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2014 Brings Unwelcome Attention to Data-Driven Marketing

The New Year brings with it continued challenges for those aiming to protect data-driven marketing from new regulation. Recent situations put data-driven marketing under a harsh spotlight and into a storm of renewed regulatory and legislative attention. It seems that 2014 is already a year when marketers are perceived as the bad guys for trying to protect consumer privacy.

Yet, we know that responsible marketers are the good guys. We aim to collect and use data with respect, transparency, notice, and choice. Even so, marketing practices are under fresh scrutiny these days.  Consider the following:

Commerce hearings led by Senator John Rockefeller (D, WV) in December focused on the “data broker” practice of sharing consumer data across marketing organizations. Senator Rockefeller and his committee colleagues readily acknowledge the good value consumers reap from relevancy, loyalty, and other data-driven services. They know consumers and the economy win. Yet, Senator Rockefeller said, “I can’t put my finger on it exactly, but I know there is something evil there.”

Several congressmen have introduced new privacy regulation, including Senator Leahy (D, VT) who introduced a version of his Personal Data Privacy Security Act that he originally authored in 2005. This witty review from Direct Marketing News Senior Editor Al Urbanski is clever and apt because, to marketers, these kinds of bills are ridiculous. However, they’re completely real. 

Data breaches by two well-known retailers in December signaled the risks and potential consumer harms that can come from marketing data collection and use. Consumers are now on heightened alert about their data, which isn’t unnoticed by regulators and legislators trying to win hearts and votes.

The President delivered an address at the Department of Justice in Washington, DC in mid-January regarding changes to National Security Agency (NSA) programs. While his remarks focused on government surveillance, the President also commented on the use of consumer data by the business community and other related privacy issues. The President noted that “there was a recognition by all who participated in these reviews that the challenges to our privacy do not come from government alone. Corporations of all shapes and sizes track what you buy, store and analyze our data, and use it for commercial purposes; that’s how those targeted ads pop up on your computer or smartphone. But all of us understand that the standards for government surveillance must be higher.”

Unfortunately, the fallout from all of this is that it’s getting easier for policy makers and consumer advocates to lump responsible data-driven marketing practices with government spying or illegal data uses. We must take every opportunity to educate consumers and policy makers on the difference. Marketing data used for marketing purposes provides huge value to consumers (think free hotel rooms from your loyalty program or free access to leading journalism), as well as to the economy.  A recent report from the Data-Driven Marketing Institute found that responsible data-driven marketing—including the flow of data between companies—is a $156 billion industry, generating 675,000 jobs in 2012 alone.

So what can marketers do to defend our practices and protect our ability to responsibly use consumer data in marketing?

Get informed: Make sure that your marketing team has a privacy lead. Make this person the lead insights manager to keep your team updated and prepared. Educate your customers and partners on your practices. 

Get prepared: The recent data breaches show how we’re all at risk to malevolent forces. Is your team certified? Do you have a readiness program in place?  Are your practices above reproach? Better to examine now than under the magnifying glass of a regulatory review.

Get active: Think about the issues that would most impact your business growth. Patent trolls? ECPA reform (the law that allows governments to access consumer data held by companies without a warrant)? Data collection and use? Third-party cookies? Consumer control over data practices? If any or all will materially impact your business, the industry needs you to step up and join the battle. Even small companies can have a voice through your trade association or with partners.

I know that this kind of data stewardship feels more like a vitamin than a pain killer—it’s nice to have, but there’s real marketing work to be done. But take another look at what’s happening today: The four points that I mention at the beginning of this article are just the tail end of a two- to three-year pressure cooker for our industry. Our success is now noticed, and unfortunately, it gives both consumers and policymakers pause.  

It’s no longer optional to protect your business and our industry from the heedless regulation being proposed under current scrutiny of marketing practices. Build this into your marketing operations now.

  Stephanie Miller is VP of member relations and chief listening officer at the Direct Marketing Association. She is a relentless customer advocate and a champion for marketers creating memorable online experiences.  A digital marketing expert, she helps responsible data-driven marketers connect with the people, resources, and ideas they need to optimize response and revenue.
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