For any organization holding its customer’s personal data, GDPR and CCPA have upped the ante on Privacy. The big question for marketing and product leaders is ‘How can privacy be profitable?‘
Chasing the goal of profitability through privacy, I curated the Privacy Conference at Web Summit 2019. I attended sessions relevant to privacy seeking answers.
There is a $300B digital advertising industry that has been built on top of unregulated processes with regard to personal data. My question was how were the industry experts responding to a changing business environment with respect to privacy.
Starcount: Knowing your customers, easy to say, so hard to do
“Data is the new oil and oil needs refining” began Edwina Dunn, CEO of Starcount. “We all know the Internet of Things [..] but what I put to you today is that what we’ve forgotten so far is that there is a geography of things, because we all live in the real world we’re all here today. [..] one of the really exciting challenges, is how do you connect the offline and online worlds. And I think you do it by connecting internet and geography of things. If you can reduce all of that data to one simple explanation of a consumer, or a customer. You have the opportunity to classify everybody in the world, every week, or every month. And that’s really the ambition bringing all this data together in one code. [..] So one code that describes that all and combines the internet and photography of things, helps you to understand what do people do when they’re not with you when they’re not shopping with you. [..] So you can classify everybody[..] you can take all of that social online word, and you can apply it to everything you know about the real geographic world [..] you can find people, and where they live or work from this data. And so long as you protect it and encrypt it in the appropriate way, it’s all compliant.“
S4 Capital: Building the next great ad’ empire
Martin Sorrell of S4 Capital was interviewed on ‘Building the Next Great Ad Empire’. The focus was very much about building a digitally native agency that would dis-intermediate legacy models. At the very end of the interview, answering the question on data stewardship -“How are you working to protect the consumer?”, his response “My view on it has always been that as long as you educate the consumer [..] on what he is she is signing up for it’s fine. [..] If the consumer then decides if they want to sell their data, the article in the FT front page, where a guy sitting on a London bus and by the time he gets to work, he’s received one pound thirty-nine, which covers the cost of his bus fare, for selling his data. And he knows what he’s selling. He knows what he’s going to be used for. – that’s the equilibrium that we have to establish.”
Both recognized that privacy regulation is important and imminent, but there were no concrete measures of how they would give consumers control. Rather, they would maintain compliance with new privacy laws and allow either government commissions or society to take the lead.
Next Steps For Marketers
As a marketer, your job is to create and nurture product markets. Data has been incredibly effective in enabling this, yet without regulation has created paths to exploitation and bad actors. New regulations put a throttle on current customer acquisition practices and engagement models. Yet there is an opportunity right now to turn this constraint into competitive advantage. Here are 6 steps to move to a privacy-for-profit model.
First build trust
- Implement Governance: establish an actual operation model for governance that goes beyond compliance.
- Offer Transparency: ensure that your current customers gain transparency into how their data is used and the benefit they receive.
- Enable Control: give them some means of control, there are many third party solutions that could be leveraged.
Then find profit
- Determine Value Proposition: what are new propositions that can be created out of consent. What are the data products, what is the consumer offer?
- Create the Value Chain: what is the data value chain required to deliver a profitable business. How do we create a data mobility infrastructure and work with partners to create new value?
- Make it Scale: how can the profitability grow as that proposition scales? What are the business models and data value projections that will justify investment?
3 Points Digital’s Personal Data and Privacy practice will help you find the profit model in your privacy preparations. We provide interim Chief Data Officers and frameworks for Governance, Transparency and Control.
Web Summit Videos
Knowing your customers, easy to say, so hard to do, Edwina Dunn, Starcount
Building the next great ad’ empire, Martin Sorrel,S4 Capital