According to Wayne Coburn, Director of Product at Iterable, consumers want it all. They want bespoke, custom experiences. They want to feel like brands know them personally. They do not want to be bugged, but they do want to be in the loop. On top of these demands, they do not want their personal information shared.
How can businesses address these issues? According to Coburn, there is a path forward, as he explains to Digital Journal.
Let’s talk about data
Coburn says: “There is quite literally no field in the world that doesn’t deal with data. But dealing with data is quite different than mastering data. And before you can master data, you need to learn about data”.
By this, Coburn means:
- Zero-party data is data that a customer voluntarily gives a brand. This could be an email address provided in exchange for a discount coupon, but zero-party data also comes from customer profiles and preference settings.
- First-party data is data a customer provides a brand from their actions, like intents based on browsing a brand’s website or app or adding things to a cart. Since actions speak louder than words, first-party data is usually the most accurate data a marketer has. However, zero and first-party data together represent the most valuable data a brand has on its consumers.
- Second-party data is another company’s first-party data that a brand has access to, usually through a partnership. If brands are complementary, not competitive, then both benefit from the arrangement, and I expect to hear more about second-party data over time.
- Third-party data is data collected and managed by a company other than the brand, and brands purchase this data to augment their own. Although third-party data might include inaccuracies, historically, it has been more accessible and economical for brands to buy data than to collect and maintain it. This is especially true for brands that, for whatever reason, do not have direct relationships with their customers. I always buy the same brand of toothpaste, and I usually buy it from the same store, but I don’t have (or necessarily want) a deep relationship with Proctor & Gamble.
The list can be daunting to businesses, or, as Coburn puts it: “So many types of data! The more, the merrier, right? Wrong.”
Instead, Coburn sees the amass of data as a problem, noting: “Consumers have been in the dark about what data companies are collecting on them (and how they are using) it for a very long time. To make matters worse, their data wasn’t just stored, used, and tossed. Consumer data was captured, sold, used, and sold again. All without consumer consent (or knowledge).”
For a while consumers were unaware of what happened to there data – but not any more.
The Consumer Awakening
In terms of consumers understanding more about their data, Coburn recollects: “Remember 2013? It was the year of the FroYo and the Selfie. Vine was trending. The Boston Bombing and the Cleveland kidnapping captivated (and horrified) the world. It was also the year of the Yahoo data breach, which impacted 3 billion users, and the MySpace breach, which affected around 360 million user accounts. 2013 was not a good year for brands. On the other hand, it was a great year for the Harlem Shake, and the beginning of what I like to call the ‘Consumer Awakening’”.
Things are more sophisticated now, notes Coburn: “Fast forward to 2018, the year of the Keto diet, the unicorn cake, and the Cambridge Analytica and Facebook Scandal. The high-level: The Times reported that, in 2014, contractors and employees of Cambridge Analytica – owned by right-wing donor Robert Mercer – were eager to sell psychological profiles of American voters to political campaigns. They acquired the private Facebook data of tens of millions of users — the largest known leak in Facebook history. It wasn’t a good look for social media (or politics).”
The outcome of this, Coburn observes, is: “Today, consumers are not only aware that their data has been (and is being) used, but they want it to stop. Political governing bodies, responsible for their citizens’ safety and at the mercy of public opinion, have responded with fervor, rolling out policies like GDPR and CCPA that restrict the use of consumer data. Brands like Google and Apple, heavy weights of governance in their own right, have followed suit.”
The Enlightenment
With reliance upon third-party data declining, how should businesses react?
Coburn says: “If you paid attention in economics, you’d know that when supply decreases and demand stays constant, things get…expensive. With the pool of data limited, and data collection closed for good, the third party data that is available will be stale. “Less effective, more expensive”. Has a nice ring to it if you ask me.”
As to the situation, Cockburn says: “To recap: rich third-party data is going away because consumers want control of their psychological and behavioral blueprints. They don’t want their predictions and purchase histories sold to the highest bidder. In the last few years, enlightened consumers have enabled ad-blocking on desktops and manually disabled third-party tracking cookies (some browsers even disable these by default). And what consumers wanteth, brands and companies giveth.”
This means new strategies for businesses. Here Coburn reassures: “Change is never easy. And while the Consumer Awakening is hard to swallow for some, companies that are thinking differently about this challenge are profiting; Apple is selling privacy as a product, and they’re finding that privacy sells.”
Coburn’s closing words of advice are: “As painful as the loss of the consumer manual is for us as marketers, it’s nothing to complain about. Why put off the inevitable. It’s time to stop being enraged and start getting enlightened.”
