Customer-First Relationships & Privacy

The Evolving Relationship Between Privacy and Business Success

A common perception in the modern business landscape suggests a trade-off between consumer privacy and achieving strong business outcomes. Many believe that prioritizing one inevitably compromises the other.

However, this assumption is fundamentally flawed. Organizations that actively prioritize and defend consumer privacy are, in reality, poised to achieve greater success across all operational areas.

Significant Shifts in the Digital Privacy Landscape

The digital industry is currently experiencing substantial, foundational changes regarding privacy, driven by both evolving governmental regulations and updates to web browser functionalities.

By the close of 2022, all leading web browsers completed the phasing out of third-party cookies. These tracking mechanisms, originating from domains different than the one being visited, are becoming obsolete.

Furthermore, manufacturers of mobile devices are increasingly restricting the identifiers permitted on their devices and within applications. This represents a pivotal moment for the global business ecosystem, fundamentally altering the future of digital advertising.

Impact on Content Consumption

Historically, internet users have largely enjoyed a cost-free online experience. As publishers adapt to a world without cookies, a rise in paywalls and a reduction in freely available content are anticipated.

The development of new, free applications, mobile games, and other content reliant on advertising revenue may also be curtailed unless businesses innovate new methods for user authentication and maintaining a reciprocal exchange of value.

The Value of Authentication

When users directly authenticate with brands and websites, it establishes revenue streams for content creators. Simultaneously, it unlocks opportunities for consumers to receive personalized benefits, such as exclusive discounts and early access to products.

A Shift in Data Philosophy

To effectively safeguard consumer data, companies must restructure their internal systems to emphasize data custodianship rather than operate under a presumption of data ownership. This is a complex, ongoing process, but initiating it now yields substantial advantages.

Building a Privacy-Centric Future

Prioritizing privacy fosters a sustainable digital ecosystem, enabling more effective advertising and ultimately driving improved business results. Consider these four key steps when preparing for a privacy-focused future:

Architect systems around data custodianship.
Embrace evolving regulations and browser updates.
Explore new authentication methods.
Focus on value exchange for personalized advertising.

The Importance of Transparency

As we move towards reimagining the relationship between businesses and their customers, it’s crucial to acknowledge that prioritizing individuals necessitates prioritizing transparency. When consumers have confidence in a brand’s or publisher’s motives, they are more inclined to share personal data and identifying information.

The process of consumers verifying their identity – or willingly providing a phone number, email address, or other identifying detail – in return for access to content or other benefits, enables brands and publishers to establish a more direct connection.

Building Trust Through Transparency

Establishing this level of trust requires two key elements. Firstly, a dedication to fostering positive interactions and employing clear, understandable language to articulate the value being exchanged. Secondly, systems must be in place to allow individuals to express their preferences, both in terms of what they desire and what they wish to avoid.

Consumers generally accept personalized advertising and communications from brands and publishers they favor, provided they receive something of value in return. This could include high-quality content, exclusive discounts, or early access to new products.

Consumer Concerns About Data Privacy

It’s evident that individuals desire control over how their data is gathered and utilized. Research indicates that 91% of people express concern regarding the extent of data collection by companies. Furthermore, 72% have ceased using a product or service due to these privacy concerns.

These significant figures underscore the fact that future innovation will be driven by those who recognize privacy as the cornerstone of the future we aspire to create.

Any digital strategy centered on utilizing consumer authentication for advertising purposes must be fundamentally built on a foundation of trust and a privacy-first approach, consistently respecting user choices.

Industry Initiatives for Enhanced Privacy

The digital advertising sector is actively exploring methods to rebuild and enhance privacy standards. For instance, Microsoft’s PARAKEET facilitates the connection between publisher data and marketer demand, maintaining operations within the existing adtech framework while prioritizing consumer transparency and control.

Similarly, Google’s FLoC utilizes browser technology to anonymize personal data, enabling consumers to easily authenticate themselves and manage their advertising preferences through opt-in and opt-out options.

While these approaches differ in their implementation, the overarching goal is to improve user privacy while simultaneously sustaining publisher revenue to support a thriving, open internet. Increased familiarity with and feedback on these proposals will contribute to a more robust and effective system.

Safeguarding Consumer Identity: A Prudent Approach

Prior to establishing advertising partnerships, a thorough understanding of their practices is crucial. Publishers, who form the foundation of the open web, may perceive the phasing out of cookies as a limitation to reach. This concern can prompt consideration of strategies promising extensive scale, yet failing to meet privacy standards.

Specifically, digital brands should refrain from acquiring customer insights through techniques like fingerprinting, which bypasses the necessity for user consent and verification. This practice poses significant risks to both publishers and the brands they collaborate with.

Fingerprinting functions by aggregating data points from a user’s device configuration – including screen resolution, operating system, and device model – to generate a unique identifier, effectively substituting a cookie. The unauthorized collection of consumer data through this method exposes stakeholders to substantial vulnerabilities.

Indeed, all leading web browsers in the United States actively discourage this practice. Its ethical implications are considerable, to put it mildly.

The Risks for Emerging Businesses

This caution is particularly relevant for new publisher and brand ventures. These organizations frequently operate with constrained resources for customer relationship management (CRM) and must prioritize establishing trust and recognition within their respective fields.

Constructing a strategy reliant on fingerprinting is akin to erecting a business upon an unstable foundation. Such an approach lacks the robustness needed for long-term success and sustainability.

Consider the implications carefully before adopting any data collection method. Prioritizing ethical and transparent practices is paramount.

Exploring Authentication Strategies

A widespread understanding exists among leaders that data is a crucial asset. However, the processes of data collection, management, and utilization can present significant challenges in the current landscape. Fortunately, valuable lessons can be drawn from publishers.

These publishers, operating at the forefront of advertising changes, have successfully implemented methods to authenticate a greater number of users, a necessity for their continued operation.

The ability of publishers to achieve sustainable monetization is not merely a matter of financial health; it is fundamentally linked to the preservation of free speech and access to reliable information. Changes impacting cookie usage pose a substantial threat to the publishing industry’s capacity to offer free content supported by advertising revenue.

To prevent a scenario where a handful of technology companies control information dissemination, independent publishers are actively pursuing innovative approaches to establish trustworthy relationships with their audiences.

When publishers prioritize the exchange of value with consumers, it results in increased trust and a greater willingness among users to share contact information, such as email addresses or mobile phone numbers. These users demonstrate a stronger connection to the brand.

Furthermore, they typically spend more time on the website, actively engaging with the content. This heightened engagement translates into increased value, as longer session durations create more opportunities for advertising.

Initial findings from collaborations between Microsoft Advertising and LiveRamp, enabling brands to purchase authenticated inventory, demonstrate a significant increase in Microsoft Advertising CPMs – exceeding 40%.

For both businesses and publishers, authenticated users – essentially brand advocates – are vital for achieving improved business results. The primary advantage of cultivating trusted consumer relationships lies in the ability to deliver personalized experiences and foster lasting connections.

In fact, a substantial 85% of consumers prioritize brands they trust. A commitment to privacy and transparency is the only viable path toward building brand loyalty and enduring affection.

Authenticated solutions should empower businesses to connect their data without actually sharing it. Every brand must retain complete control over data access and transactional capabilities.

There have been numerous instances of platforms leveraging data obtained without explicit permission, ultimately failing to respect consumer privacy. Several methods can be employed to generate authenticated data, including:

Offering early access to information regarding funding rounds or business news in exchange for a consumer’s email address.
Providing a discount to customers who opt-in to receive text alerts.
Implementing a “freewall” that requires readers to create a membership to access exclusive content.

For those seeking to monetize data assets and connect with consumers, time is of the essence. Organizations that proactively integrate authentication capabilities now and dedicate the coming months to building first-party relationships will cultivate trust and realize increased return on investment.

Currently, approximately 40% of the global internet population already operates in a cookieless environment, and tangible benefits are achievable today.

The Limitations of Relying on Major Technology Platforms for Customer Engagement

The proliferation of fragmented data and the intricacies of its application have prompted numerous advertisers to pursue readily implemented, addressable solutions that yield substantial outcomes. Consequently, a significant 65% of advertising expenditure in 2020 was directed towards walled gardens, such as Facebook.

These platforms have consistently possessed robust addressability capabilities, stemming from their foundation in direct consumer data sharing. For brands prioritizing a significant consumer journey and maximizing advertising return on investment, utilizing walled gardens can appear to be an efficient route.

Building Sustainable Relationships Beyond Walled Gardens

While companies can gain valuable insights from the strategies employed by walled gardens regarding consumer relationship building and inventory monetization, it’s crucial to acknowledge the inherent lack of transparency. Although authenticated, businesses utilizing these platforms often lack access to the foundational data and comprehensive campaign performance metrics needed for iterative improvement and achieving broader business objectives.

To effectively compete and establish a robust data infrastructure, a focus on cultivating direct relationships with consumers is paramount. Advertising with publishers who also prioritize these direct connections, while simultaneously enabling transparent media purchasing, is a key strategy.

The Benefits of a Consent-Based Ecosystem

A digital ecosystem founded on authentication and explicit consent not only upholds consumer privacy but also streamlines the processes of media planning, buying, and measurement. This simplification allows companies to concentrate on strengthening meaningful connections throughout the entire digital supply chain.

It's important to remember that audiences are dispersed across the internet, not confined solely within walled gardens.

Privacy as a Catalyst for Positive Business Results

A clear understanding of the benefits of privacy can lead to improved business performance. Recognizing the long-term commercial implications of fostering a sustainable, healthy, and competitive web that benefits all stakeholders is essential.

Prioritizing consumer trust and transparency is not only ethically sound but also demonstrably beneficial to profitability. The positive impact on the consumer experience, and the resulting business gains, are undeniable.

This fundamental shift towards a more trustworthy ecosystem represents a forward-thinking, rather than incremental, approach.