For two decades, the marketing and advertising technology industries have built increasingly sophisticated and integrated solutions for marketers and agencies based on the assumption of a largely uninterrupted flow of data from both inside and outside organisations. Marketing technology (MarTech) often relied on personally identifiable data, while advertising technology (AdTech) relied more on anonymised data — usually in the form of cookies.
Initially, the two worlds operated almost autonomously — but increasingly, they work in tandem. The driving force behind the increasing levels of integration is the need to compete on the quality of the experience a brand offers to its customers.
There was a second assumption — the inexhaustible tolerance of consumers for how their information is used. While privacy and data utilisation have bubbled away — often obscured beneath the customer experience imperative — the last year has proven to be a watershed for the understanding consumers have about how their information is used.
Three developments in particular stand out:
- The introduction of the European General Data Protection Regulation (GDPR) put privacy on the front pages of the business press, not to mention mainstream media. While it is aimed at European citizens, its impact is global as it affects all companies that trade with Europe — or indeed with European citizens. GDPR changes the game. For instance, at the stroke of midnight on the 25th of May, 500 million Europeans, among the world’s affluent consumers, were gifted the legal right — and a regulatory mechanism — to be forgotten.
- The revelations that third parties inappropriately used social media data to influence political campaigning in the US — in what was already a fairly aggressive political climate — also rang alarm bells for users who had become complacent about the data they shared on social media. Consumers who were comfortable sharing their data with a private company suddenly found their data — and that of their friends — had been dragged into the realm of public political debate without their consent.
- Finally, the publicity in some quarters to implement stronger privacy protection into browsers to make retargeting consumers using cookies harder also raised the profile of the debate.
Brands spent years convincing themselves that consumers understood what was happening to their data and approved of the value exchange taking place. Suddenly, they discovered that maybe those consumers were a little more uncomfortable — and frankly surprised — with what was happening.
Mary Meeker calls it the privacy paradox: how does a brand balance privacy with the need to collect data to refine products and services? As she noted in her 2018 State of the Internet presentation, “With personalisation, data improves engagement in experiences and drives growth and scrutiny”. She explained that “Internet companies are making low-price services better, in part from user data. Internet users are increasing their time on Internet services based on perceived value. Regulators want to ensure data is not used improperly, and not all regulators think about this in the same way.”
When companies get it wrong, the impact is immediate and the damage to brand perception can be lasting.
Gartner’s Andrew Frank called the climate at the time “the age of weaponised data”. His colleague, Augie Ray, noted that “It is important to recognise that the company is facing this loss of satisfaction, loyalty and brand reputation not because of any change to its app or service, but because its leaders set priorities that encouraged revenue growth from advertisers over its customers’ privacy.”
Company leaders around the world — who largely left such issues in the hands of their operational managers — took notice. Suddenly, consumer privacy and the need to both protect data and treat it with the respect afforded to a valuable asset became board-level issues.
That was borne out in global research by executive technology recruiter Harvey Nash in conjunction with KPMG, which found that boards had suddenly promoted privacy to the top of their agenda. The research, one of the largest projects of its kind in the world, studied responses from almost 4000 IT leaders in 84 countries with an aggregate spend of over $US300 billion.
The authors of the report wrote that concerns over data breaches — along with the impact of policies like GDPR — have led to a ratcheting up of investments in data architectures. IT leaders find themselves on the frontline of this consideration. In fact, the study found that the fastest-growing IT priority for boards is managing operational risk and compliance.
But while IT has already had a strong governance culture, its job has been made more complicated in recent years by the explosion of SaaS-based applications that allow accelerated adoption of technology and very strong improvements in capabilities, without tapping into CapEx budgets — for which approval can often be difficult. The mission has become to ensure line managers like CMOs get access to the world’s best marketing technology, and that the MarTech can be integrated into the overall technology and data architecture of the enterprise in a way that is effective, secure and complaint.
To this end, IT managers need to be brought into the conversation around platform decisions such as marketing, advertising and analytics early in the process. This needs to happen, not so IT can remove the freedom of CMOs to make the best choices for their needs, but so that data marketers can build great experiences that flow seamlessly across the enterprise’s many customer touchpoints safely, securely and with full compliance to internal policy and external regulations. Ultimately, that is the way that brands can build consumer trust.
About The Author
Andrew Birmingham is the director of the Which-50 Digital Intelligence Unit of which Adobe is a member. Members provide their insights and expertise for the benefits of our readers. Membership fees apply.