Can you buy someone a gift or even start a conversation with a topic that interests them if you know little to nothing about them? Not reliably, no. The same goes for providing your customers with personalized offers and experiences, as well as upselling and cross-selling. You need information, but there’s a limit to how much information you’re allowed to get.

People are concerned with their privacy. Sure, they want the personalized experience, but not when it comes at the expense of sharing too much sensitive information. If you ask them how much personalization they want – all of it. However, they might become incredibly hesitant if you ask them how much personal info they want to share.

This means you’re walking a thin line between consumer privacy and necessary customer data. Here’s how consumer privacy laws and regulations impact personalized marketing and a few tips on how this can impact personalized marketing.

1. Understanding Consumer Privacy

Consumers can decide how businesses and organizations collect, keep, and utilize their data. Just because most people randomly accept terms and conditions or immediately click “Allow all” when asked about the cookies’ permission doesn’t mean their consent wasn’t sought.

In the digital era, all your information is out there. Your device has personal photos, browser history, payment data, credit cards, cryptocurrency wallets, and more. All of this info needs to be kept safe at all costs.

Sure, some information, like browsing habits, may be useful for personalizing marketing, but it could also be used in synthetic fraud or an account takeover. Sure, a human perpetrator cannot mimic your user behavior, but the same cannot be said about an AI programmed to scroll and move the cursor exactly as you do.

Then again, compliance and regulations insist on privacy laws like GDPR and CCPA. This means that, as a business, you don’t have a choice. You either comply, pay a huge fine, or restrict your organization from a certain area.

The most important thing to remember is that while GDPR applies to the EU, it doesn’t mean that your business has to be from the EU. It’s enough that some of your clients are there, and you automatically fall under their jurisdiction (at least partially).  

2. The Evolution of Personalized Marketing

The one-on-one marketing no longer needs to be done in person. With enough information, a business can craft a message where they:

  • Address you by your name
  • Offer you an item that you’re interested in (you’ve already looked at)
  • Adjust the offer to abide by your behavioral triggers

Remember that this approach can be used for a huge audience simultaneously due to the data’s availability and sophisticated algorithms. In other words, because it no longer takes as much time and workforce, personalized marketing is more viable than ever. This evolution is bound to carry on into the future, as well.

Just remember that personalized marketing relies on data, but you must ensure that you consent to collect and use this data.

There’s also the concept of data minimization, which is essential but incredibly difficult to pull off in practice. Namely, while you want as much data as possible, the risk is greater with more data in your possession. You’re a bigger target, and a potential breach is even bigger. This is why you want to avoid excessive data collection and storage. This means balancing what you need and what you believe you need.

3. How do Consumer Privacy Laws Affect Personalization Marketing?

You must consult and abide by privacy laws to do personalized marketing by the books. First of all, you want to acquire explicit consent from individuals. If they have to be informed on the subject matter (to make an informed consent), this might dictate the method through which you’ll inform them.

There are also data usage limitations, meaning marketers need to know which data they can use. This will limit the campaign scope and even put you in a position where you have a harder time finding the right strategy.

Sometimes, the consumers may ask you to delete data you’ve gathered about them. This must be done promptly, which may further affect your marketing campaign.

As we’ve already mentioned, there are different laws worldwide, and you will often be under more than one jurisdiction. We’ve already given an example of GDPR, which covers everyone, even those just doing business with parties from the EU.

One of the aspects worth addressing here is the cross-border data transfer, which privacy law may also affect.

4. Challenges to Personalized Marketing Amid Privacy Concerns

Many people are increasingly concerned about their privacy, which means obtaining consent is becoming harder and harder. We’ve already mentioned that some just click “Accept” by default, but what if they don’t? It’s your job to inspire trust during those first few moments, which is challenging.

Not all data is to be trusted. Some data is unproven or outdated. Inaccurate data will lead you in the wrong direction and cause many problems. This may frustrate consumers and cause adverse effects.

Another thing you need to understand is that there’s a difference between personalization and intrusiveness. People don’t want you to join the conversation just because you’ve happened to overhear them. Sometimes, making this kind of an offer or a cold opening may have a similar effect.

Another problem is high customer personalization expectations when privacy laws aren’t as strict. In other words, privacy laws are moving in one direction – becoming more restrictive. This means that, in the past, marketers didn’t have to deal with so much red tape, which allowed them to use more of this data.

However, this can be overcome in the simplest manner possible – through the modern use of AI-driven analytical technology. Sure, they had more data but lacked the technology to utilize it fully. So, even though you now have some of these restrictions, you can do a lot more.

5. Strategies for Effective Personalized Marketing in a Privacy-First World

Now, to sum it all up, you need to respect the privacy of your users while simultaneously gathering relevant data. Then, you need to use this data to craft a perfectly personalized message that targets the exact needs of your audience without seeming too intrusive.

Simple enough!

Seriously though, you’ll need to learn how to employ various digital marketing techniques to make a personalized marketing message, and here are a few strategies you should try.

Link Building 

The first thing you want to engage in is link building.

By engaging in link building, you’re actively working on expanding your presence on the internet. The best thing about link building is that it will position your pages so they’re impossible to miss. In other words, your consumers will be sure they found you independently. 

Now, staying compliant in link building is all but easy. After all, double down on your backlinks management and ensure you are not redirecting users to risky pages (which illegally collect data or violate privacy rules). Managing backlinks for privacy compliance involves identifying all backlinks on your site and scrutinizing them to ensure they align with relevant privacy laws. Use automated tools or manual checks to evaluate the linked sites, adhering to a backlink policy that reflects legal and ethical privacy standards. Regular monitoring and auditing are essential, and non-compliant backlinks must be promptly removed.

Contextual Marketing 

People are accustomed to convenience, so they won’t ask too many questions when recommending a nearby business or something related to their previously searched items. In the eyes of the majority of consumers, this is just an incredibly sophisticated algorithm following the threads to deliver exactly what they want.

Contextual marketing can rely on anything:

  • Time of day (they’re more likely to look up melatonin late in the evening)
  • Weather (consumers are more likely to look to specific clothing based on the weather)
  • Social media interactions (especially interactions with brands)
  • Location (local businesses are always a priority)
  • Search queries (customized content that continues on their previous query is always a good idea)

However, all of this must stay compliant with the existing privacy laws and be derived from data you’re legally allowed access to.

Federated Learning of Cohorts (FLoC)

In the end, FLoC is a crossover between traditional and personalized marketing. Instead of targeting individuals, these individuals are grouped into cohorts (usually local cohorts). This way, while advertisers have the user data, they do not have individual user data.

People find safety in numbers, and FLoC is not an exception to this rule.

The problem is that this solution still isn’t perfect. It’s a vessel that still doesn’t fully address various privacy concerns, and its developers have difficulty explaining how this is essentially different from the traditional individual approach. The problem lies in the compliance surrounding the gathering and use of personal data. Even in FLoC, you still need to gather and use this data. Essentially, the level of anonymity is not nearly as high as you expected it to be.

Wrap Up

Ultimately, you’re obliged by law to make consumer privacy your top priority. Even if you didn’t have to, it would be a smart thing to do since brands rise and fall based on user trust. While the line between personalization and privacy is thin and blurry, it’s the line you’ll have to walk if you intend to stay competitive.