Balancing personalization and privacy

Marketers and advertisers everywhere are familiar with the growing tension between the demand to deliver personalized content to consumers and the need to remain compliant with emerging privacy regulations. On one hand, organizations have long understood the effectiveness of personalization by presenting the right content to the right person at the right time. On the other hand, the expectation for handling personal data responsibly is higher than ever, with regulators imposing serious penalties on organizations that fail to follow sound practices.

The demand for personalization

The benefits of personalization are numerous, and include:

• Increased conversions across outbound marketing channels such as email, as well as online channels.
• More efficient spend of marketing and ad dollars, and lower acquisition costs (there’s no point in serving swimming pool-related ads to people living in apartment-dense areas, for example).
• Enhanced website and mobile app experience, leading to lower bounce rates and more time spent on-site.
• Improved customer experience and customer satisfaction score (CSAT).

Consumers have come to expect that the brands they engage with cater experiences to their current context. Failing to meet these expectations leads to frustration and disengagement, with two-thirds of consumers saying that being presented content that isn’t personalized would stop them from making a purchase (according to CMO by Adobe).

It's clear then, given all of the financial upsides of personalization, why the industry norm is moving away from a one-size-fits-all marketing and user experience. Over 80% of organizations report seeing measurable lift in business results from these efforts.

Enabling personalization requires a data-centric approach to campaign planning, execution and measurement, as well as investments in technology infrastructure. Increasingly sophisticated marketing technologies can deliver omni-channel, real-time content to highly targeted audience segments. Most also offer user-friendly AI capabilities for true one-to-one delivery. At the centre of all this, of course, is consumer data.

The importance of privacy compliance

While consumers are more understanding than ever about the wealth of data organizations have on hand and its role in powering the personalized experiences they’ve come to appreciate, they are also increasingly concerned about how that personal information is used and handled. Data breaches, particularly when occurring at a large scale, can make headlines that not only damage brand trust and reputation, but also heighten these privacy concerns. And while consumers understand, for example, the ways that their online browsing behavior is tracked and used to display ads or to improve their browsing experience, they also want a sense of control over what data is collected, and how it is handled and protected.

So, what can organizations do to balance both?

We all know that Canadian companies are subject to the principles set out in Canadian privacy law (check out the CMA’s Guide to Privacy Compliance for more). Maintaining transparency on how data is collected, used and shared - through a privacy policy kept up to date, or through “just-in-time” pop-up notices, for example – is important to keep customers informed. Collecting consent (whether express or implied) and providing opt-out options specific to various data uses allows organizations to provide consumers with control and choice. This not only supports privacy compliance, but also builds trust with consumers. Because these preferences are so integral to the data management process, some customer data platforms (CDPs) now offer direct integrations with consent management platforms (CMPs), facilitating compliant data activation across each use-case. Building up first-party data, whether through means of surveys or tracking behavior (based on purchase data or other metrics) on owned online and offline properties, is also increasingly vital. Owned channels offer the ability to collect information and personalize based on trusted sources. And in general, while information is an asset, having well-defined use cases allows your organization to collect and activate using the minimum amount of data required.

It is possible for brands to extract all of the benefits of personalization while still ensuring privacy compliance and maintaining consumer trust. Emphasizing responsible practices and putting ethics at the centre of each data decision is key and will ensure the long-term success of personalization efforts.

This blog is part of the CMA Adtech Committee’s Bi-Monthly Blog Series. Have an adtech-related question you want answered in an upcoming blog? Drop us a line.