Consumer Privacy in the Digital Era: Three Trends to Watch

By Special Guest
Jessica Hawthorne-Castro, CEO of Hawthorne
January 18, 2018

Digital advertising has exploded in recent years, with the latest eMarketer data forecasting $83 billion in revenue this year and continued growth on the horizon. According to the eMarketer report, digital comprised more than 36 percent total media ad spend in 2016. The forecast predicts digital will account for half of ad spend by 2021, with mobile driving the majority of growth. Amidst all that growth is a burning issue: consumer privacy.

The opportunities delivered by digital are immense. As advertisers, we can deliver the specific information consumers are searching for while promoting our clients and their products. Between mobile applications, the growth of IoT solutions like Smart Home devices and digital assistants such as Amazon Echo and Google Home, and the rise of virtual reality shopping, digital advertising opportunities seem limitless.

But who owns the data? Where does it reside? And who’s responsible for protecting it? From personal information, to browsing history and app usage, to offline information like addresses and phone numbers, the wealth of consumer data in our digital era has immense value, and companies are competing to own it. Facebook, Google and Verizon all boosted their consumer data tracking efforts in 2016, and I expect that focus to continue even as the market wrestles with ownership of consumer data.

As more advertisers capture consumer data and use advanced digital technologies to deliver personalized campaigns, consumer privacy has become an important part of the conversation. Consumers want privacy. They want to trust that their personal data will be protected, and determining who is responsible for managing and protecting that privacy is still up in the air. There continues to be questions about the role of regulators; the feasibility of self-monitoring; the protections consumers should have vs. what information is acceptable for businesses to track; and the appropriate guardrails for data collection and monitoring.

To help advertisers navigate this changing landscape of consumer privacy, I’ve identified three trends to watch:

Establishing privacy best practices for digital campaigns

With geo-location tracking and the rise of Internet of Things (IoT) technologies, consumer privacy is an important consideration. So, although government initiatives aimed at protecting privacy are moving ahead, maintaining consumer trust should be central to any advertising campaign. That’s just good business.

At its core, advertising is a way to connect consumers with the products that would interest them, and today’s analytics give us a lot of insight to make that connection precise and impactful. But to maintain trust, companies that engage in digital advertising need to establish privacy guidelines, stay informed about privacy regulations, put a privacy statement in place, use tools like AdChoices, protect consumer data, and be truthful with consumers.

Improved internet content monitoring

Google, Facebook and Twitter have been under fire in recent months for amplifying propaganda, or “fake news,” on their sites. New details recently emerged around Russia’s use of their platforms to interfere with the 2016 U.S. presidential election, fueling the scrutiny. Google and Facebook promoted hoaxes and inaccurate stories from fringe, alt-right sites following the deadly mass shooting in Las Vegas earlier this month, only adding fuel to the fire.

The tech companies repeatedly blame their algorithm for the issues and pledge to make improvements; change has been sluggish. And considering that two-thirds of Americans report getting at least some of their news on social media, according to the Pew Research Center, it’s not surprising the scrutiny continues to grow.

We need accountability and accuracy from marketers, ad agencies, the media, and other entities, and social and search companies must responsibly manage the distribution of that content, as well. Expect this debate to heat up in the coming months, but even as potential change is on the horizon for social and search, advertisers that stay focused on accurate, truthful information and keep consumers in top-of-mind, will continue to amplify their success.

Focus on government privacy initiatives and regulations

While industry self-monitoring is at the core of upholding consumer privacy, sometimes self-monitoring fails. That’s where the Federal Trade Commission (FTC) steps in to enforce federal consumer privacy laws. The FTC may pursue legal action against organizations for violating consumer privacy rights or for failing to securely maintain sensitive consumer information. The Federal Communications Commission (FCC) also enacted privacy rules for internet service providers (ISPs) in late 2016. However, these requirements have since been nullified by the current administration.

There are still a lot of questions around who’s responsible for managing consumer privacy. As digital ad revenues continue their growth path, you can expect more changes from industry and government, as well as more expectations from consumers.

Edited by Mandi Nowitz
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