Why data ethics in marketing is important and what to do about it
Considering the marketing timeline, data ethics is still a relatively new concept. Broadly speaking, marketing data ethics refers to the ethical considerations that need to be taken into account when collecting, using, and sharing data. This can include everything from ensuring that data is collected fairly and responsibly to protecting people’s privacy to being transparent about how you use data.
There are many reasons data ethics in marketing has gained attention over the past decade.
First, the amount of data companies collect has exploded. This has led to concerns about how this data is being used and its implications for consumers’ privacy and society at large.
Second, data analytics in marketing has become more sophisticated, making it possible to target consumers in very narrow and specific ways. This has led to concerns about whether companies are using this data ethically.
Finally, the number of high-profile data breaches has raised awareness of the potential risks associated with data collection and storage. A look at the World’s Biggest Data Breaches and Hacks published by ‘Information is beautiful’ not only gives us a nice visual but also gives a wake-up call for any marketer.
Fast forward >>
- Benefits of data ethics in marketing
- Ethical data questions
4 benefits of data ethics in marketing
1. It should be about your customer first
In marketing, the user should always come first. Customer centricity describes a business model that puts the customer first—sometimes at odds with the short-term profitability of investors. In other words, a data ethics approach to digital marketing puts the user’s needs and interests above all else, ensuring that they’re always treated fairly and with respect.
When businesses are customer-centric, they’re constantly trying to understand what their customers want and need—and this should include how they collect, store, use, and share their data, which builds strong relationships with them and ultimately increases sales and profits.
2. It builds trust
It’s not only the morally right thing to do—it’s often a legal obligation. A data ethics approach builds trust with users, as they know that their best interests are always being taken into account. Trust is the foundation of any relationship and one of the most important aspects of marketing. Furthermore, every action taken toward stronger data ethics is another step toward legal risk mitigation.
You can develop trust through honesty and transparency in all your marketing communications—and this should include how you intend to use the data collected about your customers. Being honest, transparent, providing control, and delivering on your promises will create long-lasting relationships with your customers.
3. It’s good for business
A data ethics approach is also good for business. Users who trust a company and feel that their best interests are being looked after are more likely to do business with that company and recommend it to others. When customers feel valued and listened to, they’re more likely to be loyal to the business. This loyalty can lead to repeat business and referrals, further increasing sales and profits while lowering marketing costs.
4. It’s the future
As more companies adopt a data ethics approach to digital marketing, it’ll become the norm, and those who don’t will be left behind. Data ethics will quickly become brand equity like environmental commitments and an inclusive work environment. A brand with a demonstrated track record of carelessness and lax privacy measures won’t stand a chance against a competitor with a clear positioning toward ethics.
3 ethical data questions to think about
There’s no question that data ethics is becoming an increasingly important topic of discussion in the business world. As our reliance on data and technology grows, so does the potential to misuse this information.
While it’s impossible to completely eliminate the risk of data breaches or misuse, businesses can do many things to increase data ethics in marketing. First and foremost, businesses need to be transparent about the way they’re collecting and using customer data.
Customers should be made aware of what information is being collected, how it’s being used, and what steps are being taken to protect their privacy. Not only because the law requires it, but because it’s the right thing to do.
In addition to being transparent, businesses also need to be responsible for data collection and use. Information should only be collected for legitimate business purposes and should be kept secure at all times. Even after giving their consent, customers should be given the option to change their minds and opt-out of data collection, and businesses should never sell or share customer information without consent.
Those aren’t new and are largely covered by applicable privacy regulations. So what can you do today to improve your data ethics hygiene?
1. First-party data or zero-party data
To reduce their reliance on third-party data, companies have begun to invest in collecting their own first-party data, which can contain dozens or even hundreds of data points for each customer.
While Forrester is credited with defining zero-party data as “data that a customer intentionally and proactively shares with a brand”, this definition fails to make a very important point: who has control over the data?
What does all this mean for consumer data privacy? Whether consumers who voluntarily share their data fully understand its use remains a real question. Even though most companies strive to safeguard the information they collect from their customers, others will fail to properly secure that data, exploit it in potentially harmful ways, or sell it indiscriminately. With the idea that collecting more first-party data is better, consumers’ personal data will be in more databases.
The solution isn’t more first-party data that inevitably risks customers’ privacy. The solution is zero-party data where consumers retain full control over what they want to share with which brands, for what purpose, and for how long. Many initiatives are underway to tackle this problem, notably Caden, as an advisor I’m involved with.
First-party data example: forms
How many times have you filled out a form to receive a copy of a so-called white paper that was really just a marketing piece? Wouldn’t you feel better if you were given a choice to provide your contact information or not? After all, if you really like what they have to say, you’ll definitely find them again and be a much more qualified prospect.
2. Incremental consent
Mat Morrison of Digital Whiskey conducted a very interesting study of how people provided consent. While the ratio of ‘Accept’ vs. ‘Reject’ were very close—51% vs. 49%—the number of people who simply ignored the consent popup could represent nearly 40%. Thus, since consent needs to be explicit, the actual consent represented only about 37% of people visiting the site.
Consent notices are probably the worst user experience since the advent of the BLINK HTML tag. They’re intrusive, ugly, misleading, and ask the user for consent at the worst possible moment—when a minimal amount of trust isn’t even there.
As Morrison puts it, “It costs users nothing to refuse.” But the absence of useful data costs the brand a lot. He adds, “Is this really how we’d behave if we were putting the user, rather than the firm, first?”
If we think about the various purposes behind consent popups, we can sum it up to a few common scenarios:
- Web analytics: There is generally very little justification for relying on cookies—and even less on personal data—when the purpose is to optimize the web or app itself.
- Marketing: What’s preferable? Asking for marketing permission on the very first brand experience, at the risk of alienating those users, or wait until there’s a real engagement signal and ask at the right moment. A simple look at your web analytics data will likely reveal most users are new to the website—they’re visiting for the first time and might even leave the site after a single page view. Do you really want to waste your marketing budget on them? Of course, this is a generalization, and there are exceptions—but it’s a pattern I have seen countless times across many industries.
- Personalization: What’s the value proposition for personalization for first-time users? So why ask for permission then? Instead, the emphasis should be on building trust so those users eventually like you so much they’re willing to create an account and, you’ll guess, they will be more than willing to give their consent.
- Functionality: Withdrawing from the dependency on numerous MarTech solutions which crept over the years is a complex and daunting task. Can your site work without them? Can consent be postponed until the context really requires it? For example, chat is typically provided by a 3rd party solution and requires consent. Why not make it a part of the UX but delay consent until the user actively requests it?
Incremental consent example: web analytics
You’ve probably realized that the sites you visit require your consent before tracking you for web analytics purposes. But did you know that even when you decline all cookies, the site owner—the data controller under the GDPR—can still track you if the solution uses no cookies—ePrivacy—and collects no personal information—GDPR? It may not even have to ask for consent at all.
3. Data minimization and integration
We’ve all seen the impressive Chiefmartec technology landscape showing a staggering 8,000 MarTech solutions. A sound marketing strategy lies in seeing the ecosystem instead of silos, which requires interoperability of data and integration. This is where solutions like Supermetrics come into play and why they’re so important.
Data minimization is collecting and using the minimum amount of data necessary to achieve a specific purpose. This is important because it reduces the chances of data breaches and protects the privacy of individuals.
We’ve looked at data ethics, its benefits, and a few examples and solutions. Data protection has obviously gained much attention in marketing, mainly because of the GDPR. But data protection and privacy aren’t about the law or consent banners, nor are they about cookies.
Demonstrating strong data ethics is a value proposition to your customers. It’s a state of mind that will quickly delineate competitors in the post surveillance capitalism era.
Data minimization example: work with what you have, not what you think matters
Revise your data collection process and what kind of data you’re collecting. Stop collecting any data you can’t justify with an actual use case—any additional data you collect adds a layer of complexity to your business.
Don’t stress over data you can’t get, and focus on the freely available metrics—how your marketing content performs, what your audience engages with, and what kind of content gets shared more. Instead of focusing on demographics that don’t relate to your product.
About the author
Stéphane Hamel, MBA, OMCP is a strategic advisor, a pre-seed investor in privacy tech, analyst, speaker, and teacher with a keen interest in privacy and ethical data use in a marketing context. Supermetrics acquired Da Vinci Tools from Stéphane in 2020.
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