GDPR: An Opportunity
The rhetoric around GDPR has been overwhelmingly negative. This isn’t surprising considering brands will have to adapt their practices when the new EU legislation comes in next May. If they don’t, they could be slapped with fines amounting to 5% of annual turnover or €20 million, whichever is greater. However, the financial cost of non-compliance isn’t what brands should be focusing on. Before them lies a golden opportunity to rebuild consumer trust.
There is pervasive dissatisfaction among consumers about how their data is used. According to Acxiom, 73% of people understand that they must provide personal information to shop online. However, nearly 60% do not trust brands to use their data responsibly, CIM found. It is this gap that GDPR has the potential to bridge.
The way consumers are served ads ‘in context’ via programmatic algorithms is often tactless. A lack of human touch has led to 75% of consumers regarding personalised advertising as ineffective, creepy or unacceptable. This kind of online environment is unlikely to foster trust. Not only will the new legislation directly impact the way ads are purchased, sold and placed, but as a by-product, it should improve the quality of digital advertising overall. The persistent rise of ad blocking signifies that much of the industry’s online content isn’t working. Come May 2018, brands will have to step up their creative output to re-engage audiences that choose to opt out of marketing.
GDPR will introduce sorely needed transparency to the brand/consumer relationship. Brands will no longer be able to covertly tail consumers online without their consent and consumers will have more clarity around who has their data and what they’re doing with it.
While this is a disruptive departure from the current situation, brands should view this as a good thing. CIM research shows that two-thirds of consumers would share more personal data if organisations were more open about how they will use it. If brands get GDPR right, they might find themselves with access to more data further down the line, not less.
More importantly, GDPR will require brands to handle consumer data with greater respect. In the long term, this should restore a degree of trust between consumers and brands.