What’s the Big Deal with Consumer Data Privacy?

What should companies be doing, both in the near term and the long term, to set themselves up for success in an increasingly data privacy-focused world? We’ve got recommendations to help you make the right moves now to protect data integrity and continuity in the face of forced migration away from Universal Analytics and to evolve your data privacy strategy for the long run.
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Data has become the fuel that fires successful business strategy. From achieving a 360-degree view of your customer to drive a stronger customer experience to moving beyond measuring marketing program performance to predicting consumer behavior in response to marketing stimuli, a strong data strategy makes it possible. As powerful as the relationship between organizations and their data can be, this has become secondary to the relationship between consumers and their personal data.

 

In the last few years, concerns about consumer data privacy have dominated conversations about how data is collected and used by businesses. With Europe leading the United States in terms of the stringency of consumer data privacy legislation around the collection and use of consumer data, US-based companies, marketers, advertising partners, and data brokers have been watching from a relative distance as those serving global audiences have grappled with the impact of European data privacy laws and, in some cases, suffered from fines and even bans for missing the mark. 

 

For those serving the US market, Google’s 2020 announcement that they would phase out support for third party cookies signaled that broad reaching changes to consumer data privacy were coming stateside. Two years later, marketers and publishers have found ways to navigate a world where consumers have significantly more control over their data. With Google announcing that they will no longer collect data in Universal Analytics properties starting July 1, 2023—a move that will provide a more holistic view of the consumer journey while also adapting to new consumer data privacy legislation—many companies are scrambling to plan for that change to avoid potential data loss. With Google Analytics serving as the primary web analytics platform for an estimated 86% of websites, the impact is far-reaching.

 

So what should companies be doing, both in the near term and the long term, to set themselves up for success in an increasingly data privacy-focused world? We’ve got recommendations to help you make the right moves now to protect data integrity and continuity in the face of forced migration away from Universal Analytics and to evolve your data privacy strategy for the long run. But long-term success requires a big picture view of where the world is headed when it comes to consumer data privacy. That begins with understanding how we got here in the first place.

The Evolution of Consumer Data Privacy Legislation

In 1950, the European Convention on Human Rights put a legislative stake in the ground on privacy, stating that “Everyone has the right to respect for his private and family life, his home and his correspondence.” With the invention of the Internet and the proliferation of global technologies that completely changed what “correspondence” could look like, the European Union had to adapt and they implemented the European Data Protection Directive in 1995, which set minimum standards for consumer data privacy and security.

 

In 2012, the European Commission introduced the General Data Protection Regulation (GDPR) with the primary aim of giving individuals control over their personal data and to simplify regulations within the EU. The GDPR became enforceable in 2018 and established a model for many national data privacy laws in countries such as Chile, Japan, Brazil, South Korea, Argentina, and Kenya. As of today, the United States government has no single consumer data privacy law similar to the GDPR. Instead, the U.S. takes a ‘sectoral’ approach, which relies on a combination of legislation, regulation, and self-regulation rather than government regulation alone.

 

While the GDPR was taking shape in Europe, the state of California introduced the California Consumer Privacy Act (CCPA). This state statute enhances consumer data privacy rights and consumer protection for California residents. When the CCPA passed in 2018, many companies and industry groups came out in favor of passing a federal consumer data privacy law. Now, California has gone a step further, introducing the California Privacy Right Act (AKA CA Prop 24). The CPRA imposes new requirements for businesses to protect personal information, including minimizing data collection, limiting data retention and protecting data security.

Why is Data Privacy and Security Strategy Important to Google?

As companies serving European audiences have begun adapting to more stringent consumer data privacy regulations, the degree to which US-based data platforms comply with those regulations hasn’t been cut and dry, with contradictions in policy complicating the issue. For example, a 2020 judgment from the Court of Justice of the European Union invalidated the EU-US Privacy Shield, a legal framework designed to allow enterprises in both the US and the EU to exchange personal data for commercial use. Because the US surveillance laws like the CLOUD Act require data disclosure from US-based companies when requested by the government, the EU-US Privacy Shield was ruled to provide inadequate protection to comply with GDPR requirements. This left a lot of companies and data platforms, Google being the largest, scrambling to address compliance gaps. That’s where GA4 comes in.

 

For the majority of US-based companies, migration to GA4, the fourth iteration of Google Analytics released by the company in 2020, is a likely part of the near-term strategy for complying with consumer data privacy legislation. Google released additional privacy controls in April of 2022 to further shore up the platform’s compliance with GDPR. Then they upped the ante for all companies using Google Analytics, whether they serve international audiences or not, by announcing that data collection via Universal Analytics, the predecessor to GA4, would stop July 1, 2023. While migration to GA4 or some other data platform is a pressing concern for most digital marketers and technology teams (and if you’re in that boat, we can help you with your GA4 migration), this is also an opportunity for both to come together to craft long-term, big-picture strategies focused on the very human emotion behind these technical shifts in data handling: the desire for trust.

What Does Consumer Data Privacy Mean for Your Data Strategy?

Experience defines how people feel about your brand and your business. Trust is built when brands and businesses consistently create experiences that deliver value to the people who interact with them while making them feel safe. Rather than focusing on the short-term proposition of choosing a new data platform, companies will be better served by focusing on long-term strategies for capturing, storing, and utilizing first-party data. Not only will this better equip marketers to navigate consumer data privacy regulations restricting third-party tracking capabilities, but it will create more valuable experiences for consumers, earning their trust and increasing the likelihood that they’ll willingly share their data based on the expectation of receiving value from that exchange. Here are some big-picture considerations for your long-term strategy for data privacy:

Prioritizing Data Ownership

Companies whose data privacy strategies prioritize data ownership will be better positioned to succeed as access to second- and third-party data becomes more limited. Customer databases and CRMs can be treasure troves of first-party data companies already have access to and can begin leveraging. Creating and gating high-value content or using other incentive-based strategies can be an effective way to convert zero-party data while offering consumers something of value. Investment in your data insights infrastructures is also critical for enabling a strategy for data privacy that also makes the most effective use of owned data to inform marketing strategy and drive performance..

Investing in Deep Knowledge of the Customer

Intimate knowledge of the customer has always been a foundational part of an effective marketing strategy. As shifts in the consumer data privacy landscape are leading the targeting capabilities available on third-party marketing platforms to become less precise, depth of knowledge of the customer will increasingly become a competitive advantage. The companies that know their customers best, from knowing and documenting their demographic and socioemotional characteristics in persona profiles to understanding how they verbalize their needs and pain points through search, to mapping their thoughts and behaviors throughout the customer journey, will be able to mitigate the impact that ongoing changes in the consumer data privacy landscape might have on their business.

Resisting Overreliance on Low-funnel Tactics

When it comes to marketing strategy in general and paid media strategy in particular, many companies are over-indexed in low-funnel investment. Given their proximity to the point of conversion, it’s easier for companies to draw a direct line from investment in these tactics to tangible returns. The truth is, that’s always been short lived in its effectiveness. Without investing in activity that feeds the funnel by introducing unaware audiences to your brand, the volume of those who make it to the bottom will dwindle over time. As new consumer data privacy regulations change the way success is defined and performance is measured, building the kinds of consumer relationships that drive long-term growth will take on renewed importance. Implementing full-funnel marketing strategies with content that attracts and engages customers throughout the customer journey rather than an overreliance on low-funnel paid media tactics will help companies maximize audience reach and create momentum throughout the funnel.

Moving Beyond a One-size-fits-all Customer Experience

According to a BCG and Google joint survey on consumer privacy and preferences, consumers are interested in the benefits that come from marketers’ ability to deliver a data-informed experience, like personalized content and increased content relevance. But consumer willingness to provide the data needed to create those benefits vary greatly by segment based on the kind of data being sought and consumers’ perceptions about how it will be used. Rewards programs, loyalty points, discounts, VIP programs, and content gating can help companies create the kind of value that consumers want to see in exchange for their data. But the research indicates that a one-size-fits-all approach won’t be effective. Companies that invest in understanding their audiences, segmenting them effectively, and creating segment-specific experiences will be better equipped to create value and inspire trust among their customers.

What Is Your Strategy for Data Privacy, Now and in the Future?

The kinds of monumental shifts we’re seeing driven by an evolving consumer data privacy regulation landscape present an opportunity for forward-thinking brands to advance businesses. While ensuring you have an effective, compliant data platform implemented in time to avoid data loss as Google sunsets Universal Analytics is a critical immediate move, this is a great time to explore your overall strategy for data privacy and measurement along the journey of your customers or users. And if you aren’t clear on the current or ideal journey to drive acquisition, engagement, and loyalty, now is the time to prioritize that discovery work. All to say, this is an opportunity not just to migrate today, but to position your company to advance and transform for tomorrow. If you’re looking for immediate GA4 migration support or you’re interested in transforming your CX to be more consumer-centric and first-party data-driven, contact us today.

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