The fraught world of privacy and targeting marketing

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The fraught world of privacy and targeting marketing

For years marketing, both online and offline, has been directed towards ever more sophisticated targeting and segmentation to the point of personalisation. Greater relevancy of the content to the customer means that they are more likely to convert and/or engage. There is a conundrum, though, in terms of gathering the data in the first place to shape and inform the content, ad or offer to that user.

What is the problem?

With the increasing amount of data collected and stored about individuals, there is a reaction against this by some users – not necessarily by the majority but certainly by a significant portion. This is evident when you examine the growth of private search engines and the move to secure sites with HTTPS to prevent anyone being intercepted whilst browsing. People aren’t happy and they’re taking steps to protect themselves from perceived invasions of privacy by search engines.

The importance of technologies’ and websites’ privacy status has stepped up even more with the recent debates, legislation and legal actions between the technology sector and governments. Apple is currently battling the FBI over encryption and the rest of Silicon Valley is also in the process of, or rumoured to be, stepping up encryption to ensure user data is protected from government bodies, and not just from hackers. WhatsApp is looking at expanding encryption to voice calls and Facebook Messenger and SnapChat are also looking at securing their messaging services.

Regardless of where you stand on the technology-encryption-terrorism debate, users are increasingly being made aware of privacy issues and the storage and use of their data and brands are responding by prioritising this as part of their marketing pitch.

Is privacy an advantage or disadvantage in the marketing pitch? Does that mean marketers need to be more careful and considered with audience targeting?

What do users think?

A consumer survey from May 2015 by The Future Foundation identified three consumer attitudes to privacy:

  • Pragmatists 54%:
    • They consider how to manage their data and therefore decide what and how to provide their data to brands.
  • Fundamentalist 24%:
    • They are ideologically opposed to sharing their data.
  • Not concerned 22%:
    • They aren’t bothered about sharing their data.

Privacy is therefore not as big a concern to consumers as it may be to the technology companies and brands.

To 24% of the population, privacy and cautiousness over tailored targeting is needed, but for the remaining 76% it’s about the value exchange for sharing their data.

Value exchange

This is the heart of the privacy debate for me – how the data I provide is being used and I get something I value from it. It adds value to me and isn’t just for marketing, whether this is data I deliberately share or whether it is data inadvertently gathered about me – for example, what websites I visit and what actions I take on them (Amazon uses the data it gathers on me to personalise its recommendations, which I like when I’m looking for a new book or film to watch as it is genuinely helpful).

Data shouldn’t be gathered if nothing’s going to be done with it – that is annoying and feels intrusive. Lots of brands with loyalty cards were guilty of this in the past, gathering huge amounts of data about their customers but not doing anything with it or using it just for very “pure sales” – for example, trying to upsell me from my regular, tested and trusted purchase to something which costs more.

My data has a value to a brand but also something I can get value out of too – and that is the key to targeting marketing.

What does this mean for marketing?

There are two key questions for marketers around the value exchange:

  1. What value is being genuinely added to the user and why should the user care about that value?
  2. What choices and options are you giving users to engage with your brand (or are you forcing them to only do one thing/take one path of engagement with you)?

Ensuring you are delivering value via something a user cares about is actually harder than it sounds. It is about understanding the intent behind a purchase or action and the outcome that customer is looking for. For example, imagine you are running a financial services business and someone enquiries online for advice. Yes, you are selling and they are buying financial advice, but the customer is actually buying peace of mind about their financial position for their children’s future, or ensuring they can have the lifestyle they want in retirement. They’re buying peace of mind, however much it looks like something else.

The value the business provides here is in understanding and responding to that motivation appropriately. This “value added” can be demonstrated through the content on the website, testimonials and social messaging.

When it comes to choices offered to your customers, are there different levels of engagement and interaction available or are all customers forced into a single path? A very simple example of this is the checkout process and whether a guest checkout option is available. For those customers who don’t want to or don’t see the value in creating an account, they don’t have to but it shouldn’t be a barrier to purchase. Also, you should be persuading customers of the benefits of creating an account with your brand and explaining how you’ll be using the data you gather. Again, content is key in explaining the value exchange here but conversion optimisation should also be kept in mind to make sure that message is as powerful as possible.

Be transparent

Fundamentally, you have to be transparent with your customers. If you are going to collect their data, you need to explain what you are gathering, how it will be used and what they will get out of sharing it with you. This then at least allows them to make an informed decision.

How do you use your customers’ data? Have your customers embraced sharing or are they resistant to it? Let us know @rocketmill.