Data hacks: a detrimental hurdle on the road to personalisation in marketing

By Andreas Pouros | 09 Oct 2015

The EU's decision to replace its 'Safe Harbour' system, which allows over 4,000 companies to transfer personal data to the United States, could have big ramifications for marketers, potentially putting the brakes on initiatives which use consumer data to deliver a more personalised shopping experience.

The deadline set by the EU has left many companies scrambling to introduce new legal measures to ensure their everyday business can continue as normal. Yet the pressure isn't just from the EU as consumers are also wising up to the fact that firms are sharing their customer's personal information across the globe and noticing the risks that this entails.

Cyber-attacks: an unwelcome reminder of the value of data

Hacks on Ashley Madison, Target and JP Morgan demonstrate to consumers that the data they share is vulnerable, no matter the size of the company.

Yet, customers are now expecting to experience a brand from anywhere at any time, and marketers need to adhere to this. This pressure on businesses to create a seamless experience for their customers has meant many firms have become reliant on data, however as data sharing increases so do the risks of more attacks.

The EU privacy law: a guide or a barrier for marketers?

The EU's effort to introduce the privacy law will provide clarity for many businesses on where they stand when it comes to user's data privacy, and ensure that they put the correct processes in place for the business to continue to develop whilst adhering to EU standards. Nevertheless, the law also creates a risk of regression in the evolution of personalisation, with many marketing teams being limited in their use of personal data which could result in a less personalised service for customers.

To find a solution to this issue, marketers can respond in two different ways. The first option is for businesses to stand up and reassure their customers by providing a guarantee around how their data will be used and outline the benefits they will receive in exchange. The second option, is to react by doing a U-turn and curb on any progressive data strategies they have been working on.

Google has noticed consumer concerns around privacy, and has developed a tactic to fight any negative data privacy perceptions. The online giant has used the topic of privacy as a differentiator; telling their users across EMEA and Asia exactly how much data they are collecting and outlining the reasons why via a privacy hub called "My Account".  This option allows for people to change their security settings according to their own needs, including what personal information they include on their Google account and blocking ads from specific advertisers next to their search results.

What is the ideal solution?

Google's open approach to privacy demonstrates to their users that they are aware of consumer concerns, but for many marketers a commitment to marketing innovation, whilst reassuring users on data privacy, is the most sustainable reaction to data hacks.

Even though businesses face the challenge of continuous risks of cyber-attacks, marketers will still need to get a more in depth knowledge of their customer to reach their goal of true personalisation.

An essential tool for marketers in creating a unique experience for their users is programmatic advertising. But this advertising format needs to evolve. More platforms must provide the level of personalised inventory needed for customers to avoid feeling like their ads are being a nuisance. For programmatic advertising to continue improving, more access to consumer data will be necessary - which is a challenge in a climate of consumer anxiety.

Consequently, the best solution for marketers to serve their customers is to find a balance between useful and creepy. In most cases, consumers are open to receiving targeted and relevant content by brands they have a relationship with. However, when an unknown brand enters a consumer's online life it can feel intrusive, which can result in consumers being sensitive, especially in reaction to recent cyber-attacks.

The data hacks may be a startling reminder of the potential impact of sharing your data, but for marketers, data is still an essential resource in developing a personal experience for customers. For marketers to be successful in reaching the holy grail of personalisation, they will need to remember their customer's needs over their own commercial ambitions. If these lines get crossed, it may result in customers going elsewhere.

This article was first published on MyCustomer.

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