It's time for advertisers to leave the wild west of data. Here's why

In the ongoing dialogue surrounding the issue of consumer privacy, one constant has emerged: Consumers today are more willing to trade their personal data for services, incentives and rewards that provide them with value. Why, then, do we continue to see consumer backlash in both traditional and social media against perceived misuses of personal data?

The answer is simple. While consumers are theoretically willing to trade data for value, their willingness evaporates when either of the two pillars that support this trade-off, transparency and security, collapses. Without assurance that personal data is safe and being used in ways that are clear to the consumer, all trust disintegrates.

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Although some have argued that consumers should accept that privacy is a “lost cause,” the culture shift required for this to take place would need to be massive. For the foreseeable future it will be advertisers’ responsibility to prove their trustworthiness by ensuring transparency and security in every data transaction.

This article will focus on what marketers can do right now to build consumer trust in tandem with customer ROI by focusing on the key elements of transparency and security.

Establishing transparency

To establish transparency we need to make the following clear to the consumer: a) how their data is being used and b) who has access to it.

While cookie-based opt-in systems are a good start toward giving consumers an idea of the ways that their data is being repurposed, they are too easily disabled and fail to inform the consumer on an ongoing basis. Consumers want constant and consistent insight into how their data is being used and who has access to it.

To address the concern that personally identifiable information (PII) can be shared with anyone, marketers should begin to move away from buying first- or second-party data from, or selling it to, large data aggregators. These aggregators create consumer profiles that are frequently inaccurate, leading to poor targeting that provides neither the consumer nor the advertiser with value.

Instead, marketers should focus on ways to utilize their first-hand knowledge of customer behavior and needs that stems from direct and transparent interactions, rather than third-party exchanges. This will limit the potential for abuse, boost relevancy and the likelihood that targeted consumers will be receptive to messages.

Ensuring security

Establishing security starts with securing your platform and extends to minimizing the number of third parties with whom you share your data.

When customers trust you with their PII, it is critical that you do everything possible to minimize the risks associated with its storage and use. This means that beyond standard security protocols associated with storage and transmission, the use of third parties — partners or aggregators — should be kept to a minimum.

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While consumers may be aggravated by poorly targeted ads and messages stemming from their data, they will certainly be infuriated by criminal activity that results from mishandling it. Given the technology available today, there are few valid excuses for a large scale breach of sensitive consumer information.

Achieving ROI

Once a secure and transparent relationship has been established, ROI stems from the value provided to customers and the dividends that their trust will pay.

It’s crucial to emphasize the role of trust. When consumers trust that their personal information is not in jeopardy, they will be far more receptive to, and more likely to interact with, targeted messaging. This pays off for advertisers, who see increased conversion rates, and consumers, who receive value from the personally tailored products and deals they are offered.

While the “lost cause” perspective on privacy assumes that customer trust is implicit, it doesn’t account for the fact that trust must be actively maintained separately from privacy. Trust arises not only from the guarantee that personal data will be kept private, but that it will be used in ways that provide the consumer with value.

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No more ‘wild west’

One thing’s for sure, the consumer privacy status quo is unsustainable. It’s time to move from the “wild west” of data, where anything goes, to an arrangement that’s more like the real world, where strong relationships are built on trust and reciprocity.

Recent high-profile incidents underscore the importance of transparency and security as the underpinnings of positive relationships when it comes to personal data. Outcry over warrantless government surveillance shows what can happen when transparency is severely lacking, and the media firestorm that follows every high-profile theft of customer records from a major retailer highlights the importance of security. Both elements are essential.

Asking consumers to simply move past the privacy issue is asking them to write advertisers a blank check that we simply have not earned yet. It’s neither realistic nor in the long-term interests of advertisers, who would be better served by being perceived as trusted providers of value rather than unscrupulous hoarders of personally identifiable data.

Advertisers have a way to go to build consumer trust to an optimal level, but we can start now by incorporating transparency and security into every consumer relationship that involves an exchange of sensitive data. Ultimately, asking consumers for a data hall pass, rather than a blank check, will benefit everyone in the digital advertising ecosystem.

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Rob Heiser is chief executive of Segmint.