The GDPR Thaw: Marketers Tiptoe Back to Data-Driven Strategies

Note: a version of this article previously appeared in The Drum.

Months after the panicked scurry to come into compliance with the European Union’s General Data Protection Regulation effectively froze many marketers’ data-driven strategies, the true impact of the regulation on consumers and companies is coming into focus… and it’s much more promising than some feared.

As we approach the legislation’s first anniversary, the GDPR thaw is well underway as marketers channel their energy back into data-driven innovation. But the way many brands use data — and the types of data they use — looks dramatically different than before the GDPR deadline.

When GDPR went into effect in May 2018, marketers across the globe braced for a mass exodus of identifiable consumers: Given the option to withhold their data from brands and other third parties, wouldn’t most do so? Some reports suggested that anywhere between 50 percent and 90 percent of users might opt out.

But the GDPR hysteria has come and gone, and according to Matt Prohaska, CEO and principal of programmatic consulting firm Prohaska Consulting, fewer than 2 percent of consumers have opted out of sharing their data. Moreover, GDPR is already demonstrating a positive impact on customers’ relationships with brands.

One study found that 57 percent of consumers now have a deeper understanding of how companies use their data, adding that 27 percent feel they have a better overall experience with brands. Sixty-five percent of consumers say GDPR made no difference at all on their brand experiences, suggesting that much of the legislation’s impact falls into the “no harm, no foul” bucket.

This lack of concern among consumers seemingly came as a surprise to an industry that overhauled so many of its data collection and management practices ahead of the GDPR implementation deadline. But there were clear signs that consumers may have been less concerned about data privacy than the regulators representing them. In fact, it seems that consumers don’t care about privacy nearly as much as politicians would have us believe.

For example, research conducted between 2012 and 2017 by the Data & Marketing Association found that a growing number of consumers are happy with the amount of personal data they share. An increasing percentage of them also understand that the exchange of information is necessary to keep society running smoothly.

Legislators aren’t done yet, however. With the California Consumer Privacy Act’s 2020 introduction drawing ever nearer, marketers are wading back into the data pool with an eye toward CCPA compliance, safeguarding their organizations against the potential effects of future data privacy regulations.

Given that the GDPR imposes strict limitations around the use of third-party data — and with coming legislation likely to introduce even tighter consumer privacy restrictions — it was perhaps inevitable that the fundamental marketing transformation now taking shape spotlights a shift toward more controllable outcomes derived from first-party insights: i.e., data that brands own and operate with their customers’ express consent.

As the GDPR thaw continues, we’re hearing from marketers who are looking to balance their reliance on third-party data with more privacy-compliant ways to handle governance of first-party data in-house. Nearly 80 percent of brand marketers believe that GDPR has made using third-party data more difficult, according to research from Sizmek, and as such, 87 percent of marketers increased their use of contextual targeting following GDPR as a means of filling the void.

But this shift is likely to prove only temporary as marketers refine their approaches to putting their first-party data into practice. These proprietary insights have long been essential to disruptor brands like Amazon, Airbnb and WeWork, which gather information from each user interaction to continually refine and redefine the customer experience. This same first-party data also inspires new products and services, fulfillment strategies, partnerships and investments.

The GDPR thaw does not herald a return to business as usual. It’s not simply that brands must comply with the regulation to avoid financial penalties and negative press; it’s that GDPR has irrevocably changed how they think about customer relationships. As marketers reengage on the consumer data front, they’re going to interact with consumers in a more informed, more tactical manner than ever before, with an eye on long-term sustainability. And there’s no going back.

Originally published May 10, 2019

Jay Stocki

Jay Stocki was formerly the Chief Operating Officer of Signal.

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