Personalization vs Privacy

Personalization + Privacy: Overcoming marketing’s big paradox 

Marketers everywhere have been caught with their hands in the cookie jar: After 20 years of using cookies to learn more about audiences, companies like Google and Apple have begun closing the lid on visitor data–leaving marketers hungry for a way to target their campaigns and experiences. Third-party data is becoming harder to access, so what does that mean for the future of personalization?  

The privacy-personalization dilemma 

The good news is that marketers and consumers both want personalization. Recent data from McKinsey shows that 71% of consumers actually expect it, and companies who know how to deliver drive 40% more revenue. 

Your potential customers enjoy tailored experiences that make shopping feel easy and relational. They want product recommendations that take their preferences into account. They want you to follow up when they purchase or hit a milestone. When you do, consumers feel like your brand knows them personally–even if their interactions have been digital. 

By personalizing your customer experiences and marketing, you’re doing the heavy lifting for them. You make their visit hyper-relevant and easy to shop. In turn, customers reward you with their purchases and continued loyalty. 78% of customers are more likely to repurchase and recommend a brand that personalized their experience.  

But there’s a darker side to personalization that has consumers worried. In 2023 alone, there were 2,365 cyberattacks–a 72% increase from two years before–impacting 343,338,964 victims. As more data becomes available on the internet, consumers are more vulnerable than ever. They’re more likely to restrict access to cookies or avoid sharing information if they aren’t confident that companies have the right security practices in place.  

So how can your company meet your customer’s expectations when the data you need when the lid is closed on the cookie jar? It all comes down to building a more transparent relationship with your customers.  

Earning data consent 

One in three marketers believes that diminishing cookie data has had a negative impact on their ability to track and target their efforts. That said, 49% report their marketing strategy still depends on cookies. If that describes your company, too, it’s time to give your customers a better understanding of how their data is being used.  

From a consumer perspective, cookies are an almost invisible way to be tracked across their digital path. While cookie permissions are more common on websites, they’re not always clear. Only 46% of US adults know what internet cookies are, and many have misguided beliefs about how they work. That means options aren’t enough–you need to educate your visitors about how cookies are used and why it benefits them.  

Even if the cookie jar remains open for now, there’s no guarantee it will remain a viable option for the future. Marketing teams need to explore other forms of data collection to ensure their approach is future-proof. Instead of relying on third-party data, we recommend that companies focus on earning more data directly from their customers, also known as zero-party data. 

While major tech providers have become more strict about privacy and security, zero-party data can bring personalization out of the shadows and into the light. Instead of tracking people without their knowledge, zero-party data requires you to earn information from your customer. You probably won’t get it all at once, but you will likely get better quality data while building trust with your most valuable audiences.  

Unlike indirect data that’s collected without a person’s explicit awareness (either because it was bought from a third-party, aggregated, or tracked across your digital footprint), zero-party data is collected with their full awareness and consent. You probably already collect email addresses, phone numbers, and purchase history. But your library of zero-party data can supercharge personalization opportunities if you go a little deeper.  

Building relationships through zero-party data 

Collecting customer data can be tricky. You want enough to create meaningful experiences, but you don’t want to overwhelm your audience. So how can you make zero-party data a relationship-building tool?  

• Respect the journey. Trust is earned over time, so don’t demand all their information immediately. Get what you need for registration or purchase, then introduce more opportunities to share over time. Your relationship with visitors will get better with time and strengthen their affinity for the brand.  

• Give context. Why are you asking for your audience’s shopping habits and preferences? If you can help people understand the impact of sharing information, they’re more likely to agree to it. Otherwise, repeated requests for data can feel like an intrusion or too much work. 

• Make it fun. There’s no rule saying that data collection has to be boring! Reward your customers for sharing with you by creating memorable quizzes, interactive tools, and engaging design. They’ll be more likely to participate when the process feels like play.
  

Want to build trust and encourage conversions through your marketing? Let DCG ONE help you brainstorm a long-term path to personalization.