by Alexander Avitabile
What Are These Data Privacy Laws and How Should Agencies React?
It’s no secret that in today’s age of advertising, consumer data is of utmost importance. Every agency, client, and brand is using data-driven insights to help address the core needs and wants of today’s consumers. And with the rapid expansion of the technology we use on a daily basis, personal data is becoming increasingly abundant. But what happens when people want more power over their personal data that companies are continually mining for insights?
Enter the General Data Protection Regulation (GDPR). The GDPR, which went into effect in May 2018, is a European Union-wide regulation that controls how organizations handle personal data. Essentially, if a website reaches anyone within the EU, regardless of where the company is based, that organization or brand needs to obtain prior consent from the visitor to collect this valuable data. When enacted, the GDPR was one of the largest data protection initiatives created in the 21st century.
Now, less than 2 years later, the state of California has enacted the California Consumer Privacy Act (CCPA). The CCPA is a data privacy law that regulates how businesses handle the personal information of California residents. The CCPA is the first law of its kind in the United States. While the CCPA is specific to California residents, the law has global implications because businesses that are not based in California can be held accountable if they fall under the threshold of compliance. The trend? Two massive data privacy laws with global implications put into effect within 2 years of each other, and this trend doesn’t seem to be slowing down anytime soon.
How are these data privacy regulations unique?
Although there are plenty of differences between the GDPR and CCPA (for example, who must comply and who is protected), both laws have similar effects from their respective approaches. A main difference between these laws lies in the right of prior consent, which is specific to the GDPR. The CCPA gives consumers the right to opt-out, or withdraw consent, but has no legal equivalent to the right of prior consent. A good metaphor for this difference is this: “Where the GDPR creates a door for [the user] to lock any prior data processing, the CCPA creates a window for [the consumer] to open, in order to find out what of their data has already been obtained by a business or sold to a third party”*. The bottom line is that consumers have more power than ever before over what companies can do with their data, and brands must evolve to remain compliant, build trust, and continue to advance data-driven insights.
What does this mean for your brand?
First, it is imperative that companies are compliant with both legal guidelines. Second, it is more important than ever that agencies showcase the true benefit of consumer data. Not just the benefit that companies receive, but the benefit consumers receive as well. Through the utilization of personal data we can create better incentives, appropriate targeting, and a seamless customer experience that considers the personalized needs and wants of the individuals we serve. When consumers can see that they aren’t giving away personal information for naught, they are more likely to opt-in. We need to prove to consumers, now more than ever, that we utilize personal data to give them a better experience.
“We need to prove to consumers, now more than ever, that we utilize personal data to give them a better experience.”
Through the transparency of our use of personal data, we can build more trust between consumer and brand. One of the key components within data analytics is making the numbers matter. It is one thing to pull together a large spreadsheet of useful consumer data. The challenge comes through analyzing and understanding the data to create insights. This process can be utilized to generate insights about consumers, and for consumers! When we show people how we are using their data to help them, we establish a real-life connection within the market.
The human touch is essential in all aspects of marketing, and it is vastly important that we make sure to show our consumers that we’re using their information to enhance their day-to-day interactions with our brands and products. Through this, not only can we build more trust between consumers and the brand, but we can improve our work and ensure that we are getting the most out of the data we use so often.