And the Rise of First Party Customer Data…
“Surveillance capitalism’s actual customers are the enterprises that trade in its markets for future behavior.”1
Being generous, the motive for organisations like Google and Facebook covertly capturing and analysing our behavioural data as we navigated the web, was to improve the experience offered to customers by increasing relevance and convenience. After all, the data they captured was of no direct use or interest to the customers themselves, they are a “Data Exhaust” of using the web.
Over time, this data exhaust has delivered a ‘behavioural surplus’ that the big platforms use to develop prediction markets/products that they sell to advertisers. For large amounts of money.
There has been a marked increase in customer awareness that their data is being used to track and manipulate them, without their permission or knowledge and at great profit for the large network providers such as Facebook and Google.
Privacy advocates have been behind these recent developments;
- General Data Protection Regulation, passed in Europe introduced more transparency and user rights into the gathering of personal data.
- Google announced it would effectively remove the use of third-party cookies to track user movements around the web (which may help their search business but makes targeting by others more difficult). This move was recently delayed until 2023.
- Regulation granting customers control of their data held by service providers, Consumer Data Rights, has added a further level of self-determination for customers.
- The Irish Council for Civil Liberties has taken the Surveillance Capitalism industry to court, claiming it is responsible for the largest data breach ever, a direct challenge to the business of auctioning purloined customer data to the highest bidder.
“15 June 2021. Dublin. Online advertising causes the world’s biggest data breach. Irish Council for Civil Liberties (ICCL) is going to court in Germany to stop it.
ICCL’s lawsuit takes aim at Google, Facebook, Amazon, Twitter, Verizon, AT&T, and the entire online advertising and tracking industry, by challenging industry rules.
Included in hundreds of pages of evidence is the industry rulebook for building secret dossiers about every person. These dossiers can include your mental health conditions, financial situation, and even whether your child has special needs.
The private things we do online are collected from a vast online advertising system that operates behind the scenes on virtually every website and app. This online advertising system, called “Real-Time Bidding” (RTB), is a central target of ICCL’s lawsuit.
RTB broadcasts personal data about us to thousands of companies. Though RTB data can contain very sensitive information, industry documents also confirm that there are no technical measures to limit what companies can do with this information, nor who they pass it on to.”
Into this already changing data world, Apple has made customer privacy a key part of its customer value proposition. The changes with disruptive impact;
- iOs 14.5 gives Apple customers the overt choice to prevent apps from tracking their browsing behaviour and early results show 96% of customers are declining to be tracked. Not good for the collectors of data exhaust who want to sell targeted advertising based on browsing history. We understand Android 12 also allows customers to turn off this tracking.
- It was announced last week that iOs15 will block the tracking pixel that marketers use to track email opens. Likely released in September 2021. You read correctly, no more tracking open rates in emails going to apple mail.
- Apple will also offer a service called ‘Hide My Email’ that translates between fake email addresses customers can use to sign up with vendors and the customers’ actual email address. The customer still gets the mail; the sender never knows the true address.
Thoughts & Reactions
Our initial thought is that our industry, customer marketing, may experience a change of diet – from the sugar hit of open rates to the high protein of sales attribution and profitability tracking. We hope there is not a big investment made in circumvention technology so we can go back to the sugar, open rates never actually paid the bills anyway.
But then it occurred to us; How much more valuable is your own customer data when it becomes harder to bulk-source data exhaust predictions on the open market?
- You can control its quality and richness directly.
- You (should) have explicit permission to use it for your customers and with some marketing discipline you can directly attribute returns to investments. If they trust you, they are probably more likely to give you their actual email address, as opposed to hiding it using ‘hide my email’.
- The loyalty program you probably used to gather the data generates increases in CLTV, and it may be possible to ratchet the value exchange up a notch to gain even more insights and engagement and advocacy from your customers.
We do know these changes will spark an explosion of demand for Privacy Compliant ways of sharing data between organisations, as an alternative to tracking. We will see Collaborative Commerce come into its own. The biggest beneficiaries of such data sharing will be organisations that have permission to curate third party offers for their customers, and good partners to provide the offers.
1. Zuboff, Shoshana. “The Age of Surveillance Capitalism” 2019 We heartily recommend this book to any reader interested in the issues of privacy and influencing customer behaviour by the platform vendors.