Personal data collected through surveillance-based means is used commercially for marketing around the world. The problem: companies never had permission to use this data in the first place. Change is coming, and in a way that will put the consumer firmly back in control of their data.
European lawmakers are working on the most significant digital reform in two-decades. The Digital Services Act (DSA) will standardize rules in the digital landscape, and the Digital Markets Act (DMA) will ensure fair and open digital marketplaces. The legislation is way ahead of similar changes in the US.
Furthermore, this month, The European Union’s lead data protection supervisor (EDPS), Wojciech Wiewiórowski, has recommended that a ban on targeted advertising based on tracking internet users’ digital activity be included in the overhaul.
The messaging set by the EDPS sets the groundwork for the negotiations and debate that will soon take place. Experts believe that the EDPS has established a strong line early to avoid consumer rights dilution during the lengthy co-legislation process.
What does this mean for targeted advertising?
The EDPS is concerned with online advertising, recommender systems, and content moderation and urges legislative measures to be established to decrease risk to individuals. Recommender systems have been known to steer opinion and even radicalize — MIT found that “such personalized recommendations do more than introduce consumers to new products; they also shape their future preferences and behaviors in unexpected ways.
The EDPS states that “such measures should include a phase-out leading to a prohibition of targeted advertising based on pervasive tracking, as well as restrictions concerning the categories of data that can be processed for targeting purposes and the categories of data that may be disclosed to advertisers or third parties to enable or facilitate targeted advertising.”
When the laws change, targeted advertising in its current guise will be no more. Instead, permission-based data will reign, allowing companies to target consumers with complete transparency and authority.
Over the pond, Apple CEO Tim Cook urged EU-makers to double-down on GDPR and gave a speech warning of the harm AdTech is wagering on society as a whole. The message is clear, and it’s not just lawmakers who are echoing the pro-privacy message. It is global.
“Sensitive and personal data does not belong in the hands of platforms that rule the market (so-called gatekeepers) or in the hands of states.” – Mattias Hofner, Business Insider.
Where to from here?
We believe that there is a better way to reach audiences through value-exchanges that serve both consumers and the company transparently. When passed, this legislation will herald an enormous shift in how data is collected and put to. Many companies will be getting ahead of the law now, and we’d recommend a review of your data acquisition and implementation strategies.
Identifying how your organization collects and actions data is the first step in understanding how these rules will affect your business. With the continuous onset of privacy and changes to third-party data and tracking, organizations need to establish trust to capture data and gain permission to deploy it, providing customers with maximum control of their experience.
Our predictions for the new world
- Earned data will be king
Earning consumer data will become the new normal for businesses. This is defined simply by data provided by the consumer with full consent and usually in a value-exchange. Earned data has a long-term focus, going far beyond clickstream and other traditional less transparent data sources.
Earned data champions customer empowerment and is a massive opportunity for brands to redefine their data strategy and business culture.
Interactions with your consumers must be fun, engaging, entertaining, and easy to follow. If not, you run the risk of putting up roadblocks that will put consumers off from sharing information with you.
- Enhanced relationships with consumers
Companies talk a good game around relationships with their consumers. Still, if at the heart of your marketing lies clickstream and third-party data, any connection is likely to be forged through interactions at a customer service level rather than from the very outset – which is what earned data achieves and builds.
Without surveillance-based data, companies will have no choice but to reach their consumers in a way that establishes trust and rapport on a one-to-one basis. The rub: this requires fundamental cultural change. The benefits, your consumer base is likely to be highly-engaged and driving their journey with you.
- Consent by design
How do you collect consumer data with permission every time?
Weaving consent into your communication and interactions with clients isn’t as difficult as you might think. In our recent consumer insight study, we learned that 83% of consumers are willing to share their data if they know what the company will use it for.
Turn consumer consent from a friction point into a foundational element of your relationship and brand experience by incorporating consent by design.
If you’re worried about how the European legislation will affect your business — get in touch with 3radical. Our practice involves consultancy and implementation; we can help you understand the opportunities associated with moving to earned data.