This article is sponsored by Verizon Media.
Up until recently, brands looking to break through the heavily saturated digital advertising ecosystem adopted third-party cookies as the anchor for behavioral and interest-based targeting. Even two years ago, spend on third-party data was still rapidly increasing – by 17.5% to $19.2 billion, according to a 2018 study by the Interactive Advertising Bureau and Winterberry Group.
However, with this uptick in user tracking came significant apprehension from consumers. A recent Verizon Media and IPG Study found that 87% of consumers were concerned about how their personal data is being used. But perhaps more significantly, that same study also showed that most consumers do see the benefit in data sharing, with 88% of respondents saying they would willingly exchange their data for a service – proving lack of consent and one-sided profit as the real causes for consumer distrust.
Now, as individuals and businesses rapidly shift to online and in-app tools to stay connected during the pandemic, these concerns have become magnified. With accelerated adoption of digital platforms, users are likely to feel even more violated by the lack of transparency around how their data is used, in particular for advertising.
“As the industry evolves, advertisers and publishers are facing new challenges to balance reach with consumer privacy and regulations,” said Iván Markman, Chief Business Officer at Verizon Media. “We all need to take a step back and put consumers at the center – driving value and humanizing the data exchange.”
Opt-in, first-party data and brand CRM lists will be the most direct and future-proof way by which brands can connect with their consumers. To set themselves up for future success, brands must focus on two things: upholding stringent privacy standards to maintain consumer trust through these challenging times and sustaining consumer engagement to maintain and grow vital first-party databases.
The path forward
As new standards and best practices crystallize in the coming weeks to adapt to these unprecedented times, the entire industry will need to rethink how it does business. One thing is certain: First-party data is the key to unlocking new insights and driving consumer engagement moving forward. Here are four recommendations to help advertisers, publishers and brands adopt data practices that meet the changing expectations of their consumers.
1. Transparency with consumers remains paramount. First-party data has once again become incredibly valuable for targeting, and good transparency into the value exchange for consumers is vital. To give consumers a reason to opt in to data capture, publishers will need to drive the right incentives for individuals to want to authenticate themselves. By securing meaningful user consent in exchange for a personalized experience, brands can generate valuable data while fostering consumer trust. But doing so will take a concerted effort across the industry to identify new solutions that meet rising consumer expectations, and the onus will be on brands, publishers and advertisers to seek partners with proven track records of managing and processing user data in a transparent and consistent manner. The players who voluntarily move to solve this challenge will not only earn the goodwill of their customers, they will also reap the benefits of helping frame up what the future of digital privacy and data protection looks like. Transparency needs to be humanized – meaning that it needs to be easy to understand and act upon.
2. Brands should focus on building consumer relationships. In challenging times, consumers want to know their relationships with brands go beyond the transaction. Delivering customer value in the coming weeks will be less about providing consumers the right offers in the right time and place and more about delivering a comforting voice and lending a helping hand. To connect with their customers, brands can leverage the same engagement channels – including loyalty programs, email newsletters and others – to deliver personalized messages to authenticated users that speak to their current challenges.
3. Sustained engagement now will pay off later. Across industries, sales are down as consumers worry about the economic impact shelter-in-place restrictions will have on a flagging economy. As a result, advertising priorities will need to change – even if only temporarily – to reflect this new outlook. In times of uncertainty, consumers still want to hear from their favorite brands to provide reassurance, normalcy and support, as demonstrated by a Verizon Media Coronavirus Consumer Study that found 64% of consumers wanted to hear from brands they trust during this time, and 56% of respondents saying they want advertisers to talk about what they are doing to help with the coronavirus. Shifting performance marketing KPIs in the interim to focus on and maintain engagement, rather than conversions, can better prepare brands for the future when spending inevitably increases and consumer behavior returns to normal.
4. Earn consumer data by providing real value. Publishers and brands need to incentivize consumers to authenticate themselves through fair barter in exchange for their data. In times of unprecedented uncertainty, consumers are hungry for reliable, quality content, entertainment and services that improve their lives. From subscription models to reward programs, offer meaningful omnichannel consumer experiences that solve real-life challenges and resonate in trying times.