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Trends Driving Digital in the Future: Customer Privacy (Thinks Out Loud Episode 354)

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Trends Driving Digital in the Future: Customer Privacy (Thinks Out Loud Episode 354)

There is probably no bigger trend driving digital in the future than the need to focus on customer privacy. Big shifts in government regulation and actions by major tech platforms like Google and Apple have suddenly caused marketers and business leaders alike to recognize that we’re living in an entirely new world. Despite the challenges these changes introduce, this is are a good thing, truly.

Marketers, product managers, and technologists alike will need to adopt new approaches to connect with customers while having less access to customer data. Again, that’s a good thing. You can do this. The tools and techniques exist to provide great customer experiences while also respecting customer privacy.

How can you do this? How can you put these tools and techniques to work for your business? And how can you connect with customers in a privacy-first world? This episode of Thinks Out Loud takes a look.

Want to learn more? Here are the show notes for you:

Trends Driving Digital in the Future: Customer Privacy — Relevant Links and Show Notes

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Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil PR-40 Dynamic Studio Recording Mic and a Focusrite Scarlett 4i4 (3rd Gen) USB Audio Interface into Logic Pro X for the Mac.

Running time: 23m 42s

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Transcript: Trends Driving Digital in the Future: Customer Privacy

Well, hello again, everyone, and welcome back to , your source for all the digital expertise your business needs. My name is Tim Peter. This is episode 354 of the big show. Thank you so much, as ever, for tuning in. I think we’ve got a really cool show for you.

I’ve been talking the last couple of weeks about how you plan for going forward and how you budget and how you build a business case for your digital initiatives. I think as part of that, it’s really important to talk about the trends that are going to drive those business cases that you’re building over the next year, and so for our next batch of episodes, I really want to focus on trends that will likely shape your business and particularly your digital business over the course of the next six, 12, 18 months.

Privacy May Be the Single Biggest Trend Driving Digital

I think there is one trend that outstrips them all, and you’ve probably been paying attention to this already, but if you haven’t, we really do need to talk about it, and that is privacy. That is the impact of the current state of privacy on your business and on your digital marketing specifically. Now, we know this is a big deal. If you look at A, headlines, I mean, first of all, it’s everywhere. People are talking about privacy and how much customers are starting to care about privacy. We see it in Google search data. If you do a search for the keyword privacy in your favorite keyword research tool, you’ll see things around privacy policy, of course, and privacy laws, of course, but also, Facebook and Google and iPhone, and "How do I change my privacy settings?" is a super common question for Facebook, for Mac, for Google, for Twitter, for Xbox, for TikTok. Customers care about this a lot.

Now, I mentioned the headlines a moment ago. This is a huge, huge topic. There was an article on HubSpot the other day from their CMO about how marketers should deal with privacy going forward. Google has announced the end of third-party cookies in 2023 and it will no longer allow third-party cookies. Obviously, we’re aware of laws like GDPR has been around since 2018. The CCPA has been around since 2020. That’s the California Consumer Privacy Act. It was updated to the CPRA, the California Privacy Regulations Act in 2021.

Apple has had ITP since 2017. They’ve updated a couple of times and they turned it into app-tracking transparency about a year ago, which of course, has had enormous effects on people like Facebook. Facebook has said that app-tracking transparency, that’s that thing if you have an iPhone where it asks you if you want to let an app collect your data, that’s been around since late last year, excuse me, and Facebook has said that’s going cost them about $10 billion, billion with a "B" in this fiscal year alone, so this is a huge deal.

Will 3rd-Party Cookies Really Go Away?

Now, it’s possible that some of these things may not be as big as you might think. Google, for instance, has delayed its elimination of third-party cookies once already it originally was supposed to go into effect in 2022, and now it’s going to go into effect in 2023. But let’s say that they want to do that again. Let’s say they say, "You know what? We were kidding. It’s not going to be 2023, it’s going to be 2024." A, is that a thing you want to bank on? And B, even if they do, you’re going to have to deal with it eventually, anyway. This is coming and it’s coming for a reason. I mentioned this in an episode a bunch of years ago called the lessons learned from GDPR.

This is marketers’ fault. When I say "marketers," I include me in this. This is our fault. We did this. I don’t mean you. I mean the other marketers, the bad marketers, the folks who spam people, the folks who collect private information because they can not because they’re actually trying to do good things for customers, the folks who intrude at every opportunity, so that sucks. That’s a drag, but marketers did this to customers, and now customers are saying, "I don’t want to deal with this anymore. I want to be able to be anonymous when I do certain things online and when I do certain things in my day-to-day life."

Your Customers’ Privacy Matters

I don’t want to go too far down this rabbit hole because it’s way off-topic for me, but given recent Supreme Court rulings here in the United States, I think you’re going to see more customers, particularly here in America, start to say, "I’m not real comfortable with anybody having too much data about me because I don’t know how it’s going to be used in the long run," so this is a real thing, this is happening, and it’s something we need to be thinking about, and not only do we need to think about it, we need to act on it.

Marketing in a Privacy-First World Isn’t a Disaster

Now, one way to look at this is to say that it’s not that bad. I realize that may seem a little Pollyanna-ish, but marketing existed long before we had access to data. Even on the web, marketing to customers didn’t require knowing everything about your customer for a long time. I have said for years that content is king customer, experience is queen, and data is the crown jewels, but that doesn’t mean we have to have every piece of data. It doesn’t mean that we have to have every last piece of information about every aspect of our customer’s lives. It means that we have to be smart about the data that we collect and use it in an appropriate way and I’m going to talk more about that in just a second.

One of the reasons I think it’s not that bad is even with the data that we’ve had. We’ve often struggled to know who we’re talking to. SoloSegment data, my friends at SoloSegment, they’re a sponsor of the show, I will talk more about them a little later, but SoloSegment suggest that B2B marketers can usually only identify about 5% of traffic to their websites, especially when you consider people working from home and the like my. Experience on the B2C side shows that we rarely can identify more than about half of all people, so you don’t always have as much data as you "would like to have."

Of course, as Douglas Hubbard says in the brilliant book, "How to Measure Anything: Finding the Value of Intangibles in Business," which you’ve heard me reference many times on this show, you have more data than you think you do, and you need less data than you think you do. We know that you can use artificial intelligence to identify patterns in data, not that identify the individual, but that identify their behaviors and whether those behaviors are predictive. This is one of the ways that you can go ahead and make this work to your advantage right now.

How You Can Manage in a Privacy-First World

Normally, I wait till the end to talk about what do you do about it, but let me talk about some of the reasons you want to do something about it right now, or how you can.

Adopt a Privacy-First Focus. As with all things, the first step is admitting that there is an issue here and that you need to be ready for it. The second is you need to put more focus on first-party data and especially data that the customer has said it’s okay for you to have. By that, I don’t mean one of those little privacy popups that says, "Oh, we collect this data. Click here if you want to use our site." Yeah, you can do that, but even the EU has realized with GDPR that it’s not working as intended and they may need to rethink the way it works to better actually protect people’s privacy, so I wouldn’t bank on that being the likely outcome anytime soon. I think it’s more a case of saying, what data can we ask customers for in exchange for something of value and use that data appropriately?

Learn from Behavioral Data. We also can look at, and this is really key, this is where I was going a moment ago, we can look at behavioral-based data. I don’t have to care who you are. I care what you do. If somebody is on my website or if they’re interacting with my app and I’m tracking behaviors, not people, not their IP address, not some fingerprint that identifies that specific user, but a set of behavioral patterns that lead people to be likely to click or lead people, to be likely to engage, or most importantly, lead people to be likely to buy, that’s really valuable, that’s really powerful, and that’s data I want to pay attention to a lot.

Test Artificial Intelligence and Machine Learning-Based Tools. And that’s data that AI can absolutely take a look at and identify those patterns and say, "Yep, this is something that we should be paying attention to. Maybe we help this customer move towards a purchase."

These tools exist today. I mentioned my friends at SoloSegment. Obviously, Adobe’s doing great work here. Obviously, plenty of others are as well. I don’t want to leave anybody out, but it’s something where you should be looking to your vendors, your CMS vendor, your ad platform vendors, and saying, "What are you doing about behavioral data? Are you using machine learning and AI tools? Not that it’s critical they do it that way, but what are they doing to identify patterns and behavioral data to drive customers towards a purchase?"

Segment Appropriately. You also should be thinking in terms of not just personalization, but personas. What sorts of people come to the site? Again, behavioral-based personas. What is it that our customers want? Look at your site search data. Look at the search terms that bring people to your website and how can you use that data to create the kinds of content and the kinds of experiences that matter to your customers so that they are more inclined to buy from you, more inclined to engage with you, more inclined to share information with you that helps you provide a great customer experience.

A Helpful Privacy Thought Exercise

There’s a little quiz I give students of mine at Rutgers Business School, Exec Ed, about how we think about data, so if you don’t mind, I’m going to do this with you right now. I’m going to ask you to just close your eyes for a second. Unless you’re driving, don’t close your eyes, but just play along for a second.

I’m going to give you the same scenario three times and I’m going to take it for granted you all like margaritas, right? I’m going to assume you’re traveling with your favorite traveling companion and you’ve gone to a resort and upon check-in at the resort you have opted in. You’ve been asked if it is okay if you are sent alerts while you’re on property from the resort and that they can use location-based tracking while you’re on property at the resort and you’ve said yes to this, okay? It’s okay. I realize not everybody’s going to say yes to this, but I want you to assume that’s what you’ve done in each case. You’ve said yes that you want to see receive alerts on property and it’s okay if they know your location when you’re on property and they’ve told you why you want that and you’ll see why in a second.

Your second day there, you and your traveling companion go down to the pool and you get a little popup on your phone that says, "Hey, we’re having two-for-one frozen drink specials right now. Tap here and a server will come and take your order." Now, remember, you’ve opted into this. You’ve said, "Yep. Send me alerts. Yep, you can know where I am," so I want you to think, is that a good experience or is that a bad experience? I would expect most people are going to say, it’s a good experience. Obviously, some people are going to say, "Whoa, whoa, whoa. I didn’t realize that’s what they could do, and maybe I want to opt-out of that now." But generally speaking, they’re saying, "Yep, I have, I’m having an okay experience because they’re using this data in a way that helps me."

Okay, the second version of this, again, you’ve opted in. Same scenario, you go down to the pool with your favorite traveling companion, you get a little popup on your screen that says "We’re having two-for-one drink specials on margaritas. Tap here and a server will bring them to you." Again, probably most people when I conduct this experiment in class say, "Yeah, that’s pretty cool. I like that." Again, some people are like, "I don’t know about that. It’s a little creepy," and that’s okay, because the creepy line, our customers get to say where the creepy line is. That is very normal.

The third version of this scenario is you go down to the pool with your favorite traveling companion, a little popup comes up on your screen and it says, "Hey, we noticed you and your traveling companion each had seven margaritas last night. Tap here. We’ll bring you some Bloody Marys to start your day off right." Now, if you’re like most people, most of the time people find that a little creepy, or more than a little creepy. Sometimes there’s one person or two people who are like, "I don’t know, man, Bloody Mary sounds like a good idea, because contextually, that’s actually super helpful if I’ve actually had seven margaritas the night before." Again, the customer gets to decide where the creepy line is, and that’s okay.

The thing I want you to be aware is each of those three experiences come from the same data. We know the same stuff theoretically, if the customer has opted in, but in the last one, we are showing off everything we could possibly know, and in the first two, we’re simply trying to create a better experience for the customer, and who are we kidding, maybe sell a frozen drink, but the idea being we know stuff about the customer, but are using it in a way to be helpful. The customer has opted in to share the data and we are saying, "Okay, how can we use that data to create a better experience?"

Think "Big Mother" Not "Big Brother"

Julie Ask of Forrester Research refers to this as "thinking like Big Mother, not like Big Brother," and that’s something you very much want to do as we think about privacy, "Am I collecting this data because I can, or am I collecting this data because I actually am going to do something useful with it to help my customer?" One of those is okay, one of them not so much.

Does the Shift to Privacy Make Gatekeepers More Powerful?

Now, the last reason this becomes important is you’ve heard me talk many times about the AGFAM, Apple, Google, Facebook, Amazon, Microsoft, and as we move into a privacy-first world, this sets up lots of opportunities for the AGFAM, for the AGFAM to be gatekeepers, and as we know, as we’ve talked about many times, gatekeepers gonna gate. They have the data, they have the machine-learning tools. They know what’s happening here.

More importantly, they’re telling us that they’re going to do this. Cheryl Sandberg, in Facebook’s Q1 earnings call, talked about the fact that they’re going to have to do more with less data because that’s the way the world is trending, but they know they’ve got a lot of data to do it. Various Google execs in their Marketing Live keynote said the same thing that machine learning, the single biggest use case for machine learning at Google right now, is in advertising. This is core to what they’re doing. They’re doing this, not just to be gatekeepers, they’re doing it because they know it’s necessary. I mean, don’t get me wrong. It’s a fortunate side effect for them that they get to be gatekeepers, but that’s not why they’re doing it.

In particular, I think about what Google knows. I mentioned the search terms earlier today. Well, Google gets 5.6 billion, billion with a "B" searches every day. That’s 3.8 million searches a minute. They’re as likely as anyone to know what customers care about. People come and tell them every day. If you and I can see the keyword data, do you really think Google isn’t paying attention to what customers are asking about? They know that this is coming, and so they’re really focusing on this, so it’s increasingly important that you pay attention to first-party data, that you commit to thinking privacy first, that you use behavioral-based data to understand what customers do, not who they are, and make the investments in AI and machine learning to take the data you have and put it to work to create better experiences for your customers so that they’ll be more willing to share data with you that allows you to create ever-better experiences all along the way.

Trends Driving Digital in the Future: Customer Privacy Conclusion

This is something that is happening regardless of whether you act on it or not. The important part is you act on it today and build the business case for it today so that you can take care of your customers in a way that respects their privacy, but also in a way that helps grow your business in the long run, too.

Show Credits

Now, looking at the clock on the wall, we are out of time for this week. As ever, I want to remind you that you can find the show notes for today’s episode, as well as an archive of all past episodes by going to timpeter.com/podcast. Again, that’s timpeter.com/podcast. Just look for episode 354.

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Sponsor Message: SoloSegment

I know I mentioned them earlier in the show, but I’d like to take a quick moment to give a shout-out to our sponsor. is brought to you by SoloSegment. SoloSegment provides search as a service to help customers of large enterprises find the content they need. SoloSegment powers your search results with a focus on business results to help your customers find content that matters to them and directs them towards business results for you. SoloSegment does this using artificial intelligence, machine learning, and natural language processing, and a whole host of other really cool tech, all while protecting customer privacy and driving business results for you. You can learn more about SoloSegment and all the wonderful work that they do by going to solosegment.com. Again, that’s solosegment.com.

Show Outro

Finally, I want to say thank you so much for tuning in. I know I say it just about every week, but it means more to me than I can ever find the words to say that you take a little bit of your time out of your valuable day, out of your valuable week, out of your valuable life to listen to the show, so thank you so much for tuning in. I hope you have a great rest of the week, I hope you have a wonderful holiday weekend, and I will look forward to speaking with you here on next time. Until then, please be safe, be well, and as always, take care, everybody.

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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