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The Personalization Conundrum (Part 1): Balancing Consumer Data Use while Building Trust

How can companies handle their precious data while restoring the public trust?
Wendy Glavin is Founder and CEO of Wendy Glavin Agency, a NYC full-service public relations, marketing and social media agency. Wendy is a 30-year veteran of corporate, agency and consulting. She specializes in B2B2C marketing communications, PR, social and digital media. Contact her at: [email protected].
Wendy Glavin is Founder and CEO of Wendy Glavin Agency, a NYC full-service public relations, marketing and social media agency. Wendy is a 30-year veteran of corporate, agency and consulting. She specializes in B2B2C marketing communications, PR, social and digital media. Contact her at: [email protected].

Countless studies prove that consumers want more content tailored to their personal preferences and needs. Yet, when we share our email addresses, location, social media posts, images, speech segments, social security numbers, IP addresses, search histories and more, we’re creating a digital footprint for companies to follow and leverage.

Sometimes we’re aware of what we’re providing, but often, we’re oblivious about the amount of information that’s being collected, the ways it’s being used, and its value.“Whether data is fabricated by computers or created by real people, one of the biggest concerns will be how it is analyzed. It matters not just what information is collected but also what inferences and predictions are made based upon it.”—Wired, February 2019.

Are New Regulations Enough?

The European Union’s General Data Protection Regulation, GDPR, enforced in May 2018, regulates the processing by an individual, company or organization of personal data in the EU. Global companies and businesses that collect data from a company in the EU or are established outside the EU but provide products, services, or involve the actions of individuals in the EU must be compliant. Bottom line: Individuals have the right to know who, what, why and how their personal data in being used, and to obtain, object, restrict and delete such access.

Like their European counterparts, the California Consumer Privacy Act (CCPA) and Vermont’s laws, in particular, go beyond breach notification and require companies to make significant changes in their data processing operations. Other states have followed suit.

Nationally, in January 2019, the U.S Government Accountability Office (GAO) provided a report, “Additional Federal Authority Could Enhance Consumer Protection and Provide Flexibility” that urges Congress to develop comprehensive legislation on Internet privacy for enhanced consumer protections and flexibility to address a rapidly evolving Internet environment.

Delivering What Customers Want Will Incentivize Data Sharing

Some say that data is a company’s most important asset. As public trust continues to decline in companies, institutions, and the government’s collection, use and monetization of personal data, however, restoring the public trust must be considered of equal importance if not greater priority. “More than 76 percent of the general population say they want CEOs to take the lead on change instead of waiting for the government to impose it,” according to Edelman’s 2019 Global Trust Barometer.

Clearly, combining data innovation with effectively protecting customer privacy and security leads to increased brand loyalty and revenue growth. To achieve this goal, companies must stop using “third-party” data which is collected by data brokers and sold to companies that require increasingly larger datasets for audience analytics and targeting. Data obtained from multiple sources is less reliable and secure, while its consent is becoming harder to obtain.

“Second-party” data is the exchange of data between partners. “Second-party data allows brands to improve their own first-party data and to extend audience reach, targeting and analytics. In addition, this type of data may limit potential privacy perception risks associated with using third-party prospect information.” – Forbes, February 2019.

First-party” data is the most trusted because it’s gathered directly from the customer through interactions with company websites, subscriptions, downloads of Ebooks, newsletters, webinars, surveys, mobile apps and other content. In this case, the individual owns and controls the data which makes it more secure and enables brands to deliver targeted, relevant experiences throughout the customer journey.

If individuals trust the source and understand the contextual intention, they are more apt to share their personal information. To establish relationships based on trust, brands must present uncomplicated language, be transparent and consistent in their messaging, and collaborate both internally and externally about the adoption of new products and services, such as analytics, cloud and other digital innovations.

Internally, in particular, companies need to break down departmental silos and democratize data throughout organizations beyond just IT for employees to understand new business models, and must offer training for employees to be more agile.

As this debate kicks off, there will be plenty of proposals and competing interests for policymakers to consider. “We cannot lose sight of the most important constituency: individuals trying to win back their right to privacy,” Tim Cook writes. “Technology has the potential to keep changing the world for the better, but it will never achieve that potential without the full faith and confidence of the people who use it.” – Fortune, January 2019

For example, at IBM, work is being done differently in three fundamental ways. One is a stronger emphasis on project work: Individuals move around the organization to work on various projects and initiatives, joining teams for short stints before moving on to new teams to tackle new challenges.

Two, the entire concept of performance is shifting from primarily emphasizing outcomes to a model that also emphasizes the “how,” including the continuous development and application of new skills to keep up with the exponential rate of change in technology.

Finally, with the adoption of agile ways of working, continuous feedback becomes a critical part of workflow. IBM’s new performance management (PM) system was critical in order for the company to abandon the outdated concept of an annual feedback event and find a way to reinforce a culture of continuous feedback ? up, down, and across. – MIT Sloan Management Review, February 2019.

Researchers at MIT and Harvard have developed a new platform, Riverbed, which forces servers to only use personal data in ways for which users give explicit approval. While still in the proof of concept stage, it could offer a promising way for people to manage their data permissions. Web browser and smartphone apps do not communicate directly with the cloud. Instead, a Riverbed proxy runs on your devices. When users try to upload data to Facebook FB or Twitter, a remote proxy tags the data with a set of permissions called a “policy.” Then, users can choose from predefined restrictions. — Silicon Republic, February 2019.

Users have the right to own and control their data when companies are trying to categorize and identify them. The Cambridge Analytica crisis has highlighted many issues regarding whether or not existing laws and regulations are sufficiently protecting user privacies, security and values. In fact, Gartner IT picks digital ethics and privacy as a strategic trend for 2019. The key issue is about the abuse of trust that has been an inherent and seemingly foundational principle of the application of far too much cutting edge technology up to now.

Please tune in on Monday, Feb. 25, for Part 2: How Can the Public Reclaim Control of its Data??

Stories like Charlie Munger’s inspire me. It shows why you must live life as an optimist.