Privacy & Marketing: Strategies for a Cookieless Future

Marketing and privacy are on a collision course – and it’s a trajectory that has been plotted for some time now, says Forrester Senior Analyst Fatima Khatibloo.

This course was set, in part, because marketing has become “too good at connecting people and devices with a fundamentally byzantine set of connections enabled by adtech and martech,” she argues. Ultimately, a “cookieless future” is one that portends the loss of access to a lot of different kinds of data, which are the lifeblood of marketing. Worse, absent more consumer-centric strategies, it may threaten the loss of customers: the lifeblood of business.

Khatibloo cites three forces at play: 1) consumer behavior (i.e. increasingly privacy protective) 2) legislators and regulators (i.e. who are responding to consumer attitudes) and of course, 3) the browsers and operating systems (i.e., “Big Tech”).

To explore these forces and discuss strategies marketers can implement to thrive in a privacy-centered future, Khatibloo joined WireWheel’s CMO Camille Landau at the Spokes Privacy Conference to discuss Privacy & Marketing: Strategies for a Cookieless Future.

The analysis and consequent strategies elucidated by Khatibloo are essential to any marketing, privacy, UX, or business professional who values customer retention.

Consumer Privacy Attitudes and Behavior Are Changing

We have to be better at this. We forgot the human being when we started to design really advanced marketing and advertising tactics.

—Fatima Khatibloo, Forrester Senior Analyst

Consumer attitudes and behaviors around data and privacy have changed dramatically in recent years. Consider a few data points shared from recent Forrester Research:

• 71% of consumers are aware that their information and activities are being collected by the websites and Apps they use.
• 63% of consumers say it’s not okay for companies to track their activities across multiple devices for relevant ads.
• 24% of consumers do not trust any company – including governments, banks, and health care providers – to keep their personal information.

Only a few years ago this was just a lot of talk. People said they were concerned about these things, but they weren’t doing much about it. Today, 84% of online adults are using at least one privacy-protecting tool. This includes 43% of internet users who clear their Internet browsing history, 21% who universally block information through their device settings, and 20% that use private browsing.

The signal is clear: privacy protective behaviors are rapidly escalating and marketers need to pay attention.

Privacy Regulation and Legislative Response

No one wants marketers and brands to stop marketing. What they want is for that marketing to not feel surreptitious. What they want is for our data not to be shared with businesses that we don’t know it’s being shared with. And they don’t want to be tracked across websites and Apps in a creepy way.

—Fatima Khatibloo, Forrester

Regulation and legislative response has triggered a big part of the tech platforms position, notes Khatibloo. And with Apple’s app tracking transparency and Google’s deprecation of third-party cookies, large technology companies are now pitted against each other and the regulators.

Sadly, notes Khatibloo, part of the reason why Google postponed its planned deprecation of third-party cookies is that “the early Federated Learning of Cohorts (FLOC) tests showed that Adtech companies would absolutely leapfrog any attempt at ‘doing the right thing’” by using FLOC segment data to try to build persistent profile.

The Cost to Marketers

“Advertisers and brands cannot rest on their laurels just because Google pushed out deprecation for a year,” cautions Khatibloo. “We know that consumers who care about privacy will switch browsers now that it’s become so public. We know that those consumers will use more tools to protect themselves as they browse.”

Marketers cannot be complacent based on Google’s temporary reprieve. The potential cost to organizations from data deprecation is significant.

Without new strategies such as universal opt-outs and data deprecation, the consumer increasing proclivity to hide will exact ever-increasing cost on the marketing team’s ability to develop audience segmentation and insights. Keystones of digital marketing such as ad targeting, retargeting and measurement are going to get increasingly difficult without new approaches. “And let’s be clear,” opines Khatibloo, “that’s what cookies were originally created to do.”

Privacy Personas & Segments

Frankly, I just got really tired of people telling me that all millennials don’t care about their privacy. I knew this wasn’t true. So, I worked with our data science team beginning in 2015 to look at privacy attitudes and behaviors – building profiles and segments – to help us understand what it is that consumers really care about.

—Fatima Khatibloo, Forrester

Khatibloo emphasizes that privacy attitudes and behaviors aren’t binary; rather, it’s necessary to understand privacy attitudes as a set of “privacy personas.” Forrester research has found that there are four variables that drives the model:

1. willingness to share more personal information
2. awareness of privacy issues
3. comfort with the data economy
4. privacy protective behaviors

These four variables coalesce into five primary consumer segment.

1. The Conditional Consumerists are tech savvy, love to shop and very active on social media. 93% are enrolled in multiple loyalty programs and are willing to share information about themselves for perks. However, these consumers are very privacy aware: 39% will share their information only if they can find a place to opt out as well and 31% will use ad blocking and do-not-track settings.
2. Reckless Rebels are the segment that most evinces the millennial characterization of privacy insouciance. Representing 26% of the online population, they are the youngest segment and nearly 14% are students. However, only about one third are comfortable with cross device tracking and importantly, some – particularly students – will migrate to other segments when they have a life-stage event.
3. Data Savvy Digitals are a little more than 20% of the online population. This segment is very privacy aware and protective. Only 6% think it’s okay for companies to share or sell their personal information. They differ from Conditional Consumers in that only 28% (versus 93% of Conditional Consumerists) will share more personal information for points and perks.
4. Nervous Unawares, who represent ≈13% of the population, are concerned about their privacy but as the least educated and tech savvy segment, don’t know how to protect themselves. They are the least affluent. This segment is unwilling to share personal information under any circumstances. However, a full third are not aware of the privacy protection tools available.
5. Skeptical Protectionists, who represent 23% of the U.S. population, are the oldest among the segments (the baby boomers.) They are “super digital savvy, super security conscious, and are the most likely to take measures to prevent data collection,” says Khatibloo. 58% don’t trust anyone to keep their information secure.

How Can Marketers Activate These Insights?

Marketers need to start activating these privacy segments and start thinking about privacy through the lens of marketing itself…to start thinking about how their privacy peers can help them navigate this world of data deprecation [and] use privacy assets, privacy tools, and privacy guidance, to build the kind of trust with consumers that will let us turn around this data deprecation boat.

—Fatima Khatibloo, Forrester

To do take advantage of these insights, Khatibloo suggests that marketers consider what Forrester analysis found to be the “three pillars that form a customer-first privacy experience:”

1. Transparency
2. Meaningful Choice
3. Fair-Value Exchange

According to Khatibloo, transparency means “that you just have to provide really clear explanations of the data that you’re collecting and how you’re using it,” and it needs to be understandable to the consumer.

“Meaningful choice,” opines Khatibloo, “is really about data minimization.” Marketers need to think about what information a consumer (reasonably) needs to provide to access the service or product. “That means data minimization without breaking experiences and allowing customers to opt down, instead of just giving them a nuclear opt out.”

Crucially, “fair-value exchange” will have a different meaning for customers “depending on their privacy persona and their relationship with your brand,” says Khatibloo. “[Marketers] have to ensure that the trade-offs between data and value is balanced and fair based on what the customer expects.” Importantly, with every new use of data, advises Khatibloo, “you have to pass a reasonable expectation test,” even with first-party data. In other words, marketers need to approach privacy “through a human-centered design lens.”

Let’s be really honest with ourselves. We made everything about privacy experiences inscrutable. Privacy is my day job, and it still takes me hours to wade through the various privacy policies, permissions settings, and terms of service for the various sites and Apps that I use every week.

We can simplify this. I’m not suggesting that the legal document, which is a privacy policy goes away, but what I am suggesting is that we organize that information in ways that answer customer questions more simply.

—Fatima Khatibloo, Forrester

Leveraging Personas to Optimize Marketing Send

Understanding privacy personas will enable a much more effective marketing program (read effective spend). It will also engender consumer trust (read consumer retention). To make this shift to human-centered marketing and enable needed data capture, marketers must comprehend the privacy persona segments. In other words, consider the fair-value-exchange calculus made by each privacy persona when designing privacy experiences.

Most businesses do have an 80/20 rule, where it is very important for them to recognize who are their most important customer targets and to be able to communicate accordingly. It’s not to say that most businesses don’t have a mix, but what this segmentation does, is help marketers think about how to translate privacy from a reactive or perceived roadblock block into a positive: particularly through the lens of a unique segment.

—Camille Landau, WireWheel CMO

Consider, for example, Conditional Consumerist who will offer their data in exchange for perks and benefits but also highly value transparency. Their privacy experience will need to include friction-free ability to “opt out” or even close an account. Brands that demonstrate customer-centric attention to privacy signals and offer meaningful privacy and opt-out choices will do best with the Data Savvy Digital’s, as well, says Khatibloo.

But if your marketing program is targeting Reckless Rebels the key, says Khatibloo, will be to track their migration to other segments as they experience life events like marriage, credit acquisition, and professional progressions.

Meanwhile, Nervous Unawares require simple interfaces with clear explanations. And that most protective segment, Skeptical Protectionists – those with the most discretionary dollars to spend – will respond to an outreach program that consistently demonstrates integrity and transparency.

By joining the three pillars of privacy communication (meaningful choice, transparency, and fair-value exchange) with the target privacy persona segment(s), organizations can build a marketing strategy that slows data deprecation. And, critically, the data you will have at your disposal – zero-party data – is inarguably the most valuable consumer data for a successful marketing organization.

Watch Privacy and Marketing: Strategies for the Cookieless Future