How many times have we heard that “data is the new oil”? This maxim insists that customer data constitutes a valuable commodity with myriad uses.
But does it really? Oil in its many forms helped shape the world we live in today — imagine the tech industry, or any industry, without plastic. Petroleum's value was unimaginable a century earlier, when stable electricity supply wasn't common, and Saudi Arabia had yet to begin extracting oil.
Data's value isn't new — customer loyalty programs and brand equity have been useful tools for decades. But as the Internet shifted from tech-student-novelty to essential business-driver, data became a non-fungible commodity.
And in our ongoing COVID-19 decentralized workplace, data is critically important for businesses and individuals alike.
WFH creates privacy awareness explosion
According to AP, “The eruption of COVID-19 last year caused the proportion of people working from home in the U.S. to nearly double, with the shift most pronounced among college graduates and workers in such fields as finance and professional services. AP quotes the U.S. Labor Department as saying that the “share of employed people working from home shot up from just 22% in 2019 to 42% in 2020.”
There's no putting this genie back in the bottle. Workers who don't need to physically be in an office often prefer to work from home (WFH). Over the last year, many firms have discovered that their staff are not only as efficient (or more efficient) in a WFH environment but enjoy greater job satisfaction as well. WFH isn't for everyone, but many knowledge workers using collaboration tools thrive in this non-office environment.
We don't yet know the long-term ramifications of this new office paradigm. Employers can lower costs by shedding office overhead and reducing HR-related costs. Employees eliminate costs associated with commutes. Win-win?
Yet, a WFH environment isn't for everyone. A sizable percentage of the workforce — some 42% in the 2020 poll cited above, likely higher in 2021 — enjoy the perks of WFH. This arrangement presupposes adequate data connections in both terms of speed and latency, but home-office connectivity is usually adequate.
A greater task awaits marketing departments worldwide: datasets from home and work environments now overlap. This creates new challenges for data collection — especially as knowledge workers, the employees who benefit most from WFH, are typically more aware of data privacy concerns. Companies whose portfolios include massive data collections (Apple, Amazon, Alphabet, Facebook etc) are hyperaware of these concerns and how they affect brand equity.
The complicated case of consent-based marketing
"Customer 360, privacy, and real-time personalization are driving the need for enterprise to manage customer data as a service," says Gerry Murray, research director for marketing and sales technology research practice at IDC. "Siloed customer data is a competitive disadvantage; it inhibits end-to-end customer experience management, journey orchestration, and privacy and compliance capabilities and ultimately represents a huge innovation debt to the business.”
“Providing customer data as an enterprise service requires a cohesive ecosystem of which CDPs are a foundational technology," said IDC's Murray. Wikipedia defines a CDP (customer data platform) as “a collection of software which creates a persistent, unified customer database that is accessible to other systems.”
This image of any given customer as a siloed-data entity is eroding.
“As options for targeted digital advertising shrink,” said research firm Gartner in a statement, “marketing leaders must convince customers to volunteer their data — then manage that first-party data capture effectively.” Gartner said that while Google “won’t scrap technology that tracks web-browsing habits quite yet,” this won't “remove the urgency for marketing leaders to convince customers to volunteer data about preferences and behavior ('first-party data').”
“To succeed in a world of consent-based advertising, digital marketing leaders must accelerate when, where and how they collect, aggregate and deploy first-party data,” says Chelsea Gross, director analyst, Gartner.
“We take your privacy very seriously”
Third-party cookies are typically used to help targeted advertising. Google and Apple, citing privacy concerns, both recently announced moves to increase customer governance over their own data, said Gartner. “An iOS update by Apple now requires opt-in for device identifiers.”
Apple has polished its privacy stance and made it an advertising slogan for their smartphones: “Privacy. That's iPhone.”
“Google announced in June 2021 that it would kill its third-party cookie tracking in early 2022,” said Gartner. “By the 24th of the same month, Google had relented, saying it would delay that change until late 2023, but the writing is on the wall.”
The writing is indeed on the wall. “Done right, first-party data can strengthen customer relationships, as it enables organizations to provide more personalized, relevant experiences,” said Gartner. “But how marketers gather and manage first-party data will be key.”
Stefan Hammond is a contributing editor to CDOTrends. Best practices, the IoT, payment gateways, robotics, and the ongoing battle against cyberpirates pique his interest. You can reach him at [email protected].
Image credit: iStockphoto/Prostock-Studio