The European Union is dishing up some tough love to brands and advertisers. It’s letting them know, through the release of its General Data Protection Regulation (GDPR) policies this May, that they’re messing up. That they can do better. That over-targeting consumers based on third-party data and cookie IDs just isn’t good enough. And, no, that outfit doesn’t look good on you.
Put another way: Europe is being a good friend. It’s setting boundaries and giving brands harsh feedback that they need to hear to do better.
Over the last decade or so, brands and advertisers have bought into the idea that big data will solve all of their problems by knowing their customers better than they do, and targeting them on a seemingly more personal level as a result.
While this might sound like the making of an informed and consensual relationship, the way advertisers have come to use data and cookies is neither of those things. Instead of tools of precision and accuracy, they’ve become blunt instruments of high quantity and low quality. And now brands are at risk of losing up to 75% of their third-party data about EU consumers for taking shortcuts.
Advertisers are beginning to realize that Europe might just have a point. This moment of forced self-reflection, however, has the potential to make them better than ever before. Here are a few ways brands can build themselves back up without using non-opted-in audience data as a crutch.
Use GDPR as an excuse to get to know real customers. Brands have been using third-party data and cookies as a source of targeting and new audience acquisition, but a much better approach has always been to create targeting profiles based on their own customer data. Understanding the characteristics, patterns and trends of people who actually buy from them, and using those insights to identify others with similar traits and behaviors has always been an appealing option, but also a tough one to execute. Most of brands’ first-party data is either trapped between siloes or otherwise difficult to activate, meaning that it often gives them an incomplete view of their customers.
GDPR might just be the impetus that motivates brands to solve this problem once and for all. They know that the first-party data they have is far more valuable than the third-party cookie IDs they did have—not just because it can’t be taken away en masse, but because it’s based on consumers who have engaged directly with the brand.
Base real-time targeting on real-time actions. Something that doesn’t get discussed enough is the fact that cookies-based targeting bases real-time conversations on consumers’ past behaviors. It goes something like this: brand runs into consumer and strikes up a conversation about a couch ... that the customer was looking at a few weeks ago. Meanwhile, in the here and now, the customer has moved on to rugs. Maybe the brand even sells rugs, but because it’s only able to recall past interactions, rather than respond to current ones, it’s forced to operate in a time warp, where any attempt to demonstrate relevance now is based on things that were only relevant in the past.
GDPR will inevitably influence brands to find ways of targeting consumers solely on what they’re engaging with in the moment. As a result, their conversations will have to be contextually relevant, which seems fair enough.
Win back consumers’ trust. GDPR isn’t random; it’s a response to consumers no longer trusting brands with their data. The industry invested so much to get consumers comfortable with the idea of trading their personal data for valuable content and relevant promotions, and by golly, they’d really gotten them there. So what did advertisers do next? Some respected this agreement. Others took advantage of consumers’ hard-won trust, making them painfully aware of the fact that when they hand over their personal data, they relinquish control over what happens to it. Clearly there were enough bad eggs to inspire an entire continent to introduce strict consumer data protections that will now affect everyone.
Ultimately, GDPR’s message to advertisers is this: Know your customers better. Be present. And earn their affection—maybe even their data—through relevant interactions. Good luck!