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Marketers Aren’t Safe From Data Privacy Rules

As marketing and sales become increasingly digitized, data is the new lifeblood of the customer experience. As more and more tools are released to help understand customer needs, and interactions are managed on data management platforms, these new capabilities are useless without data to fuel them. Data provides the insights into customer needs, wants, and behaviors that can create a unique customer profile. With the right tools, these potential buyers can be nudged toward your product. No more cold calling, no more guesswork on marketing campaigns, and no more wondering about your ROI. Now you can track and respond to your customers in real time.

Fair enough. The what — data — is well known. But what is changing in 2019 and beyond is the how. How to harvest the data, and how to do so ethically. Therein lies the challenge.

Last week DMN published an article detailing Facebook’s inability to keep data private and its sharing agreement with other tech giants, namely Google and Amazon. The revelations were serious: Facebook’s damning relationship with Cambridge Analytica had far-reaching consequences, like voter suppression during a contested presidential race. The ease and accessibility of data for anyone to benefit from has significant implications. Once the proverbial genie has been released from the bottle, there’s no going back.

Data privacy policy in the United States is still in its infancy, but guardrails do exist. So far, large tech corporations like Google and Facebook have entered agreements with the Federal Trade Commission regarding data privacy regulations. These regulations have essentially been ignored, and with few consequences.

In a letter to Congress, EPIC, a data privacy advocacy group, provided evidence that Google and Facebook had misled the public, claiming that they had taken measures to ensure data privacy protocols were being followed. The truth was much more alarming: not only had Google and Facebook not taken such measures, but they were willingly selling user data to third party apps, presumably for advertising revenue. While there may not have been fines, Facebook has been saddled under the weight of negative press coverage this year that is unlikely to end anytime soon.

Well that’s all very well for Facebook and Google, you may be thinking. I’m a marketer who wants to be Facebook and Google. If the worst that can happen is some bad press and no consequences by federal regulators, then I don’t have anything to worry about, right?

Not necessarily. Earlier this year, GDPR went into effect, which intends to protect the data of EU citizens regardless of where they live. This can impact U.S. businesses in the following two ways: one, EU citizens who live in the U.S. and Canada are protected by these regulations. Secondly, as a business expands and seeks a larger customer base, it makes sense that a company may look to Europe to sell their products and services. (DMN helpfully published an eBook about the GDPR, which is available here.) So even if American laws and regulations don’t yet exist or are inconsistently applied, U.S. businesses are still subject to EU regulations. And the consequences carry weight: fines can be as much as 4% of a company’s revenue, or 20 million euros, whichever is greater.

It is important to keep in mind that as a business grows, credibility and perception are paramount. Clever PR campaigns are expensive, time consuming, and are not magic wands. Once a business’s reputation has suffered, it can be difficult to recover, and a customer base that took years to build may be lost to a competitor. There are incentives to play by the rules, even if the rules are still being developed.

Finally, as technology continues to develop, companies have the advantage of innovating a data privacy infrastructure by taking the initiative on their own. By integrating responsible data practices into their business models, they will be ahead of the competition by the time data privacy regulations play a  greater role in business.        

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