Data-Driven Advertising and Its Impact On Our Privacy-Driven World

These days I find myself faced with a rather interesting dilemma.

On the one hand, digital media presents small, local businesses with legitimate avenues to reach vast audiences and sell their products.

On the other hand, while I don’t mind sharing some data about me to access social media or certain apps, it is important to me that the platforms I use behave in an ethical manner, that consent is not taken for granted, and there are some boundaries to the data they collect. But that’s just wishful thinking.

I’ve realized over my last 5 years of trysts with data and analytics that once you’re addicted to data, you’ll do anything to get more and more of it. The bigger you are, the worse the addiction.

In my profession, the big question everyone has is, the Digital Advertising Era threw a nice party. We are about to enter the Age of Privacy. Will the party go on, or is it So Long, Farewell to digital advertising? What will happen to all those businesses for whom digital advertising is the only affordable and scalable ad medium?

Well, guess what?

Businesses and brands have been getting built long before digital advertising and its data-driven approach were touted as a veritable silver bullet. Brands old and new will continue to thrive long after digital advertising and data have made way for the next shiny new thing with its own set of gurus and influencers and mantras and whatnot.

Because you see, advertising is not the business of data-driven decision-making or prying under people’s kitchen sinks or tracking their every breath. It’s simply the artistic science of communication. It’s about knowing the audience at a personal level, understanding how a brand solves a problem for them and having an ongoing conversation with them about it among other things.

Data – either in the form of numbers or in the form of behavioral patterns – can't help you know the audience all by itself. The best way to know the audience is to genuinely be one of them. The second best way is to talk to them face to face, on a regular basis, about their life, their routines, their dreams, their fears, their aspirations, their goals, and maybe a few words about the product category as well. Tracking user activity on the internet doesn’t give you that kind of information. A/B testing can only take you a few steps further if the fundamentals are already in place.

An oversimplified overview of how tracking works

Tracking by digital platforms identifies people with similar activity, group them into “lookalike audiences” and show ads in the hope that since about 10% of their behaviors overlap, maybe 2% of them will buy this product once they’ve seen the ad and interacted with the business and its website a bunch of times.

For all the data-drivenness of the digital platform, this isn’t an acute degree of precision or prediction that makes you go Shut Up And Take My Money. It’s not all that different and not more targeted than a newspaper ad, by any experienced traditional media executive’s estimates. The only difference is that here data tells you exactly how many people saw the ad, how many times, how many clicked on it (0.1–3%), out of the people who clicked and went to your website how many bought products worth what amount of money.

Google Analytics shows you the number of website visitors who came from different sources, how much time they spent, how many pages they visited, how quickly they exited, how many of them came back later, and so on.

This being the basic extent of how data is used by ad platforms, and what data you get to read from visitor activity on your website, here is a 3-step plan for businesses to tide over this seemingly unfortunate situation.

Step 1: Product experience FTW

The hardest part of all that you can do to build a successful business - the product, or your core offering.

Very often, once the proof of concept has been achieved, companies are in a hurry to go to market. Once in the market, there are the challenges of day-to-day operations, marketing, and hitting revenue targets. Whether it is a large corporation or a fledgling startup, doing consistent marketing to bring in new traffic and new sales often takes priority over improving the product/service, and making sure that the value you deliver and the experience the customer gets are unmatched by your competition.

When was the last time you were so blown away by an app or a product you purchased that you went right back and bought more without seeing an ad ever again? I have a few products I buy without ever seeing an ad. One is the Scotch Brite scrub with a sponge. Second, my Victorinox peeler and zester. I once recommended the peeler to a friend who was so overjoyed with its awesomeness that he inaugurated the peeler by peeling every single vegetable and fruit he found in the house. And then his family had to eat all of it including 1 kilo of carrots. This, and a scene from the movie Julie & Julia, actually inspired me and a couple of friends to come up with a campaign for Victorinox in which everyone's peeling and chopping everything they can find like crazy because "the knife made me do it".

I also fell in love with a rented Lenovo ThinkPad that I was using, I bought one. I spilled a quarter-liter of water on it, and it just went on working like nothing happened. My friends who own Macs have panic attacks when they see a glass of water within spilling range of a MacBook even if it’s not theirs.

Having a winning product and experience BEFORE you start spending huge sums of money on marketing, will have you scuttling less after data points that will do nothing more than satisfy your vanity, and more after things that need to be done to actually grow your business.

Two things I always tell myself - every time a potential customer lands on your website and leaves without taking any action, you are not only losing the time, effort, and money you spent in getting the customer to your website, you are also preventing them from coming back soon. Based on the last visit, the customer would believe that they’ve seen everything they needed to see; you have nothing to offer to them.

Every time a customer spends money (and time) purchasing and using your product and is underwhelmed, they will most likely never come back. If they do, it’s because you spent even more money on getting them back.

A great product lets you do data-driven advertising in a different way. Imagine having such a high percentage of customers who are so happy with your product that they leave such effusive reviews and data points you can showcase in ads! Imagine having over 70% repeat customers, or a website with <10% bounce rate, or a 30% conversion rate with first-time visitors!

The most basic reports and metrics in Google Analytics (or any other analytics tool you might be using) can tell you so much about your website and your product. You only need to spend a little bit of time consistently looking at the numbers, thinking about what they can possibly mean, and how to improve those numbers. 

So, if you have only enough resources to get one thing right, may it be the product.

Step 2: Relationship and Loyalty

Someone has just come to your website and bought something. Or filled a form, or signed up, or asked a question. Don’t you want to know who they are, what they want, how you can give them what they want, delight them while at it, and make them have the best experience ever? If you don’t feel this way, regardless of the size of your company, you probably don’t care about your product enough.

Getting visitors to your website is easy. Getting people to buy the product one time is also not that hard. But that’s as far as advertising can take you. Businesses become sustainable and successful when people buy your product almost every time they need that product. Sometimes (for example in the case of a Saas product or a service), a relationship gets built while the customer is starting to use the product or service. Other times, like in the case of eCommerce, there are hidden opportunities to build a relationship with the customer, turn them into loyalists. This can't be done just by getting bots to chat with customers and sending them only automated emails no matter how personalized they are. It can only be done with a dedicated effort to build real relationships. 

Companies often forgo direct human interaction because it’s not scalable, or people misuse it. But customer support, helplines, quick resolution of complaints, accommodation of special requests, listening to customers, seeking feedback and suggestions, what you do with the feedback and how the customer is treated during interactions go a long way in giving confidence, building trust, and inspiring loyalty. 

It’s really hard to treat someone like they’re your family. It has to come from within the leaders, and permeate to every team member as a part of the ethos of the company. “How you do anything is how you do everything.” This is most visible and felt in direct customer interaction. If the product is great, but you made someone feel angry or insignificant, your product doesn’t matter.

Customers who relate with you, or feel like you’re family, will be your best advertisers delivering the highest conversion rates at zero cost. Imagine having thousands or millions of brand ambassadors without spending a paisa. Imagine what such an enormous fan base can do for you. That’s an advertising channel that doesn’t invade anyone’s privacy. 

Step 3: Communication as the glue

If you don’t know what your brand is really about, communication seems super easy. You can say anything you want, and whatever you say will get you some kind of traction. But getting results from it is super hard.

But if you take the trouble of finding out what your brand stands for, communication seems hard. Suddenly, you can’t say anything you want. You need to get very specific about your communication. The good thing about it is that your ads, website, or emails appeal to the right people as opposed to everyone.

So take the trouble, map out what you are really about, make an original content plan and ideas that align with your brand’s core. And create communication that expresses exactly that. 

Generic communication will get you thousands of clicks and maybe 1-3% conversion. If your communication can filter out people who wouldn’t buy your product anyway, your ads have a 10x higher chance of reaching people who actually would. The chances of them converting also go up because they resonate with the ad, as opposed to if it were a generic message.

One example of this is niche products and services that use their 1-star rating as their ad. There’s a course by CXL Institute, which is advertised with their 1-star rating and a review that says this course is too tough. Simple, but effective. Most businesses would take this as a negative review and hide it away. 

Rather than be cool and clever in communication, be authentic, consistent, and interesting so that your genuine tribe can find you.

Conclusion

The world is moving towards privacy, transparency, and consent, whether platforms will cooperate or not. There are consent-based data management products like Hypersign, which offer a password-less authentication solution that people can use to sign in anywhere, without filling forms giving away our personal information. 

I love this idea because we should have control of our digital identity, not a social media company or a search engine. An old fintech client with a million+ people using their app once told me, yes, they do need to collect some data to ascertain whether the person availing their pay later service was going to pay them back. But they want to do this in the most transparent, respectful, and consent-based manner possible. It was one of the best moments in my career when the co-founder said, "we want to build a billion-dollar company; but we don't want to get there anyhow, we want to get there doing the right things, which I believe is possible". 

Transparency, consent, and respect are part of the ethos - of individuals, small businesses, communities, large corporations, or governments. Either you build your foundation with these values because you believe it's important, or you don't because ________________ (fill in the blank with whatever; all answers except "because there's no other way" are correct).

“Privacy is not an option, and it shouldn't be the price we accept for just getting on the Internet.” --Gary Kovacs

People have stopped trusting big tech to treat their data with respect, and not track their every online activity. So it’s not long before they will take matters into their own hands, use a data privacy tool that will help them own and keep their data. 

At the same time, Big Tech, instead of understanding and accepting that privacy is a basic human right, is still going around fighting for their right to intrude without asking for permission. In this day and age. 

In the recent Facebook vs. Apple exchange, it seemed to me that Facebook wasn’t as concerned about not being able to track as about having to get consent first. It’s like with every step they take, Facebook manages to lose our trust a bit more while trying to position itself as the savior of small businesses. I have no doubt that Facebook provides the best platform for small businesses to advertise. I am a big fan and beneficiary of the results Facebook advertising delivers. 

Instead of fighting our need for privacy, one would expect companies to build solutions to advertise without compromising on privacy. With not much clarity yet about how this is all going to develop, a smart way forward is to build a resilient marketing strategy that doesn’t depend on excessive, obsessive tracking of the audience.

Data is everywhere. Not just in the numbers that big tech companies show you. Let’s learn to break out of the notion that data comes only from tracking or that it looks only like numbers and graphs. Look, listen and act, and you’ll get all the data you’ll ever need.