Podcast

Has data privacy replaced data security as the new topic of concern?

Callahan Agency | May 28, 2018

Consumers will be much more understanding of the purpose behind data collection if you’re transparent and forthcoming about your intentions. Most privacy concerns can be answered by a simple gut check. If someone was collecting this data on me, and using it for the purpose I’m going to be using it for, would I feel good about it?

When you’re researching new advertising and marketing partners and they’re using data to target people better, or to drive better customer experience, it’s important to understand the methodology behind the collection of data and what they do with it, and how the consumer might perceive that process.

Zack Pike, VP of data strategy and marketing analytics at Callahan, explains why data privacy is a growing concern and what marketers can do to set consumers’ minds at ease.

Listen here (or subscribe on iTunes,  StitcherGoogle PlayGoogle PodcastsPocket Casts or your favorite podcast service):

Welcome to Callahan’s Uncovering Aha! podcast. We talk about a range of topics for marketing decision-makers, with a special focus on how to uncover insights in data to drive brand strategy and inspire creativity. Featuring Jan-Eric Anderson and Zack Pike.

Jan-Eric:
Hi, I’m Jan-Eric Anderson, Vice President and Chief Strategy Officer at Callahan.

Zack:
And I’m Zack Pike, Vice President of Data Strategy and Marketing Analytics at Callahan.

Jan-Eric:
Thanks for joining us today. We’re gonna be talking about data privacy. It seems to be a big topic in the news these days. Zack, I don’t know, from your perspective, but for me, it seems like data privacy has replaced data security as the big topic around data. Maybe it’s Facebook getting in the news, maybe what we want to do is talk a little bit about data privacy today, give our listeners a little bit better understanding of what’s going on, and what’s on our minds about this, and maybe a good place to start, a little brief history on data collection, and big data, and where did big data even get its start?

Zack:
Yeah, that is a good starting point. So two things. Let’s break apart big data, and then the data collection piece. Let me talk about big data first. So big data, that term started probably six years ago, is when marketing people started talking about big data. You had a lot of people in various industries looking into this term, like what is big data? That’s a new term, I haven’t heard it before. What is it? And people in sciences and finance and healthcare had been dealing with this stuff for, in some cases, decades. If you think about the sciences, there’s always been data in that realm, so if we think about big data, it’s probably six, seven years ago when that kind of came up, and it really started when advertisers, marketers, digital marketing people, especially, started using data to make decisions.

It’s kind of funny, this was probably in, oh gosh, probably 2006, Google purchased a small company called Urchin, and Urchin was a web analytics tracking tool, so in those days, there were many websites that didn’t have web analytics tools on them, so people were looking at server logs, which are essentially pings to a server, to understand activity on a website, and it was really basic. In fact, the first report that I got, the IT guy printed off the server logs from the actual server, and the reason Google got into this game is ’cause people were buying advertising in paid search.

Jan-Eric:
So the genesis of the whole thing is basically around how to understand the monetary value of web traffic.

Zack:
Exactly. It was much easier to measure advertising in a digital world than it was in a non-digital world, which had been around forever. So when, especially a company like Google, jumps on this, they jump on because they have a financial interest, and you, seeing value in the dollars you’re spending with them, they buy a little company, they take it, rebrand it into Google Analytics, they make it way better than it ever would have been without them, and it’s all in the effort of I spend a dollar in paid search, I see that dollar manifest itself into 10 dollars on my website, that was the first step. But then it’s, once you get that fundamental baseline in place, it’s like well what else do I know about these people? Are they coming back? Is that 10 dollars actually resulting in 100 dollars, a year down the road? And you can understand how it grows, and expands from there.

Jan-Eric:
Yeah, and the timing of that was, if that’s happening in the middle part of the first decade of the 2,000s, that coincides with a huge growth in media dollars shifting out of traditional, linear media, into digital media, and in many ways becomes the pipeline, or the secret sauce, for publishers to be able to, and media companies, to be able to track more ad dollars, so it basically, this is about making money, and how we can take data, and turn data into ways to creating more compelling sales pitch, to earn advertising dollars by demonstrating the value of the web traffic, back to advertisers, increasing accountability, and all those types of things. So when that happens, and starts to take off, publishers, understandably, start to really get interested in this, and how can we be smarter, and smarter, and smarter about this, and collect more stuff? It kind of seems like, when you fast forward, then, to today, let several years pass, technology’s better, people are doing … our lives are more digital, this thing kind of feeds itself, right? So where do we stand today with data, and how is it being regulated, or controlled?

Zack:
Yeah. So there’s a lot of it. That’s the first piece. When we started tracking all this digital stuff, it was really non-identifiable to a person. You were looking at a click to a website, and you had, in many cases you didn’t even know where it came from. You just knew that it happened. Now, today, with the growth in technology, you know when, where, how, who, in most cases, and the who piece is what, I think, people are starting to get a little bit concerned about, and I think there’s varying levels of concern out there, and sometimes what we see in the media isn’t always accurate of what’s actually happening, but I think when we think about privacy, it’s the who that is really the issue, and-

Jan-Eric:
When we talk about who, what do you mean by that?

Zack:
Yeah, so Facebook knows Zack, right? They know what Zack is doing on their platform. Many websites know who you are, at an ID level. They don’t know that it’s Jan-Eric coming to the website, in many cases, but that’s what the concern is. When you start managing a person’s name, or their phone number, or their email address, their physical address, that data can be used for other things than just marketing, and that’s where the concern comes up around what’s happening with this data.

So Facebook is a good example, ’cause they just went through this big testimony, they have been in the news, and they’re one of the leaders in collecting this information, but they’re also actually a leader in how they’re using this information. Oddly enough, contrary to popular belief, they’re a leader in keeping this information private, not sharing it with third-parties, even though weird stuff sometimes happens. So I think that’s kind of where the concern comes in. It’s okay, now you know who I am, you’ve got it sitting in a computer somewhere. What if someone else gets access to that computer? Am I at risk, as a user? But then if the user is at risk, the company who stores that information also has some issues there, right? So if you’re a marketer, and you’ve got an email list of 10,000 people, those 10,000 people might want to know what’s going on with that information.

Jan-Eric:
So in this example, you’ve been describing the data as able … you’re identifying and individual person. We know it’s Zack, we know it’s Jan-Eric. For in cases where there is … you cannot personally identify the person, but you’re able to track other type of information about them, where they’ve been, what they search, what they buy, where they go, how is that a risk, from a privacy standpoint, if it’s not tied back to a specific person?

Zack:
Well, in most cases, it actually is. So there is someone who has that ID, and is holding it. Now, in most cases, that’s not shared. So those companies hold onto that. They don’t share it outside their walls. It’s always shared in an aggregate manner, which is a good thing, right? It insulates everyone from privacy issues. But it comes back to understanding of what is being measured about me. So we get these long terms and conditions, and no one reads them, right?

Jan-Eric:
Well, speak for yourself. I read every one, and I floss twice a day, too.

Zack:
Exactly, exactly. No one reads them, and even if someone tries, they’re not a fun read, right? They’re written by an attorney, and they’re meant to insulate the company from risk and liability, and things around the data, which is a good thing. They should be there. But when you have a setup like that, and your weather app on your phone says, “Hey, we need access to your location to be able to use this app.” You click allow, so you’re opting in, because yes, the weather app needs your location to tell you the weather at your location.

Jan-Eric:
Logical, yeah, it’s logical.

Zack:
It makes sense. But what often is hidden in the terms and conditions is that we are also using this information for advertising purposes. We’re using this to tell advertisers if you went into the Panera after Panera ran an ad against your segment of people like you, and that’s where, especially in the media, with our government, but also users in general, it’s just … it doesn’t feel quite right, right?

Jan-Eric:
Right.

Zack:
Because it is a little bit kind of big brother watching you, some could argue both sides of that, but if it wasn’t explicit in the consent that you gave, I think that’s where some of the concern comes in, right?

Jan-Eric:
I think it also begs another question of it is enough to just be explicit in what you’re saying? Because we joked around about that a second ago, but people, by and large, don’t take the time to really read, consumers don’t take the time read and really understand the terms and conditions, and they can explicitly say what they’re collecting, what the company is collecting, what the app is collecting, and what they intend to do with it. They could explicitly say that, and maybe the company feels like they’ve covered their rear, but the consumer doesn’t really care, or doesn’t care to take the time to read and understand, then is there really a benefit of explicitly explaining your intention, if you’ve covered your rear, is it really accomplishing enough? I think it’s an interesting debate. I don’t know that it’s something, necessarily, that we can solve today, but I think it’s … that’s a real thing.

It’s an interesting topic, maybe for another day. What’s the responsibility of the consumer, as well? And I also, we talk a lot about this, the theme of simplicity, in making things easier to understand. I wonder if a big opportunity for companies that collect data would be to really rethink the idea of terms and conditions, and how they are communicated, to make them easier to understand, to increase the likelihood of a consumer actually caring, and how interesting it would be of that being a form of consumer advocacy, to make terms and conditions easier to understand.

Zack:
Right. I mean you’ve been in this industry a long time. Marketers, one of the key jobs is to help people understand complex products and services in a way that makes it easy to purchase them, right?

Jan-Eric:
What’s the harm?

Zack:
Make it feel easy.

Jan-Eric:
Right.

Zack:
I think that would help squash a lot of the stuff we’re dealing with. I think it would also help our regulators see that, in most cases, this data’s being used in the benefit of the customer. In most cases, it’s being used to drive a better website experience, more relevant advertising that they’re probably gonna be more interested in, or want to see, if they have to look at advertising. Better email content. It’s being used for good things. It just feels weird, when we don’t exactly know all the details of it.

Jan-Eric:
Sure. So if I’m a CMO, or someone in charge of marketing, what are some key takeaways from our discussion, or some things that I should be thinking about, as it relates to data privacy?

Zack:
Yeah, so I think the first one is get a little bit of an overview of what’s going on in GDPR, in the EU. That, even if you just understand the fundamentals, you don’t need to go into depth around it, but the fundamentals of that approach … two things. One, potentially could be coming here in the next several years.

Jan-Eric:
Well, and I pause you for a second to say that it could be coming here in that we could have US based legislation or regulation coming, but it is already kinda here, because any company that is on the worldwide web potentially is reaching consumers who are protected by GDPR, so there are already implications for US based companies, by this European regulation. So it’s already, to some degree, here, and there are implications for that.

Zack:
Yup. So just get a fundamental overview of that. We’re not gonna go into detail here, there’s lots of information out there. The second one is, and this is, in the data world, this is a big one for me. It’s just what feels right. So when you go down the path of a new partner on advertising, and they’re using some interesting data to target people better, or to drive a better customer experience, make sure you understand the methodology that they’re going through, to collect the data, what they’re doing with it, and what the potential perception of a end user whose data is being collected is gonna be, if they found out that was being done.

We talked earlier, you had a really good point of asking the person sitting next to you on an airplane. In the marketing space, it’s easy for us to talk to ourselves, and make things feel okay, that sometimes some other people might not thing, but take yourself out of the marketing world. If someone was collecting this data on me, and using it for the purpose I’m going to be using it for, would I feel good about it?

Jan-Eric:
Right.

Zack:
Most of our privacy concerns can be answered by that simple gut check, and yeah, so that’s what I would-

Jan-Eric:
And then with simplifying terms and conditions that are read more frequently actually would give you an opportunity to kind of gut check that. Is what we’re intending to do, is this acceptable from people? People that really understanding what we’re doing, and we might be surprised that it’s really not a big deal, and people are supportive of it, and understand it, and appreciative of understanding it.

Zack:
Right.

Jan-Eric:
Well this is a big topic, obviously. It’s hot in the news right now. It’s probably not going anywhere. There’s a lot to unpack. We’ve only scratched the surface of course, but I think, as we wrap up, there’s just a lot to keep in mind. GDPR is a big deal. Being transparent and explicit about what your intention is, to do with information, and presenting that to consumers in a way that makes it very easy for them to understand are probably the biggest things that we’ve landed on. Zack, this has been fun. Thanks for your time.

Zack:
Thank you.

Jan-Eric:
This has been great, and talk to you again soon.

 

Thanks for listening to our Uncovering Aha Podcast. Callahan provides data savvy strategy, and inspired creativity for national consumer brands. Visit us at Callahan.Agency to learn more.