Why it’s finally time to end ‘data gossip’
In the last year, a tidal wave of scandal, scrutiny and regulatory change ramped up the pressure on tech companies and their handling of customer data.
Following Facebook’s 2018 decision to phase data brokers out of its ad-targeting service, Twitter finally followed suit in August, announcing it would cut all third-party data sources from its ad-buying platform.
It was a welcome step towards rebuilding consumer trust, and part of a trend I see right across the industry— the end of what I call ‘data gossip’— or the aggregation, trade, and use of personal data by companies without consumers’ explicit permission.
Putting an end to the gossip
Before the GDPR came into force last year, third-party data brokers had long undermined consumer trust by obtaining personal data through questionable means.
The GDPR requires that businesses be more transparent about how they collect and use data. This means the standard for valid consent will be far higher, and it will be difficult to rely on third-party consent, bringing the law in line with consumer expectations.
Now the context is changing. The Cambridge Analytica scandal, and others like it, have shattered consumer trust like nothing before. Together with new regulation, this growing consumer scrutiny is making businesses rethink their reliance on third-party data.
The data gossip needs to stop.
Not all data is bad data
It’s easy for companies to be spooked by all this, but ditching unethical sources should not mean the end for customer data altogether.
There’s no need for businesses to scrap their goals of targeted marketing campaigns and personalized products.
Rather than solely rely on private third-party data aggregated and sold without consumers’ express consent, companies should instead begin to utilize the first-party data that sits within their business.
This information, which customers consent to share directly with the company, is a source that can be used legitimately and thoughtfully to enrich the customer experience.
To give just a few examples, first-party data can help businesses to:
# Understand the fundamental aspects of their business, such as the number of active users they have.
# Streamline the customer experience, removing inconsistencies and cutting the risk of contradictory or tone-deaf interactions.
# Provide a clear and actionable view of the customer journey, so businesses can understand how their product is being used and where improvements may be needed.
# Give support teams a complete understanding of the customer relationship, so their help can be better tailored.
When gathered and used with consent, respect, and transparency to deliver benefits like these, first-party data is a powerful way to improve personalized interactions and consumer trust.
Setting a new standard
Data gossip is quickly becoming a thing of the past, but there are still some industry outliers using customer data from dubious third-party sources.
In an age in which consumer trust is more fragile— and more valuable— than ever, companies must act to cut their reliance on third-party data. If they don’t, that trust may take far longer to heal than is necessary.
This article was contributed by Tido Carriero, Chief Product Development Officer at Segment.
30 March 2023