How the Personal Data Economy benefits marketers from targeting advertising
Apple’s recent privacy policy is a nightmare for marketers as only 24% of iOS users opt-in app tracking. Less data of consumers means to do advertising will cause targeting advertising inefficiency and ineffective.
After the Cambridge Analytica scandal, led to a wave of privacy regulation, more than half of the global population will implement local privacy regulations in line with the GDPR by 2022, is also another threat for targeting advertising because it will be more expensive to acquire data.
On top of that, personal privacy concerns cause negative sentiment toward online advertising that impact the whole industry of digital marketing as the data shows that 42.7% of internet users worldwide use ad blocking tools right now.
Marketers often claim that targeting advertising benefits the consumers because consumers see the relevant advertising that matches their profile and interest is better than irrelevant advertising, in the fact that advertising revenue is the main source of income for many online businesses to maintain their free services.
However, more demand from both regulation and consumers for a reform of digital advertising. Among those movements, the personal data economy is proposed which is likely to benefit the markets from the coming privacy protection trend. The proposal is that consumers should be able to share and sell their data to marketers directly. This will align mutual benefit together for both consumers and marketers.
For example, insurance companies pay targeted audiences of car owners for advertising directly to them in exchange for access to their data. In addition, consumers will benefit more if they can share their driving behavior to the insurance company.
Firstly, there will be a mutual trust between marketers and consumers as consumers are the one to consent more data to marketers to do target advertising to their profile or interest directly, which, of course, comply with all privacy regulation. Secondly, marketers can access richer data of their targeted audiences and can create highly personalized advertising which will convert to more success cases or better return on investment for their advertisements. Finally, marketers can acquire broader their targeted audiences efficiently as more consumers are willing to share their data to the marketers as they will benefit from their shared data.
Moreover, there will be more access to data that is not available on conventional targeted advertising such as financial data, as it is perceived as sensitive data. For example, if marketers can target advertising directly to credit card holders or previous spending behavior, it implies more conversion rate and better efficiency of the advertisement.
In the future of the privacy and data ownership trend, the cost of marketers to acquire the target audience’s data from data brokers will be more expensive while the cost to buy data from the targeted audiences directly will be cheaper, because individuals will be more and more able to request their data from data providers to their own personal data storage. Therefore, the personal data economy seems to benefit marketers more than the current status quo and allow marketers to ride along with the trend of privacy and data ownership.
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