What data brands collect today and how
Enormous data growth is raising big questions when it comes to the ethics of data-driven marketing. With customers sharing more and more of their data, and that data growing more and more personal— details about location, fitness, and recently even DNA—the onus is on brands to make sure data is collected, combined and used in ways that delight customers without compromising expectations of privacy.
Acting transparently is a big part of this, saying to your customers ‘this is where the information came from, this is how we will use it, and this is how it will benefit you’. But with data arriving from more sources, in more ways than ever before, keeping up is often easier said than done.
Where data comes from
In traditional direct marketing, brands predominately learn about their customers through the active collection of personally identifiable information. You ask your customers for their contact details, collect phone numbers, addresses, or ask them to fill out a survey to reveal other helpful data.
Using some classic analytical techniques—simple derivation, statistical models, population segmentation, and propensity scores—this information can help marketers put together a picture not just of a consumer, but also of wider demographics, helping marketers deliver better experiences to their existing customers, and identify potential new customers to expand their business.
Such techniques still play a huge role in modern marketing. In fact, recent analysis of nearly one million promotional forms used on social media showed that active collection is still widely used to collect email addresses and names. Even so, it’s rapidly being eclipsed by other, more passive methods.
As Sheila Colclasure points out in our New Codes of Conduct video series, we’re moving into an era in which many types of new data come with different permissions with much of that data collection promised under anonymity.
From active to observational
Most of this ‘new data’ is collected online. And most online information isn’t gathered through traditional active participation. Instead, it takes the form of anonymous cookie IDs, mobile IDs, and interest-based advertising data that’s generated every time we visit a website, open an app or click on a specific product. This observational data can help us paint a more vivid and detailed picture of the people we sell to on an anonymous basis, and further analysis can provide marketing insights into age, shopping habits, income and more.
The problem is, with all this new data collected observationally, helping customers to understand what information they’re sharing and how it will be used is more difficult. Sure, as consumers we all know to some extent that we’re handing over details when we use particular services, but if we’re honest, how many of us really know the specifics of what we’re agreeing to when we click the ‘accept cookies’ button?
I ask because understanding is the key here. If you, as a customer, are aware of what information is collected, and understand how it’ll be used, you’re more likely to value when it leads to you receiving a targeted offer for something you really need or want. Conversely, how would you feel if a targeted advertisement for a product appears because of information you didn’t know you shared? The result begins to feel invasive.
Why it matters
Marketers need to ensure customers feel comfortable about the data they share, and that it’s used to benefit them in ways they expect—namely, creating the deep, personalized experiences that wouldn’t be possible without their input.
Achieve this transparency, and you’ll find it easier to persuade customers to part with their data. In a recent survey by Software Advice, 46% of respondents said they would be ‘less bothered’ or ‘a lot less bothered’ about data privacy if companies told them exactly what data they were collecting and why.
The moral? Let customers know how you work. It’s the not knowing—and unwelcome surprises—that stand to really hurt your brand.
Want to know more about the ethical use of data? Watch our videos to hear more from Sheila Colclasure, and read The New Codes of Conduct: Guiding Principles for the Ethical Use of Data for a more in-depth look at the subject.