Jan 16th 2020

CCPA and the Continued 'Privacy Paradox'

Today, brands are caught between using data to provide better customer experiences and violating privacy, creating the ultimate "privacy paradox," as Mary Meeker once called it. Traditionally, many tech companies that support brands have approached user data privacy policies by adhering to industry standard controls and policies, but they've left the implementation of privacy protections up to their customers. Too many tech companies that work with brands have had a hands-off approach to how data is collected and shared in order to mine valuable insights — and it's time for that to change.

Shifting the mindset

We're at a tipping point between government regulation and technology data protection structures and standards. The U.S. Congress has demonstrated a poor understanding of how the internet works, especially when it comes to complex topics such as advertising, platforms, mobile, data and personalization. It provides little confidence that appropriate regulation can or should come from Washington. The European Union's General Data Privacy Regulation (GDPR), and now the California Consumer Privacy Act (CCPA) are laudable efforts to address the problem, but are they really enough to force a systemic change? I'm not convinced.

I believe the entire data privacy ecosystem needs to be rethought. It's time for the tech industry to roll up its sleeves and truly weigh the costs to support data privacy against the economic losses the entire industry experiences when its turns a blind eye. Doing so requires companies to reassess their systems, principles, processes and even their people.

Shape up or ship out

There is a whole class of tech companies that interact with consumer data, but don't have a direct relationship with consumers. For too long, some companies in this position have had a "don't ask, don't tell" policy when it comes to data collections. The reason this strategy must shift comes back to the importance of consumer trust.

Our whole digital life as a society is based on trust, particularly when it comes to mobile. We rely on our mobile devices for everything from navigation and communication to dating, hailing taxis, booking flights, telemedicine and more. Mobile is shifting from "occupying our time" to really a "remote control" that makes our lives easier. Brands must take extra steps to ensure consumers are protected when it comes to their precious personal data. GDPR and CCPA have started this process, but there's still work to be done and we absolutely need personalization for this next big shift.

Our data found that the click-through conversion rate for personalized content is 68% higher than the average. To create the personalized experiences from which we benefit, tech companies that support us need data. Consumers have knowingly (or unknowingly in some cases) provided that data trusting it will not be misused, shared or sold to third parties. Large-scale data privacy issues over the past few years, from Cambridge Analytica to Equifax, have threatened this consumer trust.

Personalization is essential, but can be detrimental to consumer trust if data is leveraged incorrectly. Effective personalization is as much about what messages you don't send as it is about what you do send, pointing to how companies must strike a balance between privacy and convenience. Without consumer trust, the promise of personalization — unique content that is delivered with pinpoint accuracy and relevance — crumbles.

Looking ahead

As a CEO in the mar-tech industry, I speak for many leaders when I say that it's on us to regain consumer trust. If we don't find a way to solve the problem together amid today's environment of widespread mistrust, we may forever jeopardize the promise of the coveted personalized digital and mobile experience.

As marketers in the technology space, we must ask ourselves: "What would I do if this were my son's or daughter's information? How would I ensure its protection?" We must have tougher conversations, challenge ourselves more and make real investments to support data privacy. Any company that touches user data must play an active — if not, proactive — role to safeguard both their customers' data and their end-users' privacy rights. Truth be told, it's high time we take the reins and provide some guidance by conducting privacy audits and cross-checks and flagging issues before they explode into full-blown crises that damage a brand and consumer trust.

Jude McClogan

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