What Is The Future Of Data Privacy?

Here are three things mar­keters need to know about the future of data pri­va­cy.

Maciej Zawadziński By Maciej Zawadziński from Clearcode. Join the discussion » 1 comment

In the brave new dig­i­tal world, where data fuels growth for all kinds of busi­ness­es, data pri­va­cy has become the ele­phant in the room. Nobody can ignore the impor­tance of data pri­va­cy, and some com­pa­nies like Apple and What­sApp, have tak­en steps to make it a key fea­ture of their prod­ucts with end-to-end encryp­tion. But many still only pay lip ser­vice to address­ing the larg­er issues involved.

The seis­mic shift to enter­prise cloud-based solu­tions owes a large amount of its momen­tum to the agili­ty and flex­i­bil­i­ty of the “as-a-ser­vice” mod­el. With easy access to CRM data on Sales­force, mar­ket­ing data on Hub­Spot, and web ana­lyt­ics on plat­forms like Piwik — there isn’t much to hate about the many options out there.

The prob­lem iron­i­cal­ly for many com­pa­nies is hav­ing too many ready-to-use appli­ca­tions at their dis­pos­al. Data, some of it dupli­cate, is scat­tered across mul­ti­ple sys­tems and depart­ments and is dif­fi­cult to track.

The result is data pri­va­cy often takes a back seat to effi­cien­cy, speed, and rev­enue poten­tial. This is espe­cial­ly true in dig­i­tal adver­tis­ing and mar­ket­ing, two areas where lever­ag­ing data has become a top pri­or­i­ty and pri­va­cy con­cerns are often lost in the shuf­fle.

Case in point: a mere 2 per­cent of 500+ IT pro­fes­sion­als who took part in a sur­vey com­mis­sioned by Blanc­co Tech­nol­o­gy Group indi­cat­ed mar­keters care most about data pri­va­cy. Man­age­ment and IT depart­ments fared bet­ter (though not over­whelm­ing­ly), but that may change in the near future. Here are three things dri­ving the future of data pri­va­cy that mar­keters need to be aware of.

1. Data-Privacy Regulation & Compliance

A wave of new and explic­it reg­u­la­tions will force com­pa­nies to take data pri­va­cy more seri­ous­ly.

Com­pa­nies are faced with the threat of fines and more­over, a grow­ing aware­ness and con­cern that if they don’t prop­er­ly address per­son­al pri­va­cy, they’ll lose the most valu­able asset ever – con­sumer trust.

The spec­tac­u­lar fall and immi­nent bank­rupt­cy of British dig­i­tal-adver­tis­ing phe­nom­e­non Phorm, whose prac­tices caused gen­er­al out­cry, is just one exam­ple of what can hap­pen with a lack of reg­u­la­tion and restraint.

Last Decem­ber saw a major over­haul in data-pri­va­cy leg­is­la­tion in the Euro­pean Union. The new Gen­er­al Data-Pro­tec­tion Reg­u­la­tion (GDPR) includes pro­vi­sions for:

  • Eras­ing all per­son­al data at a user’s request, oth­er­wise known as the “right to be for­got­ten.”
  • Noti­fy­ing author­i­ties of secu­ri­ty breach­es with­in 72 hours.
  • Requir­ing a “gen­uine and free” con­sent from users for data col­lec­tion and hard proof of this con­sent for future com­pli­ance audits.
  • Fines of €20 mil­lion or 4 per­cent of glob­al rev­enue, whichev­er is high­er.

The new rules make excep­tions for small- and medi­um-sized busi­ness­es, includ­ing a waiv­er on appoint­ing a data-pro­tec­tion offi­cer and reduced respon­si­bil­i­ty for noti­fi­ca­tions. They do, how­ev­er, apply not only to all mem­ber states, but also to for­eign com­pa­nies oper­at­ing with­in the Euro­pean Union. This means their range and impact will be tru­ly wide­spread.

2. Data Leakage: Regulation Out Of Self-Interest

Con­trol­ling data is not only impor­tant to gov­ern­ment bod­ies and indi­vid­ual users; com­pa­nies have a vest­ed self-inter­est in data pri­va­cy, and this may turn out to be an impe­tus for change.

The com­plex dig­i­tal-adver­tis­ing ecosys­tem runs on mas­sive amounts of data, much of it col­lect­ed with the help of track­ing pix­els (or tags) embed­ded in web pages and appli­ca­tions users inter­act with.

As brands seek to lever­age that data to opti­mize their adver­tis­ing and mar­ket­ing cam­paigns, there’s con­cern some of it may “leak out.” This can occur when third par­ties, sur­rep­ti­tious­ly fire tags on ad net­works or pub­lish­er web­sites, allow­ing them to rake in user infor­ma­tion to their data man­age­ment plat­form (DMP) and lat­er take advan­tage of that data for oth­er pur­pos­es.

In response to this seri­ous prob­lem, some pub­lish­ers and ad net­works, most notably Google, have for­bid­den DMPs from fir­ing tags on pub­lish­er sites that use its Dis­play Net­work, the excep­tion to this being if the DMP is con­nect­ed to the demand-side plat­form (DSP) mak­ing the trans­ac­tion.

The oth­er solu­tion for pub­lish­ers is to avoid sell­ing inven­to­ry on open ad exchanges where they have lim­it­ed con­trol over to whom it is sold. Instead, they should work through pri­vate mar­ket­places or sell direct­ly to brands they trust.

What does this mean for data pri­va­cy?

With com­pa­nies every­where becom­ing more depen­dent on data in order to gain even the slight­est edge, they’re more like­ly than ever to take pro­tec­tive mea­sures, putting them in a bet­ter posi­tion to guar­an­tee pri­va­cy for users.

3. The Data Consolidation Imperative

There’s anoth­er rea­son why the data-pri­va­cy sit­u­a­tion will like­ly improve.

As the Blanc­co sur­vey shows, data gen­er­at­ed across dif­fer­ent depart­ments of a com­pa­ny very often becomes “siloed.” Some­times it’s even dupli­cat­ed. Adver­tis­ers don’t like this because it means that often a por­tion of their tar­get­ed ad cam­paigns are unin­ten­tion­al­ly shown to the same audi­ence. Data dupli­ca­tion is also why some com­pa­nies have a hard time com­ply­ing with “right-to-be-for­got­ten” leg­is­la­tion.

How­ev­er, mar­keters (those to whom data pri­va­cy didn’t seem impor­tant) are rec­og­niz­ing what a bar­ri­er these silos present to their efforts to effec­tive­ly tar­get cus­tomers in a per­son­al­ized way.

As a result, there’s a greater imper­a­tive for merg­ing data, inte­grat­ing sys­tems includ­ing CRM, mar­ket­ing automa­tion, ecom­merce, and greater trans­paren­cy com­pa­ny-wide. While the main goal of this move may be to improve ROI, its side effect will make data-pri­va­cy com­pli­ance eas­i­er.

Technical Considerations & Implications

Mov­ing toward more effec­tive data con­trol implies cer­tain adjust­ments in process­es as well as changes in the tech­nol­o­gy itself.

With the need for track­ing data across var­i­ous stages, from gath­er­ing to stor­age to actu­al usage, it becomes essen­tial for com­pa­nies to set up their sys­tems with this data life­cy­cle in mind. This includes iden­ti­fy­ing what data may be shared with third par­ties and when, as well as what mea­sures need to be tak­en in order to account for its usage and even­tu­al dele­tion.

One solu­tion that com­pa­nies are con­sid­er­ing is build­ing a pri­vate or hybrid cloud sys­tem to host their appli­ca­tions. In the past, this approach seemed to have too many dis­ad­van­tages; how­ev­er, new inno­va­tions like Dock­er for host­ing apps and push­ing updates have made it more fea­si­ble.

As men­tioned above, the desire for more effi­cient exploita­tion is lead­ing com­pa­nies to merge data sets and make them more acces­si­ble using data man­age­ment sys­tems. This should help in the process of cre­at­ing life­cy­cle roadmaps. It will, how­ev­er, require care­ful plan­ning in the area of per­mis­sions (i.e., who has access to what) and alerts to iden­ti­fy pos­si­ble data breach­es so they can be report­ed and fixed quick­ly.

All things con­sid­ered, the issue of online data pri­va­cy is not like­ly to fade any time soon. As a result, com­pa­nies (and specif­i­cal­ly dig­i­tal adver­tis­ers and mar­keters) need to take a hard look at their poli­cies and prac­tices and make pro­vi­sions for future changes, keep­ing in mind their new solu­tions should be devel­oped with secu­ri­ty as a top pri­or­i­ty.

Maciej Zawadziński

Written by Maciej Zawadziński

CEO & Cofounder, Clearcode

Maciej is Clearcode's co-founder. He is a skilled technical leader and savvy entrepreneur. Since 2003, he has held the position of CEO of four successful startups.

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