In 2023, privacy will be a central focus in the United States. Several states are implementing data privacy laws, granting consumers rights, promoting transparency, and increasing business obligations. Against this backdrop, privacy must take center stage in operational planning and development. Consumers will expect businesses to comply, and regulators will enforce compliance. Those who take these requirements to heart stand to gain customer trust and goodwill, as organizations that are good data stewards will draw gains when compared with less trustworthy businesses.
This post is part of our 2023 Data Transformation Outlook series
Taking Privacy Out of the Black Box
Privacy cuts across multiple aspects of a business, and sometimes those interactions can be complex or hidden amongst the various business processes that may be in play. This was reflected in an August 22 eMarketer study that found nearly half of the respondents reported no familiarity with key privacy efforts slated to impact the industry over the next two years.
Escalating Regulatory Enforcement Challenges
Europe’s Digital Markets Act and Digital Services Act will transform how online businesses must operate within the Union, CNBC reported that 100+ data privacy and security laws are in place globally, and domestically we will see five privacy laws begin enforcement over the year. An estimated half of brands remain unaware of these changes and so risk being blindsided by enforcement action. A “wait and see” approach has worked in years past, but there is increased risk going forward: As the number of laws increases, waiting for a perfect plan for compliance risks enforcement from multiple states in the meanwhile.
Recommendation: Build Preparedness & Trust Ahead of Regulatory Changes
Succeeding in these challenges can easily set a brand apart from the competition as privacy enforcement efforts likewise increase. Those who fail to incorporate privacy proactively may soon find themselves subject to investigation, bad press, and fines, with budgets curtailed and roadmaps derailed as key staff gets swept up in enforcement investigations.
This is to say nothing of the loss of consumer confidence which often follows as a second-order effect from enforcement action and bad press. A study in The Economist found that following a loss of consumer trust, brands may see up to a 30% reduction in value. Meanwhile, consumers may spend up to 25% more on brands with whom they have established a trusting relationship.
Technology Shift Challenges
Marketing attribution efforts are expected to become more difficult as third-party cookies enter the end-of-life for the Chrome browser. Upwards of 47% of brands will be blindsided by these changes.
Recommendation: Create a First-Party Data Strategy
Privacy By Design
Since Ann Cavoukian, Ph.D. introduced the concept of Privacy By Design in the 90s, we’ve seen a shift to requiring privacy in product design. This trend has increased in recent years, finally becoming part of regulation with Europe’s General Data Protection Regulation (GDPR), which has acted as a basis for the impending slate of U.S. legislation. For those who claim user privacy is paramount, these principles offer a solid foundation for business efforts while promoting user trust.
The Intersection of Personalization, Privacy, and First-Party Data
The three above issues intersect, and increasingly the net result is less (fewer) data to make decisions with. While data modeling has been proposed as a solution, we feel there’s another path to creating a clear value exchange between the organization and the consumer.
