Data privacy in advertising; The consumers’ view
Data privacy in advertising is one of the most important issues facing advertisers and agencies in the digital media landscape. Data privacy concerns have stemmed in part from greater regulatory oversight, with the introduction of global privacy regulations including the General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), Brazil’s Lei Geral de Proteção de Dados (LGPD), the Act on the Protection of Personal Information (APPI) in Japan, and the UAE’s Personal Data Protection Law (PDPL).
However, there is also a grassroots drive for enhanced data privacy in advertising, with consumer privacy concerns having greatly increased in recent years. What are consumers’ current perceptions around this important issue, and what can advertisers and agencies do to better meet their needs?
Consumer privacy concerns
The challenge facing advertisers and agencies today is that while consumers continue to demand highly personalised and relevant content, they are also more concerned than ever about their privacy when online.
One survey by Boston Consulting Group and Google frames this challenge as a “consumer preferences tightrope.” Their findings are contradictory: even though nearly half of consumers are uncomfortable sharing their data for personalised advertising, nearly two thirds say they want advertising that is tailored to their interests.
Other studies suggest that data privacy in advertising is even more of a non-negotiable for consumers. According to research from Tealium, a customer data platform (CDP), an astonishing 97% of people are somewhat or very concerned about protecting their personal data. However, the same survey also reveals that while important, privacy is not the only motivation for consumers: 43% said they would provide “detailed data about themselves to a retailer for a discount.”
The value exchange
A clear quid pro quo is evident, whereby consumers are willing to exchange their personal data for tailored content that they regard as being of value to them. According to yet another survey, 63% of consumers now expect personalisation as a standard of service. For these consumers the value of personalisation is that they feel recognised as individuals.
It is important to note that the findings of these and other such surveys are reflected in how consumers behave in the real world. Where privacy is undermined, or the value exchange weakened, consumers act immediately. For instance, when WhatsApp updated its privacy terms in 2021, around 32 million subscribers switched to alternatives as a result of a perceived lack of trust in the new conditions.
Another way of framing this is that privacy represents an opportunity for advertisers and agencies to win new customers to their brands. New research from Google backs this up, with 43% of people surveyed saying that they would switch from their preferred brand to a second-choice brand if the latter provided a good privacy experience.
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Protecting consumer privacy
So how can advertisers and agencies protect consumer privacy while still offering the personalised content that they demand? An analysis of surveys on the topic suggests that empowering consumers and giving them transparency and control over how their data is used is a key enabler.
According to one study, nearly half (47%) of consumers say they purchase more from brands that outline how, where, and when their data is being used. Thirty percent said they only purchase from brands that demonstrate transparency. In the same survey, 94% of respondents reported that having control over the information provided to brands, and how that information is used, is important to them.
Advertising and privacy
Shifting consumer sentiment around data privacy in advertising, along with increased regulatory oversight, is driving a tectonic shift in how advertisers and agencies market to consumers. The days of using third-party tracking cookies are coming to an end. The industry is looking for an alternative that protects privacy and gives consumers greater control over how their data is collected and used, while also enabling sufficient consented data for the personalised experiences people clearly demand.
One significant innovation in this respect is the rise of alternative identifiers such as Novatiq’s Zenith and Hyper IDs, which are made available through the Fusion Platform. The Zenith ID enables advertisers and agencies to consistently recognise users securely and safely – without identifying them as individuals – by checking against the network intelligence of telco partners. Zenith helps brands create consented profiles of their users across devices and the open web, enabling them to personalise their content and engage with their audiences.
Meanwhile Novatiq’s Hyper ID enables advertisers and agencies to request audience segments to activate their campaigns. This transactional ID is also verified by telco partners, and as it is linked to the advertising inventory slot it is one time use only, ensuring that no data is passed down the bid stream. The Hyper ID is generated in the publisher ad request and distributed through the automated advertising ecosystem, enabling risk-free first-party audience activation at scale.
Significantly, consumer consent lies at the heart of the approach, with consumers easily able to give or withdraw consent for companies to process their intelligence for each transaction.
Telco-verified IDs, such as Novatiq’s Zenith and Hyper ID offerings, can square the circle of consumers’ competing demands for personalised content that is relevant to their lives and enhanced privacy online. They deliver the control and transparency people demand, enabling them to trust that their information is used only for its intended purpose, while at the same time enabling compelling digital content and experiences.