In just six months, the General Data Protection Regulation (GDPR) officially goes into effect. Marketers will no longer be allowed to collect, store or use the personal data of any European Union (EU) citizen without their explicit consent.
Compliance is non-negotiable, given the huge financial ramifications. On the surface, the regulation may sound draconian. But while the GDPR poses tremendous challenges to marketers, it’s also forcing them to become better at their jobs by fostering transparency.
That transparency will help rebuild a sense of trust, which is often missing. According to IpsosOTX research commissioned by the 4As research, most people think advertisers lack integrity.
Content produced in association with SmartFocus.
Data is fundamental for marketers, allowing them to use what they know about consumers to create the experiences they want. For the last several years, the industry has been laser-focused on being data-driven, with companies investing heavily in achieving that goal.
The data investment will be even more staggeringly expensive, once GDPR compliance is factored in. Unlike previous iterations which applied to businesses located in the EU, the regulation extends to any company that operates within its borders.
According to a recent PricewaterhouseCoopers survey, 92% of multinational companies based in the U.S. consider the GDPR to be their top data security priority over the next year. More than three-quarters (77%) plan to spend more than $1 million on compliance efforts, which often call for a whole new tech stack.
GDPR challenges go far beyond cost. Putting people back in control of their personal information will only further complicate the already-intricate data landscape. It will require sophisticated data management and a deep understanding of exactly how user identities are created.
At the same time, giving consumers a better understanding of how those are created could have fallback. Many people don’t realize how cookies work, let alone exactly what data marketers actually collect. Pulling back the curtain and presenting a detailed opt-in list has potential to diminish consumers’ trust for marketers even further.
Three years ago, Microsoft found that 56% of consumers think brands collect their data without consent and would appreciate more transparency.
This is illustrated by the existence of DuckDuckGo, a privacy-focused search engine whose slogan is, “The search engine that doesn’t track you.” While DuckDuckGo’s average of 15 million queries a day is a drop in the bucket compared with Google’s 3.5 billion, the search engine’s recent surge in popularity is noteworthy.
At the same time, Columbia Business School found that 75% of consumers are willing to share their data if they trust the brand. Even more (80%) are willing to do so in exchange for special offers or data-enabled benefits, such as reward points and personalized recommendations.
Many consumers are happy to share their data with marketers—as long as it’s on their terms. So while transparency is hardly new, the GDPR updates the concept to put the ball more in the customer’s court.
The GDPR will essentially change data-driven marketing as we know it. But that’s a good thing. Marketers will have to legally justify every bit of data they’re holding, which effectively puts an end to several unpopular marketing tactics, including assumed opt-ins; long, jargon-filled terms and conditions; and taking people’s business cards to ultimately add them to email lists.
Many marketers also acquire data in sneaky ways, such as collecting cookies, which contribute to the industry’s lack of trust. The GDPR ends practices like that and comes with informed consent, which marketers can use to rebuild relationships with consumers.
Trust is certainly a missing element keeping many consumers from seeing marketers’ messages in the first place. There are 15 countries in the world where a quarter of the population uses ad-blocking software; 10 are in Europe. Ad blockers are particularly pervasive in Greece and Ireland, with a whopping 39% of people using them.
More than that, consumers are naturally going to spend more money with brands they trust.
Whether you’re a juggernaut like Google, which has four data processing centers in Europe alone, or a marketer with data on a single person in Poland, the GDPR is applicable to you. And while it certainly presents significant obstacles, there is also a huge opportunity.
Where data is concerned, nothing can hurt trust more than mishandling it. Two months ago, credit reporting agency Equifax had a data breach exposing the personal information of 143 million Americans. The brand’s perception (and stock) has yet to recover.
GDPR is going to change the world of data-driven marketing as we know it, forcing marketers to become more transparent. That’s a good thing, even if it takes some adjustment. It will also create opportunities for marketers to improve personalization, which we’ll investigate in part three of this series.
To learn more about how marketers can seize the opportunity with the GDPR, read SmartFocus’ ebook, “GDPR: How Marketers Can Seize the Opportunity.”Reblogged 1 year ago from www.clickz.com