Personalisation vs Privacy 2022: Can They Work Together?

Studies suggest that ‘80% of consumers are more likely to make a purchase when they are presented with a personalised experience’ (Falcon) so it’s no surprise that many marketing team invests so many resources into personalising their marketing content. But as the focus on data privacy intensifies and the introduction of new data privacy regulations, what does the future hold for personalisation?

The Privacy Paradox

Personalization requires data collection and analysis, and data privacy often hinges on restricting these practices. Advanced forms in particular rely on the disclosure of personal data such as browsing history, purchase habits, and demographics which is often analysed and collated using automated tools and machine learning. Businesses are under an increasing amount of pressure to improve the way they collect, store, manage, and use their data as consumers become more aware of how their data can be shared online and misused.

European studies suggest that ‘55% of people fear criminals accessing their data’ and ‘30% are concerned about businesses, advertisers, and other governments accessing their data without them knowing’ (Digital Signage Today). One-quarter of people use an ad blocker and 76% of internet users are not comfortable with how tech companies are handling their data (Falcon). Concerns around data security have led to constant scrutiny and several changes to global data protection legislation which all impact how businesses can manage data. With such a negative attitude towards data collection and use by businesses, where is this ‘paradox’?

The Privacy Paradox refers to the disconnect between consumers attitudes and their behaviours, as well as between the views and actions of the customer and company. It is a continuous point of tension between a firm’s need for great consumer experiences, with personalised ads attracting more attention and lasting longer in the memory and a customer’s need for privacy. On the other side, consumers want personalised experience and are actually willing to leave brands that don’t offer them but object to sharing their data. Consumers rarely take any steps to protect their data either. People often browse websites and sign up to products without even looking at the privacy policy when entering all their details.

Hyper-relevant targeting, which relies on personal data and cookies, is such a critical part of many business’s digital marketing strategies, yet within increasing dissatisfaction and discomfort around the way businesses are using data, could personalisation methods become more complex?

What’s Next for Personalisation?

In response to increasing concerns over data management, Google introduced their Consent Mode in 2020. Google explains that “Consent mode allows you to adjust how your Google tags behave based on the consent status of your users. You can indicate whether consent has been granted for analytics and ads cookies. Google's tags will dynamically adapt, only utilizing cookies for the specified purposes when consent has been given by the user.”

This is a great start by Google, but the truth is that most businesses aren’t prepared to shift their strategy to ensure data privacy compliance whilst still driving marketing success through personalisation.

Forecasts still suggest a positive outlook for personalised marketing, with estimates hat the global personalisation software market will grow from $6.7million in 2020 to &1.8billion by the end of 2025 (Emarsys), and that personalisation will continue to help businesses attract and retain new customers through desktop and mobile experiences. However, consumers are limiting more and more of the data they provide to retailers when shopping online which makes personalisation more challenging.

Some consumers are choosing to adopt privacy-first browsers like Brave, and other browsers such as Chrome and Firefox are increasing their privacy offerings. What this means is that marketers need to reduce their reliance on third-party data and cookies to drive personalisation, as at some point in the future, much of the required data for this simply won’t exist. This is where zero-party data comes in.

What is Zero-Party Data and Why It Is Important?

Forrester defines zero-party data as “data that a customer intentionally and proactively shares with a company”. Most consumers will want to hear from brands that they like buying from and interacting with and should therefore be willing to disclose their zero-party information.

The benefits of zero-party data include:

• The data is accurate and reliable because it has come directly from the customer
• The data is relevant and tells companies specifically how they want to be interacted with
• Zero-party data is highly cost-effective because the data is handed over, not paid for
• Data protection regulation compliance is no longer a big concern as the data collection methods and sources are clear and secure.

Zero-party data helps businesses engage with customers and potential customers in a meaningful and secure way. All data is volunteered by the customer knowingly which also creates a higher level of trust with the brand, whilst still using personalisation techniques.

Build Your Personalisation Strategy for 2022

Great digital marketing strategy starts with great talent. With personalisation expected to remain a key part of digital marketing in 2022 and beyond, you need the right digital talent to plan and execute your marketing personalisation strategy.

If you’re looking to build or scale your marketing function, get in touch for support hiring exceptional digital marketing talent right up to CMO level across Germany.

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