THIRD-PARTY DATA IS IN A TRANSITION PERIOD

In 2018, consumers learned all about third-party data—the data collected not by the companies they are directly interacting with online, but by others lurking in the background—when Cambridge Analytica used information harvested from Facebook to target political ads without approval of identified users. This scandal shattered the illusion that large corporations were handling personal, identifiable data responsibly, and set off a massive review of how digital publishers, social media platforms and other companies should handle the consumer information they are stockpiling.

Despite these concerns, marketers and consumers continue to share mutual benefits from this collected data. Consumers are provided with a customized experience every time they open their browser, while marketers and brands are able to provide a specific, consumer-first approach. Consumers, especially millennials and Gen Z, LOVE providing their opinions and having their digital world customized or customizable. They are willing to share their data, but the trust factor cannot be taken for granted. The way data is collected is changing, and brands and marketers will need to be very transparent about this moving forward.

Changes to Data Collection

Due to the complexity of human behavior in a digital age, predictions and behavioral assumptions now require the compartmentalization efforts of companies like Dstillery, Epsilon, Oracle, ShareThis and many others. To track audience content consumption, buying habits and online behaviors, these companies have mutual data-sharing agreements that allow them to place code on various websites (think social media platforms or digital content publishers) to grab information. The data is then anonymized, passed or sold to marketers, nicely categorized and packaged with a ribbon on top. 

Collecting this data is getting harder for a number of reasons. As a result of the Facebook/Cambridge Analytica scandal, new laws and regulations have been created to oversee corporate use of consumers’ behavioral third-party data. Specifically, the California State Legislature passed the California Consumer Privacy Act (CCPA), and the European Union passed the General Data Protection Regulation (GDPR). To better understand CCPA and GDPR, take a look at the extensive analysis by the American Bar Association HERE. These regulations have forced publishers and marketers to be more transparent about how the personal data is being used. Virtually every compliant site now shows a welcome image covering the content that explains the publisher’s data-sharing policy and provides the user with an option to accept or decline the terms. 

These regulations have also hastened the death of the cookie. For the past couple decades, a “cookie” placed on the end user’s browser could collect data on that user across devices, platforms and channels for up to a year. This time frame has now been reduced to three to seven days across Apple iPhone devices using Safari as the default browser, and Google announced it will sunset all cookies in its Chrome browser sometime in 2021, across all devices.

Opportunity for Transparency

In change there is opportunity. A recent article published by Epsilon explains that these restrictions are forcing marketers to reevaluate their personalization strategies, but points out, “… it also means brands have the opportunity to build trust through transparency with their customers, and companies will become better stewards of personal data by building privacy protections into their marketing platforms.”  

Marketers and their clients must show that they respect the data and provide—in plain English—a clear explanation of the bargain they are making with consumers. Both the Trade Desk and Google have recently announced their plans to implement more transparent tracking using opt-in email addresses, and through authentication like Gmail. In addition to transparency, new protocols such as these will help consumers better control their own data by allowing them to decide more precisely what of their personal information they are giving up, and what they are receiving in exchange. 

When these changes go through, brands will initially find that their opt-in lists have dropped in total volume; however, the lists will also prove to be leaner and more efficient. Publishers and marketers will need to take stronger, proactive measures in removing opt-out consumer data while cultivating those who have stayed on with more dynamic, creative executions across channels and devices. 

Transition Period

Consumers, brands and marketers will need time to reevaluate these relationships and properly educate one another on yet another “new norm.” This will likely take a couple of years, as new methods of data collection are tried, tested and tweaked. Different companies will institute their own methodologies, and we will all wait and see which one sticks.

Until then, contextual targeting will likely take center stage because it does not involve cookies, emails, authentication or any personal data. Instead, contextual targeting focuses on the content alone and reaches the reader when they are most engaged in an environment of relevance—such as targeting credit card ads to those who are reading content about interest rates. This technology is coming of age, as complex software not only looks at keywords, but also aims to understand the relationship between sentences, paragraphs and pages. Eventually, third-party data and contextual targeting will work efficiently in tandem to provide readers and consumers a content-rich environment.  

Building Trust

Third-party data is an important part of marketing that creates a mutually beneficial relationship between brands, marketers and consumers. Unfortunately, as recent scandals show, it can be used for very different—and less scrupulous—purposes. We need to build trust back.

Ultimately, consumers will continue to seek out value and show intent toward products and services that are relevant and match their interests.  With more transparency into how we use information about consumer online behaviors, marketers can turn that retargeting that is now considered “creepy” by many into a “thank you for reminding me to complete my purchase.”

— Art Binder

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