The General Data Protection Regulation (GDPR) has hugely altered the data landscape over the past year and its effects are sure to extend far into the future, since similar laws are being implemented worldwide. As large tech companies are providing increased potential to personalise and opt out of data collection, it seems they are leading the transformation with an assurance of stronger privacy for customers. Unsurprisingly, privacy regulation is going nowhere.
At first, marketers will see a challenge. However, when you begin to look more closely, it presents boundless opportunities for them.
To stay competitive, companies must offer a seamless, personalised and end to end service. Now that online marketing channels have established a mainstream position, it is vital that companies give customers what they want, where they want and how they want. They must not only promote and reward loyalty, but also provide a genuine omni-channel experience, so they can move swiftly between channels within a single transaction. For example, ordering a product online, checking the status of an order on a mobile app and collecting their purchase from a local store.
But therein lies the rub. In order to provide this level of customer service that enables companies to survive and thrive – they need one thing above all else – data. Yes, just as GDPR kicks in and (quite correctly) protects the use of customers’ personal data, that very data increasingly becomes the lifeblood of business.
In particular, it is impossible to provide a genuinely customised, omni-channel and relevant marketing experience to customers without basing it on effective analysis of historic customer data sets. In fact, it is probably fair to say that the better segmented and more specific those data sets become, and the more comprehensive the sources drawn upon are, the better the end customer experience is. How can Marketers do this in line with such GDPR principles as data limitation and transparency?
Does GDPR rule out using consumer data in this respect?
The answer is ‘no’, but it definitely does dictate the ways and means by which such data can be sourced, processed and applied. To fall foul of GDPR is to risk catastrophic penalties, so companies in general, and marketers in particular, must take care.
But the good news is that, by careful selection of privacy-first partners, marketers can gain access to comprehensive data that is relevant to their objectives, they can run in-depth and revealing analytics and they can use this to provide a genuinely personalised customer journey and omni-channel experience.
The secret lies in second-party data.
The power of second party data
Second-party data is quite simply a trusted partner’s first-party data. The organisation sharing its data is uniquely well placed to ensure that the consumer has been through a controlled, opt-in process to support the data sharing. Additionally, the partner accessing the data knows exactly where it is coming from.
We can use an example to explore the kind of opportunities this creates. When two businesses share a commercial interest - for example an Airline and a Hotel chain - combining their data provides a larger, more meaningful and wide-ranging data set than anything either party could produce alone. What is more, when administered correctly this is done without falling foul of GDPR.
It is not difficult to see how collaboration of this kind can be immensely helpful to everyone involved. For example, the Hotel chain can use data from the Airline to engage with known frequent fliers to a particular destination; the Airline can use data related to recent hotel bookings to engage customers in-market for flights. In this example, second-party data benefits both parties by providing insights around how their customers are interacting with their partners.
How does second party data benefit marketers?
Data privacy has predominantly become a major operational challenge for both businesses and consumers. With the exponentially increasing demand for personalised and tailored services, customer data continues to become an extremely valuable business asset. However, it is an element that several businesses are not using to its full potential, due to compliance requirements .
Merging first and second-party data allows marketers to not just align with regulation, but also to gain better customer insight than they could have done previously. Marketers are then able to provide a higher quality and more relevant customer experience through the customer-centric marketing that consumers now expect.
It is fundamentally clear that GDPR has foreshown the beginning of a movement towards greater data privacy, and savvy marketers are aware of how they need to plan for this. GDPR allows for consumers to have far more control over their own data, but it also gives marketers a better insight into their preferences and allows for real targeted marketing, ensuring they only collaborate with those genuinely interested. Those adapting to the privacy transformation sooner rather than later, are already searching for the most relevant second parties to collaborate with - could this be your company?
Tim Abraham, Digital Advertising, LiveRamp