News & Views

Opinion / Privacy by Design

by Kristina Dimitrova

‘Your privacy has been deleted’; ‘Social media owns your relationships’; ‘Our democracy has been hacked’; Remember when these cool-sounding taglines were used to promote the cyber drama Mr Robot? It gets slightly more worrying when the apparently over the top security breaches in the show (the Ashley Madison hack, someone remotely hacking a Jeep) started happening in real life. Even its creators think it’s weird. As scandals around data privacy increasingly make headlines in mainstream media, we are becoming more and more aware that the information we choose to share in exchange for products and services comes at a price. Here’s why it matters for marketers.

Quality over quantity

Consumer data underpins nearly every aspect of marketing activity today – from user targeting and product recommendations, through to campaign distribution. But the current approach of buying mass data sets from third party companies is usually inefficient and does not always provide information about the most relevant people. ‘Most modelled ad targeting is bullsh*t. Sellers stack assumption upon assumption and users are repackaged into fanciful segments that waste planners time, clients money and the attention of users,’ says Martin Bailie, co-founder of personalised marketing platform Tailored. ‘Someone looking at a car review isnt in-market by default. Those that have looked at lots of reviews may be in-market. But they may also be someone checking a car theyve bought, or someone liking the design, or a car fan dreaming of retirement etc. We can model associations between the entities  e.g. we can layer more signals on top these signals to get us closer, but the relevance to the first data of the added data is assumed too. Thats what most associative models are: assumption pyramids.’

These inefficiencies don’t just waste marketing budgets, they also result in consumers who are sick of seeing ads for irrelevant products. For far too long marketers have abused people’s consent and their privacy by bombarding them with messages they simply don’t care about. Of course people are installing ad blockers rather than see your banner ad one more time.

 

Instead of buying mass data sets in the hope of reaching as many people as possible, marketers should look to smaller consumer groups that are the most likely to convert. Tailored, for example, is trying to enable that by capturing the real needs of real in-market prospects. The website asks people what they need and how theyll use their new item, then searches the web for the most relevant products and presents them to users. Bailie says it takes consumers 1.5 hours to find the best juicer for wheatgrass juicing on the web, while Tailored does it in 1.5 minutes.

Data as a currency

As consumers become increasingly aware of how they’re being tracked and targeted, they realise that privacy has a price. There is no shortage of scandals about the way companies use customer data without their knowledge. People were shocked and outraged when they found out that Unroll.me, a free service to unsubscribe from email lists, has been selling their information to advertisers, for example. Similarly, transportation company Uber was under fire for tracking users’ locations even after they had deleted the app.

Soon though, the implications of this will be much bigger than a few thousand angry tweets. With the General Data Protection Regulation (GDPR) coming into play in the EU in May 2018, companies will be forced to be much more upfront about how they use the information they store about their users. What’s more, failing to do so can result in fines as high as 4% of global group revenue, or €20m, whichever figure is higher.

According to a survey by business intelligence company SAS nearly half (48 per cent) of UK adults plan to activate the new rights over their personal data, including accessing data from social media companies, asking businesses to stop using their data for marketing purposes and removing their personal information from certain systems. Yet, 80% of 18 to 24 year olds are happy with companies using their data for marketing purposes, in the hope of a more personalised services and better deals.

So how do you target someone who technically doesn’t exist on the web? You earn their attention. A startup we profile in the next issue of Contagious magazine is trying to tackle this by giving people ownership of their data. People.io is putting consumers in control by rewarding them for licensing their information and attention to brands.

Once users download the people.io app, they start answering Yes or No questions about their interests, activities and habits and earn credits, which they can then redeem for gift cards or donate to charity. The statements and questions people respond to can be as broad as ‘I prefer summer to winter’ or as specific as ‘I plan to go on holiday next month’.

Because of this, the startup can gather time-sensitive and in-depth information about its users. This enables the company to pair brand partners with the most relevant potential consumers. For example, if on Valentine’s Day, a user answers a question ‘I have a girlfriend’ with a ‘Yes’ and ‘I have bought my girlfriend flowers for Valentine’s Day’ with a ‘No’, then people.io can match the person with a message from a florist in the area.

Users, rather than people.io, own all the data they choose to share with the app – whether that’s answering questions or connecting it to external services. If they decide to delete their accounts, their data is permanently deleted too.

By giving users ownership of their data, people.io acts as an intermediary between consumers and brands. ‘We believe that the type of insights you can create when a company owns and controls a person’s data is far less valuable than when a person owns and controls it,’ Nicholas Oliver, founder and CEO of people.io, told Contagious. ‘The long-term vision is for people.io to become the Visa of data, where we act as a regulating, governing platform ensuring that the user has a trusted interface where they can benefit from the use, the access and the value of their data without losing control of that privacy.’

While for startups like Tailored and People.io, privacy by design is currently a USP, all developments in the area show that soon, addressing issues around the use of personal data will become a consumer expectation and a necessity for brands and marketers. The smartest companies who stop abusing and start respecting customers’ data have the opportunity to form a new type of relationship with them – one built on trust and understanding of their individual preferences.