Privacy and personalization or privacy vs. personalization? That’s the dilemma, Hamlet would have said! We have inconvenienced the protagonist of the Shakespearean tragedy, paraphrasing his most famous line, to focus attention once again on one of the most common paradoxes that occur when we talk about privacy and personalization of the customer experience.
While consumers are increasingly looking for personalized and valuable experiences to live in relationship with brands, they are also increasingly concerned about the protection of their personal data.
At the centre, brands, with marketers and strategists, have to meet their customers’ expectations in terms of personalisation and enhancement of the customer experience, while fully respecting their privacy.
The question then arises: is it possible to strike the right balance between privacy and personalization?
Let’s find out together!
- Privacy and personalization: what the data tell us
- Between personalization and privacy: striking a new balance
- First Party Data: how to build a privacy-first model!
- Personalization and privacy in the advertising world: contextual advertising
- Privacy and personalization: some guidelines
Privacy and personalization: what the data tell us
In order to answer the opening question, we relied on published studies and research on the subject, but the picture that emerges is not so obvious.
A McKinsey study from a few years ago finds that 71 percent of consumers surveyed say they favor personalized customer experiences, so much so that more than 76 percent of the same sample say they get frustrated if this does not happen.
Notably, as Gartner notes, the tendency to provide personal data and information in exchange for personalized experiences is greatest among millennials.
Again a recent study by Gartner, focusing precisely on privacy and personalization, however, shows that although there is a risk due to lack of personalization, there is also one related to hyper-personalization that makes consumers feel extremely “watched.”
The crux of the matter, thus, is easily found in the level of transparency of data collection and management that can be ensured: an ethical approach and clear information about the data processing itself, give security to users and put the brand in a good light.
The study “Privacy by design: the benefits of putting people in control” completed by Google and Ipsos on a sample of about 20,000 users across Europe and published in 2023, shows that consumers tend to prefer to buy from brands that grant them more control over privacy with options to choose on consents and ad personalization.
Control, but that’s not all: 43% of participants said they were also ready to switch brands if the latter offered a more positive experience in terms of privacy.
The percentages reach even more significant proportions if one also goes to assess the degree of transparency of the brand itself in the methods and purposes of collection. Personalization yes, but only with a level of control over the data: if this is what emerges most from the published studies, it is interesting to note that people often declare, more in words than in deeds, their interest in preserving and protecting their data.
Between personalization and privacy: striking a new balance
The personalization vs. privacy dilemma can be resolved, and going back to the original question, if we were to give an answer, it would certainly be positive.
Yes, the right balance between personalization and privacy can be found, and the ability for a brand to find and preserve it is certainly a key factor in the retention of its customers.
At the end of the day, the relationship between consumer and company is at stake, which, like any relationship, cannot be separated from trust and transparency.
In this regard, we report the framework made known by Google precisely in relation to the topic of privacy and personalization in order to make and enhance every experience and interaction between brand and consumer.
If you are a brand:
Make it Meaningful
Make data collection meaningful in the eyes of your users and customers and communicate to them the benefits they can gain from sharing information.
Make it Memorable
Make users track the choices they have made regarding privacy and handling of their personal information. Make it Manageable Making users aware of their privacy choices and making sure they can manage their information is important because we have the perception of total control over their data.
First Party Data: how to build a privacy-first model!
As we have discussed, the game now revolves around the collection, management and activation of first-party data, the basic ingredient for creating successful customer-centric strategies.
In a context that sees the gradual demise of third-party data-driven marketing and advertising models, read cookie apocalypse, adopting a strategy based on first-party data is crucial because it enables the creation of personalised customer experiences without the use of cookies.
What could have been, thus, initially considered a limitation for brands’ marketing strategies is turning out to be a great opportunity, namely that of investing in building a solid relationship with their users/customers, prioritizing transparency and consent.
What marketers and strategists now realize they have on their hands is the great potential represented by their audience, which until recently was greatly underestimated: detailed profiles with biographical information, behavioral data related to browsing and purchasing paths, and qualitative data, allow them to better profile and segment their audience.
It is from this in-depth knowledge that winning strategies are devised for complete omnichannel orchestration of the customer journey.
But doing so requires the right technological solutions that enable data collection and orchestration while fully respecting users’ privacy.
Personalization and privacy in the advertising world: contextual advertising
The demise of third-party cookies, although not yet over, has had a disruptive impact in the advertising world by challenging long-established models.
Here, too, first-party data has taken on a new centrality thanks in part to the use of advanced platforms such as the Data Management Platforms that allow the collection, management and normalization of their audience data in order to monitor user behavior and define highly profiled audience segments, always with full respect for privacy.
First-party data but not only: the demand for proper balance between personalization and privacy has been answered in the world of advertising thanks to the contextual advertising, a model ofdelivering advertising relevant to the context/content in which it is displayed.
Where more traditional advertising uses audience profiling and targeting criteria, the contextual model starts with the content in which the ad is to be placed and analyzes its keywords, taxonomies, and topics to allow for classification.
Targeting is therefore done by starting with the content and not the audience. Underpinning a good contextual advertising strategy artificial intelligence algorithms, machine learning, NLP enable contextual content such as text, voice, images, metadata, and geolocation to be analyzed in real time and at scale in order to deliver increasingly high-performing and effective campaigns
Privacy and personalization: some guidelines
Privacy and personalization can be the face of the same coin if brands and companies put their users/customers at the center.
Here then are some useful tips:
- Provide users with clear information about how their data may be used;
- permetti loro di avere un controllo completo sui loro dati;
- Minimizes data collection to only that which is necessary to create personalized customer experiences;
- Anonymizes data wherever possible through the use of technological solutions;
- Ensure security, transparency and take strict security measures.
