In an era when consumers are increasingly conscious of their data privacy rights – a cultural shift that is changing the relationship between them and the organisations with which they interact – trust has become the new currency.
As a result, brands are putting privacy high on their agenda in terms of the relationships they have with consumers and ecosystem partners, and the term “privacy by design” has been coined.
Privacy by design means building data protection into the design of technology products and services – integrating it into technology when it is created (rather than adding privacy-enabling features at a later date) makes data privacy procedures easier to stick to in the long term. And pledging a privacy-by-design approach also helps brands to build all-important trust with consumers and provide them with something of value.
The rise in privacy concerns
The 2018 GDPR regulation in Europe, followed by the 2020 CCPA regulation in California (with various other legislation in progress or pending around the world) make personal data privacy a boardroom issue. Individuals are taking a stand over the collection and use of their personal data by the organisations they interact with. Similarly, companies can no longer collect and store their customers’ and prospects’ data without clearly defining the purpose for doing so.
In addition, there is a paradigm shift in digital advertising initiated by Google and Apple phasing out third-party cookies. At the end of 2021, Chrome and Safari combined represented more than 83% of the browser market share worldwide; in the very near future companies will no longer be able to rely on the traces left by individuals while browsing the internet to retarget them with advertising.
To put this into perspective, in 2020 (the year CCPA came into action) a KPMG survey found that 87% of Americans view data privacy as a human right and 84% are open to state legislation giving consumers more control over their data. Advertising that is “over-personalised” and intrusive – an ad about a brand discussed during lunch break with a colleague, for example – played a role in people’s resistance to data collection by companies.
Organisations face the challenge of collecting data from their consumers to offer them personalised and relevant user experiences, while coping with the lack of targeting and measurement efficiency arising from the (third-party) cookie’s demise.
Privacy and the brand-consumer value exchange
Collecting consumer data (personally identifiable information, or PII, such as emails for example) requires respecting a certain number of privacy rules introduced by the ecosystem and the regulators.
However, while there is no doubt that these rules are complex, they should not be viewed as being imposed to stop organisations from collecting data – rather, the aim is to build trust between consumers and these companies. Indeed, the regulations should be seen as a value exchange between consumers and brands: consumers trade some of their personal information in exchange for a personalised and enhanced consumer experience delivered by the brand.
For instance, a survey conducted by Google and BCG highlighted that 45% of North Americans are not comfortable with sharing their data to receive a personalised ad experience. But, in the same study, two-thirds of North American consumers stated they want ads personalised to their interest.
This paradox regarding personalised experience and privacy illustrates the importance of transparency and education when building trust with consumers. This requires allowing people to regain ownership of their personal data, with tools such as opt-in and opt-out interfaces and the right to be forgotten, as well as simple explanations as to why the data is collected.
Therefore, a privacy-based relationship between brands and consumers is a way for companies to operate in a more consumer-centric way and offer a tailored experience to their clients. And it makes the case for including privacy by design in the technology and organisations on which companies build their business.
Data models, collaboration and technology for a privacy-first world
Initially, the new privacy paradigm pushed companies to unify their data models and to look for data collaboration opportunities.
Privacy regulations forced beneficial change within companies by taking data out of silos – if a consumer asks for their data, it should be easily accessible. And, anxious about losing target audience insights as a result of only having access to their own (limited) pool of first-party data, companies are collaborating with other organisations that have complementary first-party data.
From the boardroom to sales and marketing teams, it is understood that tackling the privacy-related challenges also offers new opportunities. But these can only be realised by conducting partnerships in an ecosystem that secures data privacy and ownership at the same time.
As a result, the new privacy paradigm is pushing companies to rethink their tech stack, with data clean rooms providing a good example. Driven by the need for a secure environment in which companies can collaborate, clean rooms are privacy-by-design technology solutions because their raison-d’être is for data protection, meaning it is embedded in every aspect of the platform.
Clean rooms are safe and neutral spaces for data collaboration and partnerships to exist. They enable data scientists to leverage data to better plan, activate and measure across the ecosystem, without either party (or parties) having access to the other’s customer PII data, while privacy controls such as encryption prevent data being used inappropriately.
Privacy by design underpins consumer relationships
A privacy-by-design approach is changing how companies operate and the technology they rely on – everyone throughout the organisation needs to be on-board and speaking the same language when it comes to privacy-related goals.
And while at the outset this new way of working can appear onerous, the benefits of adopting it go beyond simply being data privacy compliant. Undertaken with the right mindset and technology, privacy by design delivers value to consumers and builds trust for the long term.
Emilie Gazeau is senior director at Artefact, a data science and marketing consultancy.