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Impact of Data Privacy Regulations On Digital Marketing Practices

The digital marketing world has become synonymous with rapid and continuous evolution, driven largely by technological advancements, consumer behavioral changes, and most notably, the regulatory requirements surrounding data privacy.

With the wings of digital (r)evolution ever stretching, consumers are growing increasingly concerned, even uncomfortable, about data collection in their day-to-day interactions with the digital realm. A recent survey by Harvard Business Review found that

Such privacy concerns have necessitated a new era of stringent privacy measures continuously reshaping digital marketing as we know it. The rise of legal initiatives such as the General Data Protection Regulation (GDPR) in Europe, the California Consumer Privacy Act (CCPA) in the United States, Apple’s privacy changes, and offerings like Firefox’s Enhanced Consumer Data Protection has had quite an impact on digital marketing with marketers now wondering how to develop targeted advertising without the wealth of consumer data at their disposal.

As the impact of data privacy laws continues to ripple across multiple industries, corporate leaders such as heads of marketing, privacy, information security, technology, and compliance will all face new job descriptions and responsibilities, to mitigate and comply with this new way of doing business.

What is Data Privacy
in Digital Marketing?

Most corporations have been slow to realize that data privacy laws pose a significant impact on their digital marketing practices. The new data risk landscape means that information managers and marketers must scramble to come up to speed on data privacy quickly if they are to ensure continuous growth and ROI for their marketing investments.

Data privacy gives consumers the right to delegate how third-party organizations use their data. Your company can no longer rely on implied consent to direct marketing, and as a business leader, you must now impress upon your team the necessity to comply with a wide range and sometimes conflicting regulations and legal responsibilities across industries and jurisdictions.

let us look into GDPR and CCPA – two of today’s most important regulations and what they mean for your business.

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General Data Protection Regulation (GDPR)

A privacy law effected in 2018, GDPR applies to all organizations that process the personal data of European Union citizens regardless of where the organization is based. The regulation requires organizations to obtain explicit consent from individuals before collecting, storing, or manipulating their data in whatever way. Under GDPR, people have the right to access, correct, delete, and object to the processing of their data. Non-compliance attracts significant penalties.

California Consumer Privacy Act (CCPA)

CCPA is very similar to GDPR and was effected in January 2020 in the United States. It applies to any organization that collects the personal data of California residents and has annual revenues of $25 million or more. This regulation gives Californians the right to know what personal information is collected, how it is used, and the right to opt out of the sale of personal information. Companies must also implement reasonable security procedures and practices to protect the collected data.

Other important regulations to look into include the United States’ Health Insurance Portability and Accountability Act (HIPAA) and Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA).

How data
privacy regulations
impact Digital Marketing.

Simply speaking, data privacy is the cost of doing business today. Corporations must now adapt their strategies to comply with these regulations and prioritize responsible data handling and privacy-centric campaigns.

As more digital information is collected, processed, and sold by various entities, the need to fully embrace the new data privacy environment is becoming a corporate imperative. As individual states adopt new – and sometimes differing – data privacy laws, corporations will notice increased legal action by the various legal entities, not to mention individual consumers via the private right of action.

Even the tech-giant Facebook, unable to escape the microscope of privacy regulations, has suffered the infamous Cambridge Analytica scandal which not only cost the corporation millions of dollars but also significantly tarnished its reputation.

How data privacy regulations impact digital marketing

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Enhanced Transparency

To gain trust with consumers and build a competitive advantage, your company must be able to provide complete transparency and accountability about the collected data. You can achieve transparency by emailing customers to explain how their data will be used and providing an opt-out choice. Having a dedicated page on your website highlighting how you’re planning to use your customer data could also go a long way in scoring you some transparency points.

But this is not all work and no gain. Being transparent with consumer data could become a unique selling proposition for your brand. Apple’s latest iOS 14.5 update – a major precedent that brings data collection of various app developers into the public spotlight – has quite endeared the company to the consumers.

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Limited Data

Regulations such as GDPR and CCPA specify exactly the kind of data organizations can collect and provide consumers with the option to opt out of data collection entirely. Long gone are the days when organizations collected data as they see fit. Your company must now have a valid legal basis for processing personal data, such as explicit consent from the individual – which is not easily achievable.

However, a Forbes article dated November 1 2021 highlighted a recent Experian survey report stating that 70 percent of consumers would be willing to share more data if they could benefit in return.

What does this mean?

If you can show the real benefits of gathering consumer data while maintaining the integrity and privacy of your customers, you will have an edge over the competition. Achieving this isn’t as complicated as it may sound. You can start by collecting data not just to boost sales but to allow you to tailor your products and services to best satisfy your customers. When you deliver a better-tailored experience to your customers, they’ll surely be encouraged to reciprocate by availing more data to your disposal.

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Increased reliance on first-party data

The reduction of available consumer data has spurred marketers toward gathering first-party data directly from consumers through subscriptions, registrations, and other direct interactions. This transition requires more sophisticated content strategies, customer relationship management (CRM) tools, and loyalty programs to encourage customers to share their information directly.

Having such continuous and direct communication with your customers goes a long way in building trust and loyalty.

In a nutshell

Data has become the cornerstone of every business and has revolutionized every facet of all capitalist societies. Data privacy is no longer just a box to be ticked to avoid legal complications; it’s the engine that will propel your corporation to future growth opportunities and create more innovative marketing strategies that will surely set you apart in an ever-crowded marketplace.

To ease the burden on your internal team, you could consider outsourcing your data privacy and compliance needs to third-party experts who would, among other things, assist you to:

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Tonny Ogwa is a storyteller. He tells stories about people and brands. His work has been published in both regional and international literary journals, newspapers, and other publications. When he is not writing, he's reading a good book or watching a terrific film.

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