privacy and advertising

Building Trust with Customers: Privacy-Centric Strategies for Effective Advertising

Customers still demand personalization. Marketers must find new ways to balance personalization with privacy.

Customers want personalization. It used to be that as customers browsed websites and made purchases from brand to brand, third-party cookies would collect data on their movements. With all their online behavior tracked, marketers could follow customers across the web and deliver customized ads.

by Caleb Benningfield

But the old ways are changing. Third-party cookies are being phased out by major browsers and regulations like General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). On top of that, customers are demanding greater privacy and control of their data.

But one thing hasn’t changed: Customers still demand personalization. Marketers must find new ways to balance personalization with privacy. This means shifting their focus towards privacy-centric strategies that respect customers’ data and preferences.

What are customers’ data privacy preferences?

Forrester released five privacy personas in its 2022 U.S. Consumer Privacy Segmentation report. These personas are based on attitudes and behaviors toward companies’ collection and use of personal data. 

The largest segment, Reckless Rebels (31%), are willing to share their data for better personalization and are the least concerned about privacy. The second-largest group, however, the Skeptical Protectionists (23%), are highly concerned about the security risks of digital life and avoid all types of advertising. Between these two extremes, three other profiles emerge—Conditional Consumerists, Data-Savvy Digitals and Nervous Unawares, who vary in their privacy preferences and behaviors.

With Forrester’s profiles in mind, here are some best practices for effective advertising that prioritize customer privacy while delivering personalized experiences.

Communicate the value of exchanging their data

Consumer trust is key. Forrester’s report found that customers who trust brands are more willing to share their data. For example, 42% of Reckless Rebels trust that companies use their information to improve online experiences. They want personalization and don’t mind sharing information to get it. One way of earning trust, then, is to provide value in exchange for data.

Examples might include personalized recommendations based on purchase history and browsing behavior, exclusive discounts or promotions, or early access to new products or services.

Two profiles, Conditional Consumerists and Data-Savvy Digitals, are big shoppers willing to exchange their information only if they see value in doing so. For example, loyalty programs would appeal to Conditional Consumerists, who are willing to share personal information for perks like gas points and coupons. In fact, over 93% are already in a loyalty program. Customers who willingly share their information will, in turn, enhance your first-party data, enabling you to market to your customers with meaningful incentives.

However, only 25% of Data-Savvy Digitals will share personal information for loyalty programs. Most often, they will only share data in exchange for the product or service they want. To continue to gain their trust, brands must be thoughtful when advertising to them and consider only sending exclusives based on their purchase history.

Skeptical Protectionists and Nervous Unawares will be the hardest to convince with perks. Don’t count on them opting in.

Skeptical Protectionists are well-informed about data privacy and don’t believe companies can secure their information. The opposite is true for Nervous Unawares. They’re the least tech-savvy and don’t know how companies use their data. By prioritizing their first-party data profile—data from your website, surveys and feedback, and purchases, you’ll have a better view of these customers.

Give customers choices to control their data

Customers are increasingly concerned about online privacy and security. Forrester showed that all five customer segments use at least one tool to protect personal data. 

If marketers want to build trust with all their customers, they not only need to be transparent about data collection and usage but also provide customers with meaningful choices. Investing in a preference-management experience can build both consumer trust and your first-party data. This includes implementing tools or systems that allow customers to opt out of specific communications or data sharing.

For example, by including communication preference boxes, customers can genuinely choose when and what they want to hear about from the company. The box could be displayed during the sign-up process and incorporated into advertising campaigns or website experiences, making it an additive interaction. This would be a great time also to add an incentive to pique your customers’ interest.

Choose the best way to advertise to consumers

However, the most effective way to advertise to consumers is by using first-party data. With first-party data, you can achieve higher match rates and future-proof your advertising efforts. This approach allows you to understand where your customers are engaged, so you can meet them where they are and deliver targeted advertisements. Here are some strategies you can use:

  • Site personalization. Site personalization asks users to allow companies to tailor their website’s content and ads to match their interests and preferences. You’ve probably seen this on a banner offering two options: “Accept All Cookies” or “Reject All.” This method doesn’t feel like marketing. Consumers get a more relevant and customized experience, and marketers get better customer engagement and increased conversions. For instance, 46% of Reckless Rebels are OK with companies tracking their activities across multiple devices to receive more personalized ads.
  • Connected TV advertising. This provides an opportunity for banner ads, promotions and other types of digital ads that don’t feel like traditional commercials. Connected TV advertising uses first-party data via hashed emails or phone numbers. Over the past few years, this has become a popular advertising method on devices like Roku, Apple TV and Samsung TV. Since customers are already watching TV, it feels organic.
  • Paid media channels. Google Ads, Facebook Ads, etc., can also effectively reach current and prospective customers. However, the most effective way to use these channels going forward is to use first-party data, which results in higher match rates and future-proofing benefits. Your existing customer data allows you to target consumers with relevant content that will increase organic interaction and make them less likely to view the ads as spam.
  • Direct marketing channels. One of the most direct approaches is sending targeted ads with email and SMS. Offering incentives can encourage customers to sign up for these channels. But, if you constantly send messages to consumers, you’ll likely see them opt out rather quickly. Instead, focus on quality over quantity. Use past purchases or behaviors to tailor campaigns, and you’ll likely see improved engagement and retention.

Unify your customer data for better privacy management

Most companies don’t completely understand their customer data. Data collected across multiple digital and offline touchpoints—purchase history, email history, support tickets, loyalty programs, POS—becomes challenging to manage and activate when it’s siloed.

This siloed data can also cause marketers to treat customers as multiple people. This is particularly true for engaged customers who give you the most data. And the more data that’s collected, the higher the risk of dirty data, like misspelled names or duplicate records. This can lead to high-value customers receiving multiple irrelevant campaigns, resulting in a poor experience for them which creates a risk of unintentional customer churn and wasteful excess marketing costs.

This is where a unified data strategy comes into play.

A unified data strategy allows for more efficient and accurate data management. This includes suppressing customers who have opted out of communications and then being able to maintain the integrity of that information across all channels. By understanding the types of data, where it’s stored, and how it’s collected and used, marketers can make informed decisions and tailor their strategies to meet the unique needs of their customers.

Investing in customer data platforms (CDPs) enables companies to track, manage, and integrate customer data across all touchpoints, resulting in a more cohesive and personalized experience for customers. This not only improves the customer experience but also saves time and resources while keeping companies compliant with privacy laws

With a unified data strategy in place, companies can build trust with their customers by providing personalized experiences based on accurate and relevant data.

Caleb Benningfield is the Principal Solution Architect at Amperity. With over seven years of experience at Amperity, the leading customer data platform (CDP), Caleb has held various roles, including Principal Solution Architect and Forward Deployed Engineer. As one of the first employees, he was pivotal in establishing the Customer Success team and was involved in the company’s first major successful customer project with Alaska Airlines. Caleb has the unique ability to bridge the gap between technical aspects and market perspectives.

Photo by Franck on Unsplash.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Previous Article

Allant Group Launches Audience Management Platform+ (AMP+)

Next Article
connected customer experience

How to Deliver (and Improve) the Connected Customer Experience

Related Posts

Subscribe to TheCustomer Report

Customer Enlightenment Delivered Daily.

    Get the latest insights, tips, and technologies to help you build and protect your customer estate.