How to Make Data Privacy Changes Work for Your Digital Marketing Strategy

The death of the Internet cookie is a fatality that has been talked about for a long time. While Google announced earlier this year that it would delay a plan to phase out third-party cookies on its Chrome browser until 2024, the changes will eventually arrive. The move, which will change the way ads are targeted on websites, is sparking much debate about the future of digital advertising. Savvy marketers, however, focus on first-party data and draw-game data.

I spoke with Ed Hallen, co-founder and CPO of Klaviyo – a unified customer platform that provides data-driven marketing tools for e-commerce businesses – about the importance of ethical data collection and on how brands can leverage these practices to reach customers during the busy holiday shopping season.

Gary Drenik: Why should data collection methods matter to brands and consumers?

Ed Hallen: How brands will be able to use third-party data — or information you collect about users through an indirect relationship — is fundamentally changing, and it all comes down to the cookie. While these tiny pixels were initially a way for advertisers to track consumers and provide more personalized content, cookies can now seem “scary” as consumers are increasingly concerned about how much of their private information is being leaked. are accessible to the public.

According to a recent Prosper Insights & Analytics survey, nearly 63% of consumers are concerned about the privacy of their data when shopping online. Unfortunately, all the ambiguity surrounding how advertisers collect data has made consumers wary of the process. Brands should therefore be transparent about data collection practices and remain aware of them when developing their marketing strategies.

Drenik: How does Klaviyo use data to support its customers while protecting consumer privacy?

hall: At Klaviyo, we are committed to our customer-centric data model, which is data that comes directly from a customer or potential customer. Customer-First Data combines null-party data (information that someone proactively shares, such as their email address, phone number, or date of birth) with first-party data (information observed by a brand on someone about their properties, such as the products they clicked on on that brand’s site).

Allowing our customers to access this data gives business owners the information they need to build more intimate relationships with their customers, resulting in a better user experience, increased brand loyalty and, ultimately, more revenue. Klaviyo offers a comprehensive database and data engine that provides our customers with endless consumer insights, including tools to more accurately predict future customer behavior.

Drenik: Why has collecting customer data become so difficult and how can business owners overcome these challenges?

hall: Consumers are (naturally) becoming more cautious and selective about what information they are willing to share with brands. According to a recent Prosper Insights & Analytics survey, over 44% of adults 18+ have denied mobile apps permission to track their activity, and 33% have enabled their private browsing to protect their digital privacy.

The most important thing business owners can do to overcome these challenges is to build trust among their customers.

Drenik: What are the differences between first-party data and third-party data? What is the place of cookies in all this?

Lobby: First-party data is information that a customer voluntarily shares with a brand. This brand owns this data – it is the most reliable for a business because you know exactly where the information is coming from. Third-party data is information aggregated from a variety of sources, and it’s often shared or sold by big tech companies, advertising platforms, and other marketplaces.

Essentially, zero and first-party data is consent-driven, while third-party data is not explicitly opt-in, and the same goes for cookies. First-party cookies are created by the website you are visiting and are most often used to improve your experience on that specific site. For example, these cookies prevent you from logging in each time you visit a site. Third-party cookies are those created by someone other than the website you are visiting. Again, these cookies are used to improve a particular experience you have on a website, such as an advertisement (for example, when you click on an advertisement and then see that advertisement on the next two sites you visit).

Drenik: With Black Friday and Cyber ​​Monday fast approaching, how can brands leverage first-party data to successfully reach their customers?

hall: Due to an uncertain economy, our recent holiday consumer spending report demonstrated that consumer habits are changing during the most important e-commerce time of the year. Only 2% of respondents to our survey say inflation will not have a substantial impact on their spending plans, meaning that by Black Friday Cyber ​​Monday 2022, inflation will have an impact on how over 90% of consumers spend their money. That said, hope is not lost for retailers. According to the study, consumers still plan to spend a lot during the holidays, but targeting the right audience will be crucial for brands’ success.

Different demographics choose their discretionary spending more carefully, making ends meet by increasing budgets for some categories and decreasing them for others. That means brands, from e-commerce businesses to brick-and-mortar stores, have room to increase e-commerce sales this holiday season as long as they can better understand who they’re targeting with which product categories.

By leveraging first-party data, brands gain visibility into who their customers are and have the ability to better understand their needs.

Drenik: What should marketers prepare for in 2023?

hall: Economists predict that 2023 will be another turbulent year for businesses and consumers, and retailers will face challenges such as continued increases in cost-of-living expenses and an overall decrease in discretionary spending. Customer loyalty and retention will be key to success in the coming year.

Drenik: Thank you, Ed, for your insights on how Klaviyo uses data to support its customers while protecting consumer privacy, how business owners can combat data challenges and eliminate data gaps from first and third party.

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