Impact of GDPR on personalized marketing
Under GDPR, consumer now have more control over their data. Without consent from customer, company couldn’t track or store customers’ data. What’s more, customers have right to have their data deleted. However, data is like the fuel that powers the modern marketing machine. And Personalized marketing is one marketing strategy that really rely on it. One survey conducted among UK users and shows that 34% of UK users said they will exercise their right to be forgotten once GDPR come into force. GDPR leads to data shrink for most company and a lot of digital marketers and professionals said GDPR has a significance impact on personalized marketing. However, it’s still hard to say GDPR is good or bad to digital marketing. The effect might be positive or negative and companies need to find solutions to either leverage this opportunity or address the problem.
What is the GDPR?
GDPR stands for General Data Protection Regulation. It’s one set of data protection rules for all companies operating in the EU, wherever they are based. The EU General Data Protection Regulation (GDPR) was approved by the EU Parliament on 14 April 2016. And It was enforced on 25 May 2018. The GDPR primarily aims to give more control and rights (See appendix 1) to individuals over their personal data. One feature of GDPR is extraterritorial applicability. GDPR applies to all companies processing the personal data of data subjects residing in the Union, regardless of the company’s location. For instance, if a US company provides product or service to the people in Union, this company must comply with the regulation. Another important feature of GDPR is consent. Before GDPR, most company considered their users implied consent that company is able to gather, store, analyze their data. The GDPR redefines consent as “any freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her.” Company must get consent from customer, only then can company collect, store, process and analyze their data. Besides, organization in breach of GDPR can be fined up to 4% of annual global turnover or €20 million.
GDPR set a new strongest rule about data privacy worldwide. Some company like Los Angles Time decided to block EU users from their content entirely. However, it’s not a long-term solution. Although some company outside the Union don’t need to comply with the GDPR, they still need to think about what they could to prepare for the future possible enforced data privacy regulation in their own country.
What is the personalized marketing?
Personalized marketing is a marketing strategy by which companies leverage data analysis and digital technology to deliver individualized messages and product offerings to current or prospective customers. In order for personalized marketing to be successful, a company must be able to obtain as much personal information about a current or prospective customer as possible. Let’s look at a daily experience for example. I have an account at Bloomindales.com and today I added a sports legging in the cart but didn’t check out. And then I closed the browser. 10 minutes later, I received an email from bloomgdales.com and this email reminds me that I forget to complete my purchase. Another example is when your open the Amazon website, you may see a “recommendation for you” section. Amazon based your data like purchase history and your search query, they could recommend some related products to you.
Generally speaking, it’s not a coincidence that you see some ads in your browser, email and social media platforms. Those ads are tailor to you. Marketing platform like Google Ads, Facebook Ads could generate a target audience list for clients based on users’ address, IP, interest, gender, and deliver the individualized message.
A survey shows the leading digital marketing personalization technologies used by large companies worldwide as of May 2016. According to the data, 71 percent of responding organizations used web analytics software for personalization purposes.
Currently, the popular web analytics software are Google Analytics and Adobe Analytics. Normally, web analytics software like Google Analytics will provide a tracking code to their clients, company just need to install it into their pages. Company could use advanced Google Analytics collection and tracking features through cookies that collect personal data from website visitors. However, right now consent is an important feature of GDPR and cookie consent is one part of it. cookie consent refers to getting permission from website visitors to collect personal data. After receiving the consent from users, Google Analytics is able to gather the demographics data, interests, behavior data and etc.
Descriptive research is often described as studies that are concerned with finding out “what is”. Since this project discusses about what’s the impact of GDPR on personalized marketing and the nature of this project is descriptive, descriptive research will be the primary method for it. The data collected from descriptive research may be quantitative, qualitative or both. Quantified information could help us better understand the impacts and support it. However, because of the lack of enough data, I can’t verify the conclusion statistically and It may reflect certain level of bias.
This project discusses the problem for the entire industry, due to the time and other limitations, primary data is unavailable. Thus, I will use secondary data as the data sources for this project. Secondary data represents public or existing information collected by others. I will collect the related data and information from government statistics, industry report or other related reports. Because the feature of secondary data, it’s hard to find lots of data specific to this topic, I will combine different information and interpret it, try to get some insights from them.