Increased Consumer Expectations For Privacy Could Be A Good Thing For Advertisers

In advertising, the rise of programmatic buying brought reduced waste and efficiency through automation and better targeting of ads. In the early days, that targeting was primarily fueled by third-party data acquired from outside sources on everything from demographics to shopping behavior. Most advertisers still rely on third-party data because it is easy and cheap – but not necessarily because it always works. Most Americans in a Deloitte survey [PDF] reported that third-party data about them was wrong at least half the time across several categories, including income, demographics, vehicle owned, interests and purchase behavior.

In a privacy-conscious society, advertisers can no longer take for granted where data comes from. Clean and transparent data sources – where consumers either explicitly opt in or better understand the trade-offs, such as when someone signs up for a hotel’s loyalty program and then sees personalized offers – take on increased importance. First-party data will become the new ad targeting fuel. Instead of relying on AI-driven lookalike segments, brands can rely more on data from their own loyal customers giving information in exchange for something they value – all managed in environments they directly control.

Why aren’t brands already effectively doing this at scale already? Some are, but implementation is hard, which is why brands relied on third-party data in the first place. To really make first-party data work, you need technology infrastructure and buy-in across an entire brand organization – including CIOs, CDOs and CTOs to practitioners in product, UI, content development and beyond. GDPR-style legislation could force marketers’ hands to get this right.

First-party data is only great if you have it. For the brands without direct customer relationships, second-party data gained from brands that do is key.

Of course, a shift toward privacy means it’s inevitable that there will be less data overall for marketers to use in marketing and advertising. But that doesn’t have to be a bad thing, as marketers return to neglected fundamentals like contextual targeting and creative excellence.

In terms of context – or where ads run – a flight to quality is long overdue. Any advertiser reading recent headlines on ads running before offensive content knows that user-generated content run amok can undermine brand trust in an instant. Given recent breakthroughs in major broadcasters and OTT providers embracing private marketplaces, advertisers don’t necessarily need to lose scale or targeting with a flight to quality.

Digital ad creative is also due for a renaissance. Ad blocking arose because people hated ads – and went out of their way to get rid of them. Less data available for targeting makes creative all the more important to break through the noise, and it’s likely needed in an industry that has overengineered for direct response metrics such as clicks or site visits.

Ultimately, brands are in the business of delighting their customers and delivering great experiences, not creeping them out or monetizing their data. Privacy can be a positive part of that experience. Think of an airline explaining through a just-in-time notice in its app why access to GPS data is needed to help users find their cars upon returning from a trip.

Respecting privacy builds trust with customers – and that’s good for everyone.

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This post was syndicated from Ad Exchanger.