The recent Facebook/Cambridge Analytica story made headlines around the world about the ethics of data protection. While the EU has been proactive in this (i.e with GDPR adoption), other regions haven’t been as enthusiastic. This latest scandal, however, has turned the tide.
The upshot? Now that consumers care, they will alter their expectations around how you capture and use their data. Data governance and usage policy will change. But it also means marketers who ethically invest in understanding and better serving customers through data will have a substantial competitive advantage. This means more time spent planning what, how and why we use data rather than firing from the hip with any data source.
What happened – a quick recap
Facebook is keen to show it is addressing the situation to maintain advertiser confidence and revenue streams. It’s employing various initiatives to ensure advertisers have comfort in how data is used.
One initiative is removing third-party targeting from the platform. According to Facebook: "There isn't as much oversight regarding that type of information... We've decided to take a more conservative approach." In six months’ time, targeting customers through Facebook based on information from third-party organisations such as Experian and Acxiom won’t be an option.
While not directly addressing the GSR breach, this demonstrates that Facebook doesn’t want to unwittingly enable misuse of inappropriately obtained data. When the second biggest media owner in the world makes changes like this, you know other media platforms will follow.
There are also suggestions that new Facebook technology will "demand marketers guarantee email addresses used for ad targeting were rightfully attained", suggesting Facebook recognises a responsibility extending to your first-party data.
What are the implications for marketers?
The consumer outcry and response from Facebook suggests your organisation needs to change how data is collected, used and enriched.
Collecting and using customer data
1. You’ll need to focus more on collecting first-party data. Buying third-party audiences directly on platforms will shrink. You’ll need to rely on matching first-party data to advertiser platforms (e.g. Facebook Custom Audiences). This means more investment and innovation in relationship marketing campaigns to acquire customer information directly.
2. You’ll need to be transparent about how you use data. Over 25% of consumers are ‘deeply concerned about online privacy’. It’s higher for Baby Boomers (29%), although Gen Z and Millennials aren’t far behind (24% and 25%, respectively, according to GWI). You’ll need to be explicit around how you’ll use customer data and clearly articulate the value you’ll provide in return for consent.
3. Matching data internally should be a priority. Siloed first-party data will be ineffective. You’ll need the right data architecture to collect, match and enrich across various sources to deliver marketing ROI. Furthermore, you’ll need the right martech to use matched data (e.g. DMPs) and the associated skillsets to be able to leverage these technologies to reach people and mine learnings on who was reached, converted and why.
4. AI will be your friend for predicting customer needs. Buying audiences with propensities to buy will be limited. You’ll need to start experimenting with advanced analytics like AI to model your own data and identify buying signals and triggers. By enriching first-party data with third-party propensity scores, you can use AI and predictive models to anticipate customer needs at scale.
Enriching customer data
5. You’ll need to switch from media buying to enriching first-party data. The money previously spent buying ‘high income earners’ via third-parties on Facebook will reduce. Instead, budget will be dedicated to enriching existing data sets. This means bigger ‘bulk data’ deals, greater procurement scrutiny and longer sales cycles, restricting your ability to respond to consumer trends. Be ready.
6. Data suppliers and associated costs will change. More enterprises will monetise their data, increasing the number of information sources and lowering the cost of data enrichment. However, companies that can guarantee quality data at speed will charge a premium.
The nature of your relationship with people will change – because ethically and legally it should. But the reason for change is more than just meeting these expectations. With greater clarity around how data can help nurture customer relationships, you’ll be better placed to have more meaningful, ongoing conversations. The knowledge you have about customers will help you proactively identify and fulfil their needs. And rather than feeling violated, your customers will appreciate your respect.
Michael Daley is a senior strategist at Digitas Sydney