The Future Of Permission-Based Advertising And Data Ownership In Today’s Digital Landscape
This article originally appeared on Forbes and was authored by CEO of Prosper Business Development, Gary Drenik. Click Here to view the full article.
Charlie Silver, CEO of Permission.io, the leading provider of permission-based advertising, discusses the evolving landscape of the digital advertising industry amidst global changes in privacy regulations and shifting consumer sentiment towards data ownership. The interview discusses how a consent-based model will pave the way for the industry and offer value exchange for both parties.
Prosper Insights & Analytics has been a privacy advocate for the past 20 years. We have anonymously monitored consumer attitudes towards digital privacy for years, including ad targeting via our monthly surveys. Our commitment to privacy is so strong we even began creating privacy-compliant audiences with Acxiom then LiveRamp as far back as 2012. Prosper has now made its audience models available on AWS Marketplace.
Gary Drenik: In light of how consumers feel about privacy today and the various governmental regulations now existing, what challenges are marketers facing today?
Charlie Silver: Nowadays, consumers are much more conscious of how their data is being used. They’re increasingly interested in how marketers are collecting their data, how they are sharing it, and who with. Over time, consumers have become more distrusting — they are beginning to realize how little control they have over their data and how much big tech has profited off the exploitation of their information for years.
As a result of this, marketers today are struggling to gain back consumers’ trust and consumers are trying to opt out of tracking wherever possible. This is obviously limiting the amount of data available to marketers and causing them to seek alternative ways of engagement and monitoring to collect valuable first-party data. Data is the most valuable commodity of all in the modern economy. Realistically, true opt-outs aren’t possible. Data comes from everywhere, everyone is selling it — state governments, phone companies, car companies, and of course social media companies and wider big tech. If someone wants to live a relatively normal life, they can’t opt out of their data being sold. So, we see this as more of an ownership issue, more so than a privacy one, because at this point online privacy isn’t particularly realistic. If data is going to be used, permission should be granted for it, and value should be offered in exchange.
Drenik: What is permission-based marketing vs. interruption marketing and how do these different strategies impact brands/consumers?
Silver: The problems with many interruption marketing strategies are that they are not personalized, don’t speak to the majority of the audiences, and ultimately become a nuisance, leading marketers to lose funds and ROI for campaigns run. Even when interruption marketing is targeted rather than general, issues may still arise — some users become distrustful because advertisers seem to almost “know too much” about them. So, users have been fighting back against all advertisements by installing ad blockers or shifting to privacy-focused browsers (which, as we’ve found, aren’t always optimized or even honest). In a recent Prosper Insights & Analytics Survey, research found that users are trying to take action to protect their online privacy with 32% of GenZs and 30% of Millennials turning off mobile trackers.
Prosper — Turn Off Mobile Tracking. PROSPER INSIGHTS & ANALYTICS
With mounting consumer expectations and recent regulatory frameworks (privacy laws such as CCPA, GDPR, and beyond), advertisers are being forced to switch to a consent-based model, essentially being made to ask permission, which leads us to permission-based advertising. This is a model designed to obtain consent from the consumer for their engagement in exchange for the sharing of their time and data and ideally, offer a form of reward for that data — in our case, our cryptocurrency ASK.
Drenik: What opportunities lay in a permission-based marketing strategy for brands?
Silver: The biggest opportunities for brands today are in building trust and integrity into their data models. With shifting consumer demands and increased consumer awareness, brands can now show that they respect consumers’ data ownership. Using these strategies, businesses can build longer-lasting relationships that drive value for both parties by issuing rewards and embarking on a permission-based marketing journey. Consumers feel respected and humanized — the commodification of personal data has done a number on that. But building back can happen — brands just need to respect their consumers as real humans who deserve to own their information.
On a different note, the upcoming elimination of third-party cookies, which has been slowly deprecated over the years as it is, has the industry seeking alternatives that offer value while still complying with new privacy regulations. By asking permission, advertisers are able to collect first-party data, which is volunteered, and thus compliant with global legislation including CCPA and GDPR.
Drenik: How do brands increase ROI when ad blockers and click fraud are prevalent?
Silver: True, brands are getting squeezed at both ends right now: rampant click fraud is eating away at large portions of ad budgets, while consumers are increasingly deploying ad blockers, making it harder to get real engagement. It is becoming increasingly clear that the traditional marketing tactics employed under Web 2.0 are dying.
The first thing that brands can do is ensure that whatever ad or engagement platform that they work with provides identity verification. Trying to identify ‘invalid clicks’ on the code level is a road you don’t want to go down. It’s costly, laborious, and potentially impossible. Verification must be done on the individual level first to ensure engagement is genuine.
Second, the rise of ad blockers is a sign that people are overwhelmed with communications.
Consumers are sending a clear message that the information inherent in most advertising communication isn’t enough for them to pay attention to. It doesn’t provide enough value for them — it’s a nuisance and they want it gone. For brands, that means additional incentives are required to gain their attention (or action).
The solution here is rewarding them. You absolutely have to give consumers something of value just for them to consider indulging in your communication. Consumers’ data is being bought and sold, then used to try to sell them stuff — so it makes sense that they should get a little money back to use on these potential purchases, right?
At Permission.io, we address both issues directly by providing a platform where consumers can own their own data. We verify users’ identity and offer our ASK cryptocurrency as a reward to members who choose to share their first-party data with brands and engage with ads.
Drenik: Where do you see the monetization of consumer data headed and how is blockchain technology playing a role?
Silver: Blockchain technology is one of the best mechanisms for issuing digital rewards in the form of cryptocurrency. Cryptocurrency is an attractive reward for consumers — research has indicated that 64% of American adults and an even higher percentage of younger generations, up to 90%, are interested in owning cryptocurrency. It’s liquid and global, which makes it much easier for brands to utilize than individual national currencies for a network of worldwide audiences. With regard to the direction of the monetization of consumer data, we really see it moving to a permission-based path. People are feeling powerless and used, so monetization necessarily needs to move in a direction that acknowledges these things and treats people like people, allowing them to own their data.
Drenik: What do you envision for the future of data ownership from a consumer and brand perspective?
Data is property, and property is valuable. Trust and integrity are inevitable necessities — the industry is at its boiling point, with 94% of consumers choosing opt-out options with the launch of iOS 14. Consumers will only continue to protest against invasive and detrimental modes of advertising unless incentives are offered for them to act otherwise. Once this fact is fully realized within the industry, individuals will be in control and ultimately be their own platforms. Brands will have to adapt and realize that the control has been put back into the hands of the consumer.
Thanks, Charlie for your insight on the future of permission advertising. We’re looking forward to seeing what comes next from Permission.io and how the industry continues to evolve!