How Will Data Privacy Regulations Change Digital Marketing?

Perhaps the greatest challenge for data collectors and marketers in the coming year will be complying with the regulations concerning the collection and use of consumer data. After years of mega-breaches of internet websites, consumers have awakened to the amount of private information that was collected and distributed without knowledge. In the first six months of 2019 alone, 4.1 billion data records were compromised via a disclosed breach of cybersecurity. A survey by the Internet Society and Consumers International indicated that 69% of consumers are concerned about how data is collected. The obvious irresponsible handling of personal data fueled worldwide condemnations of the collection, use, and security of personal information as well as enactment of regulations designed to give individual consumers more control of how private information is handled.

The General Data Protection Regulation (GDPR) was enacted in Europe in 2018 and soon became the leading legislative act to regulate the collection and handling of consumer data. More recently, the California Privacy Rights Act (CPRA) was passed and will go into effect on January 1, 2023. The GDPR requires companies to allow users the right to access data, the right to take that data and use it elsewhere, as well as the right for consumers to request that a company erase personal data completely from company records. The rules will alter data-driven marketing tactics forever.

While few if any marketers welcome the intervention of regulation, it is important to acknowledge that government intervention in a free market, more times than not, results directly from abuses of bad actors in those markets. According to the 2019 Edelman Trust Barometer Special Report, 81% of consumers said they need to trust a brand to buy from them. By 2023, it is predicted that 65% of the world population will have personal information protected by data privacy laws. Clearly, compliance cannot be ignored; but what does compliance require and how will it impact a company’s marketing tactics?

Senior marketing leadership needs to understand the practical impact GDPR and CPRA has on marketing efforts and take responsibility and control of first-party data collection. They must initiate actions to reduce dependency on third-party cookies and secure ownership of all the company’s customer data, centralize digital privacy compliance and develop in-house management of customer data procedures. Building trust among consumers, when it comes to handling personal information, should be the first priority going forward. Accenture discovered that 83% of consumers are willing to share personal data with organizations that they trust, but 79% have concerns about the methods a company uses to handle that information. Educate users on how information is being collected and used for the benefit of the customer to encourage them to voluntarily opt-in.

Soon social media platforms and apps will begin the process of permitting users to control the collection and sharing of personal data. Apps like Facebook, Instagram, YouTube, and Twitter will be required to ask users for permission to track data on them, and it is expected that majority of users will deny permission to sharing data. As a result, online advertising may become less effective to many brands and may limit advertising such opportunities for small to mid-size companies who currently rely heavily on the status quo to level the playing field with larger competitors. Measuring the success of digital campaigns will be compromised and require attention to identifying relevant solutions to the challenges spawned by the newly regulated environment.

Failing to be proactive and getting ahead of fast-breaking, comprehensive, and often punitive regulations can result in a huge financial penalty that can negatively impact a company for years to come. The effort to avoid harsh penalties for non-compliance starts with correcting past deficiencies in data privacy, transparency, and security. Regaining trust with consumers is paramount to recovering opportunities to connect and prosper in the digital age of marketing.