European Union through GDPR in 2018 and the state of California through CCPA and CPRA in 2020 define a standard in which the digital consumer (the “data subject”) must consent to the capture and use of her digital interaction data on websites, apps and through ad interaction. 

These standards require that digital platforms such as ad platforms including Facebook and Google, data tracking tools including Google Analytics and Facebook Pixel, and browsers including Chrome and Safari all comply with these regulatory standards or risk penalties. As it is unrealistic for these platforms to create localized versions for the EU or California, these standards are applied as global standards by default. All digital consumers benefit from the EU and California having “raised the bar” for compliance around personal data privacy.

In September 2020, Apple further extended restrictions on user and marketing campaign attribution tracking via Safari with the “Intelligent Tracking Prevention - ITP” version 2.3 by restricting tracking users across sites. In April of 2020 the ITP version 2.2 had already restricted the use of cookies to store user information. In the US where Apple browsers and operating systems represent 40% of the market share (about 20% globally), these restrictions have broad impact across the digital marketing ecosystem.

The advertising industry proposed a new tracking standard through IAB Europe called “Transparency and Consent Framework (TCF)” but the data protection authority in Belgium rejected it in October 2020 on the grounds that it was insufficient to comply with GDPR.

On October 14th, Google launched “Google Analytics 4” (GA4) #googleanalytics with a renewed data collection method and data model, rebuilt from the ground up. In the second half of 2020, Google also launched a new tagging method called “server-side tagging” #serversidetagging within its Google Tag Manager (GTM) toolset. Google is also working on a new tracking mechanism through Chrome known as “Turtledove” #Turtledove in which the browser does hold personal behavioral data but this cannot be combined with other data by the advertiser nor can it be stored by the ad platform. Google is also experimenting with Federated Learning of Cohorts (FLoC) #FLoC in Chrome as a way of analyzing user behavior to group individuals in cohorts of similar interests.   

These initiatives reveal the sea-change that is occurring in response to the regulatory and technology changes in the digital privacy space. The digital platform giants like Google, Facebook and Amazon are coming to terms with the new limits on their abilities to capture, combine and then auction off our digital behavioral data. As a result, businesses that seek to use digital platform services will find ever less value in the data they can gain access to from these platforms.  

At the same time, businesses that use digital channels to promote themselves have enjoyed the lax privacy environment and have benefitted from the data provided by the platforms to inform their marketing decisions and explore new ways to engage and improve their customers’ experiences.

Consumers have grown accustomed to this level of service in which websites track, gather and share information about consumer behavior and based on these signals they learn and adapt to the likes and preferences of the consumer. 

But this data environment allowed for abuses and demanded that each individual consumer take their personal privacy controls into their own hands to try to make sense of who was collecting what data and for what purposes… with the assumption that no bad actors would inviolate these limited controls.

The new digital marketing landscape demands that each business that wishes to use digital channels to interact with consumers and use this data to inform future interaction must comply with a new reality: if you want consumer data, you have to get the consumer’s consent and you can no longer rely on a third party such as Facebook or Google to gather and manage that data for you. Each business must commit to gathering the data of and for itself. This “first party” data then requires that the business employ the necessary means to ensure the data security and privacy and employ it only in the terms and conditions established by consent. No more can a business outsource its consumer data to a third party to manage.

So, then, what is required of a business to operate in this new landscape?

1. Accept the responsibility for collecting and safeguarding the privacy of your customers 

Given that companies must comply with the regulatory environment as defined by GDPR and CCPA/CPRA as well as respect the privacy restrictions imposed by browsers, and given that companies have been collecting customer data as an ever more essential asset of their business models and want to continue collecting more of this data, it is now time to recognize the important responsibilities that come with this evolving landscape.

When a company tracks website users with the pixel or cookie provided by a marketing platform, the company is essentially handing off its customer data to the third party platform. The new privacy environment establishes that consent is between parties, that is, either between the company and its customer or between the platform and its user. The company can no longer ask for the consent of its customer and then hand the data over to the third party.

The solution requires that the company collect the customer data with consent of the customer and do this through the company’s own web domain. Once the data is collected, the company may redistribute anonymized data (i.e. not personally identifiable data) to marketing platforms like Facebook and Google to take advantage of their analysis tools with which to better design and manage marketing audience cohorts. This data workflow is the inverse of what it has been historically.

The method for achieving this is referred to as “first-party” data collection and takes place via “server-side” collection. 

2. Use marketing platforms to enrich customer data and enhance the user experience

As the marketing platforms and browsers are limited in what they are collecting and serving back to the companies that use them, they are starting to recalibrate what type of results and reporting they are able to provide and even redefining the measurement metrics and conversion goals that companies are able to achieve. 

As a company embraces its responsibility to collect customer data with consent and using server-side methods, it then can take subsets of this data and send it to tools like Google Analytics 4 to generate visualizations and reports, perform predictive analytics and improve their understanding of consumer behavior and improve the user experience. An example business case for this might be using the website interaction data to visualize the customer journey in order to then modify a subsequent campaign message or website page content that better responds to the consumer’s past interactions and future intent. 

As the marketing platforms also have first-party consent with their customers and due to the fact that most of the company’s customers also use these platforms, there is an overlap between these datasets that can be used in a privacy-conscience way that affords the company added value and insight into its customers. Companies should make use of these overlaps to explore new facets of its customer needs and interests and support initiatives that allow the company to enhance the user experience. 

3. Accept the responsibility for managing collections of marketing data  

Currently, every company, independent of its size, uses a variety of digital channels with which to interact with customers. These channels generate multiple data sources for everything from advertising campaign initiatives on platforms like Google and Facebook, to conversations and customer interactions on social platforms, to interactions on a company’s own website and/or mobile app.

The marketing and advertising platforms are not in the business of pulling in and processing all of these varied data sources and channels, nor could they reasonably do so without the consent of the consumer to share data across platforms.  

The solution is for the company to request consent, collect data and then manage the data directly. This responsibility obviously comes with new competencies including understanding consent, managing privacy and data security and collecting and housing data in a useful and usable manner. With the data in hand, the company can then perform transformations that allow it to analyze the data, understand the customer behavior and define ways in which to activate the data to create better experiences. 

4. Focus on generating value for customers in exchange for their consent.

When companies generate sufficient value for customers in exchange for the consent to perform tracking, only then will companies begin to establish lasting relationships based on real value exchange.

The days of adding a checkbox to a website that generically states something like “By visiting this site you consent to the company using your data” are numbered. Moving forward, consent will be requested according to the purpose of the tracking and collection of user data, namely: general tracking for functional and analytical uses that do not consider individual user behavior, tracking for the purpose of analyzing individuals and their interactions and behavior, and tracking for the purpose of personalization and user experience enhancements.  

The great challenge in digital marketing has long been the ability to observe and follow an individual consumer through multiple channels of interaction over a span of time. As the variety of digital channels and platforms expand, so does the task of stitching together these interactions in a cohesive customer journey. Companies can use their first-party data to support the task of resolving their customers’ identities retroactively to their early and anonymous interactions by connecting them to later ones when they are known and named entities. This holistic approach to mapping between anonymous and known identities allows the company to identify which marketing initiatives, and which organic content and interactions played a part in the customer journey. From here, the ability to personalize and greatly enhance the customer experience is heightened. Anything less is basically useless.

By starting with managing consent and the value promise it unlocks between the company and its customer, the company is then able to exploit the value of a unified understanding of customer behavior, interests and business impacts. 

5. Accept the challenge of maturing the company’s data management capabilities

The four aforementioned requirements involve capabilities on the part of the company. Maturity in this regard does not come from the ability to use a set of tools. The capabilities transcend all levels of the company from strategic vision, to managing the engineering and data usage to provisioning and appropriating tools. Above all, the capabilities required are those of a culture of learning and innovating that permits the company to evolve and adapts its knowledge of the ways that managing customer data not only allows it to comply with evolving regulatory frameworks but in how it adds value to the business by placing the customer at the heart of the business’ value.   

The first step for any company is the decision to accept the responsibility of governing its customer data and recognizing that the company will be embarking on a process that demands capabilities maturity. 

The initial experiences in the company might involve designing a data and measurement strategy, establishing a catalog that describes the data structure and then beginning to populate the data warehouse to fit the strategy and catalog. Sooner than later, the company will evolve to ideating uses for the data, new visualizations and ways to automate marketing initiatives directly from the analysis without human intervention. At this point the company has transformed into a data-driven company, one capable of developing and managing digital marketing data products. 

Conclusion

This new age of data privacy has profound implications for digital marketing. As the marketing platforms adjust to this new reality, so do the companies that have been dependent on these platforms for access to markets and consumers. The new ecosystem requires a new set of responsibilities on the part of companies that wish to make use of digital channels and customer interaction data in order to enhance the user experience and improve customer satisfaction. The new privacy landscape has a huge upside for companies. It places them at the center of their digital ecosystem, freed from dependencies on marketing platforms. But most of all it demands that the company define and then commit to creating value for consumers based on the consent they provide. This is the moment to think strategically, accept responsibility and commit to maturing the company’s capabilities to manage and extract value from customer data.