Consumer Trust and Privacy: A Challenge

Privacy concerns have reached a boiling point. Consumers, regulators, Web browsers, advertisers, and brands... all are evolving to meet the changing privacy landscape. Marketers are considering how to best reach customers while respecting their privacy.

Let's dive into what lies ahead for consumer privacy, as well as what brands can do to gain or maintain consumer trust in order to derive a competitive advantage.

The Impact of Consumer Privacy

With the implementation of the California Consumer Privacy Act (CCPA), effective January 1, 2020, marketers can expect to see more states in the US introduce their own regulations around consumer privacy, eventually leading to nationwide legislation.

Following in the footsteps of the UK—its data protection authority, the Information Commissioner's Office, has levied hefty fines against companies such as British Airways and Marriott International for violating the General Data Protection Regulation (GDPR)—expect to see an increase in the number of fines in the US in relation to privacy violations.

Future years will bring more legal battles for companies like Facebook, which will be forced to change how marketers target ads to consumers.

Browsers' and Manufacturers' Battle Over Privacy

As consumers' attitudes toward privacy change, personalized experiences that provide consumers control over their data are imperative to a brand's success.

The desire for consumer control over data now forces browsers and manufacturers to continuously update versions of their systems to address consumer privacy concerns, such as the removal of cookies, decreased use of location data, and more. To avoid losing consumer trust, Web browsers will strive to create an appearance of being privacy champions that put customer trust and interests first.

We will see companies lean into privacy as a competitive differentiator. This "competing" around privacy will cause major brands to make bold claims on their privacy offerings.

In 2019, Facebook released its Privacy-Focused Vision, which many found disingenuous and downright laughable. However, expect more brands to follow suit.

With no organization wanting to be seen as "anti-privacy," look for brands to present more options to customers for maintaining anonymity and provide more transparency about what data they're using and how it's accessed.

Digital Advertising Overtaken by Walled Gardens

Lack of transparency, performance fraud, ad-blocking, and spamming ad frequency are hallmarks of the industry that is digital advertising. The result is abject engagement rates.

Because of the "walled gardens" created by advertising behemoths Google and Facebook, we'll see digital ad formats become less personal in 2020. This is a complete shift from the hyper-targeted advertising that has plagued us for the past 10 years.

Expect to see a resurgence of marketing via extremely specific media outlets in order to target the right audience—e.g., an archery equipment provider that advertises in Bowhunting Magazine.

Disruption of Traditional Marketing Cloud Vendors

Traditional marketing Cloud vendors such as Adobe, Oracle, and Salesforce have long relied on cookies to "spy" on consumers, documenting their behavior to help brands market to those who are otherwise unknown users. However, those tactics aren't now as easy as they once were.

Customers no longer want brands snooping on them and inferring what they like. Brands must adapt to a new, non-invasive way of reaching consumers or risk losing their share of market.

In the years ahead, marketers will pivot to using zero-party data—i.e., data intentionally and proactively shared directly by the consumer. This strategy drives personalized marketing with consumers' permission to build direct relationships with them.

Resurgence of Loyalty Programs

Finally, expect to see brands double-down on loyalty programs to reward ongoing one-to-one customer interactions.

Increasing consumer data privacy legislation and moves to restrict the use of tracking cookies will create a paradigm shift in brand-to-customer communication. However, many consumers will willingly exchange personal data for loyalty points, personalized offers, and perks.

In the coming years, we'll see a resurgence in loyalty programs as a means to gather permission-based data and drive customer engagement. When done right, this strategy can help deliver customer experiences that develop affinity, attachment, and trust between a brand and its customers.

* * *

In 2020 and beyond, consumers will reward brands that make a genuine effort to ensure their data strategies evolve by baking privacy into their solutions, moving away from tracking via cookies, and moving toward using data that comes directly from the consumer to offer personalized experiences.

Those who invest in loyalty programs that offer the right rewards at the right moment, give consumers a voice, and create an emotional connection between brand and audience will gain consumer trust—and so experience significant increases in visit frequency and spend for the foreseeable future.

More Resources on Consumer Privacy

Trust and Privacy: Reaching Today's Connected Customers [Infographic]

Transparency and Trust: The Key Links Between Data Regulation and Customer Experience

How Concerned Are Consumers About Online Privacy?

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ABOUT THE AUTHOR

Richard Jones is CMO of Cheetah Digital, a cross-channel customer engagement solution provider for many of the world's top brands, including American Express, Hilton, Walgreens, and Williams-Sonoma.

LinkedIn: Richard Jones

Twitter: @oldstriker

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