The Impact of Data Privacy Regulations On Marketing Technology

Martech has been around for what feels like forever. However, it’s in recent decades that the ‘tech’ half of martech has evolved to warrant an entirely separate category of industry. 

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The rise of martech has been significant. Chief Marketing Technologist lists more than 7000 products in the martech landscape in 2022 and this number is steadily increasing. All of these products rely heavily on personal data collection. It’s fair to say that the industry is not a heavily regulated one, like finance and insurance. However, with the rise of data privacy laws, things are changing and marketing is at the forefront of its impact.

The primary categories of marketing technology:

1. Advertising

2. Content Marketing and Experience

3. Social Media

4. Commerce and Sales enablement (includes CRM tools)

5. Data and Analytics

6. Administration and Productivity

The tools from all these categories are dominantly data-driven and are aimed at giving more and more information and insights for marketers to work with. Teams all over are dependent on data to derive a 360 degree view of a customer profile. 

However, there are two prime marketing technologies that are heavily dependent on user data:

1. Identity resolution: Identity resolution is the process of aggregating and collecting data points on an individual user across platforms and devices. Identity resolution is a key marketing practice as teams use these ‘identifiers’ collected across martech platforms to create true customer journeys and profiles.

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2. Customer Data Platforms: CDPs serve as the central depository of all marketing-related data. It is used for identity resolution and serves as a unified customer database.The data is collected from both internally and externally sources in real time across various touchpoints. This enables creating a database of customer profiles that are both centralised and updated. 

The Changing Landscape Of Marketing Data

There has been a rise of the personal data economy (PDE) where individuals want greater control over the use of their personal information. A recent survey has found that 97% of consumers are somewhat or very concerned about the protection of their personal data. 

However, though conversations surrounding consumer and personal data privacy have gained major ground since 2016, it is only recently that policy has made headway in this regard.

Legal initiatives like EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act  (CCPA) which is soon expected to be modelled in other US states, are aimed at regulating the business use of personal identifying information or PII.

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These laws place limitations on the types of data that marketers and companies are allowed to collect and analyse. They also require explicit consent from consumers to use data for reasons beyond what was initially specified. 

To learn more about these policies and their effect on marketing, read on here. 

Apart from these laws, various companies like Firefox and Apple have also taken steps to limit the access of tools to consumer data. While Firefox now blocks tracking cookies by default, Apple has changed how marketers engage with user data and it doesn't allow them to see insights by device. There has also been a significant rise in the users of search engines like DuckDuckGo whose USP is ensuring customer privacy, with a 65% increase in its traffic. The largest benefactors and users of such data have been the marketing and advertising industries. 

The Impact of Data Privacy on Marketing

On one hand, a lot of martech is dependent on user data. On the other hand,data privacy laws and the limitations that they pose on the collection of user data are on the rise. Resultantly, the impact of these regulations and limitations will hit marketing teams harder than others as they become more ubiquitous. A recent study by Gartner found that 1 out of 5 marketers report privacy compliance as their main strategic concern. Furthermore, 73% of marketers are concerned that privacy regulations will have a negative impact on data and analytics that are used to collect and understand visitor behaviour. This can also make it harder to access consumer insights for personalised marketing. 

Another major impact of increased privacy concerns is the volume and quality of data that marketing has become used to. Marketers are used to leveraging a large quantity of consumer data to create campaigns that target audiences based on intent. However, as privacy concerns become larger and regulations and compliances come into effect, this will impact the volumes of good audience data. This, marketers fear, can lead to their current funnels becoming narrower. 

How do marketers move forward?

Even though data privacy laws make getting granular insights on volumes of data from certain channels difficult, it is definitely not going to be a thing of the past. Good attribution tools and analytics systems can use available data (even at less volumes) to give relevant insights. 

In coming times, quality over quantity will take up a whole new meaning in the martech landscape. Getting a granular understanding of consumer journeys will depend more on first party data and technology that makes use of less data to give more insights. Marketing teams will have to focus on finding the right tools and analytics solutions that are compliant with regulations and respectful of consumer data.