Digital Responsibility Kicks In
California is cashing in, as part of the first settlement with cosmetic giant Sephora for breaking the California Consumer Privacy Act (CCPA). This act protects the state’s 39 million residents from having gathered personal data sold without telling them.
The state is sending a powerful message to the industry, because data and its collection has been part of the digital landscape—akin to the Wild West with no rules or regulations. Those days are over, and now one area where guns have been blazing and regulations are rolling in are in the arena of digital privacy.
As the internet developed, the rules did not keep up. There was no monitoring and limited regulations exist on privacy, so companies could learn exceptionally intimate details about a person's likes, desires, interests, sexual preferences and more.
Today, digital data is a $300 billion industry, according to McKinsey, and it is based on allowing corporations the maximum amount of information on a person, so they can be properly targeted for advertising.
The amount of data currently available has brought in huge profits to companies around the globe, as they are able to identify a consumer's likes, dislikes, pain points and unmet needs. This has been immensely helpful in targeting how to interact with users and personalize services.
In the past few years privacy advocates and regulators started the privacy paradigm shift with acts such as the General Data Protection Regulation in Europe and CCPA in California. Following this trend, companies such as Apple and Google have shifted in this direction and continue to adjust their technologies accordingly.
At a National Press Club in Washington D.C., in a speech earlier in 2022, Kent Walker, president of Global Affairs at Google, discussed the importance of responsible data practices.
“There is a range of views when it comes to technology and technology regulation. But when it comes to national privacy regulation, there is a clear consensus: Americans want it,” he said.
A Pew Research poll found that 75 percent of people support government regulation of consumer data.
Walker further explained,“and the absence of a comprehensive federal privacy law has left a vacuum that states are trying to fill by scrambling to pass their own, often inconsistent, laws—a trend that actually risks fragmenting consumer protections.”
While consumers might feel more protected as new regulations are being considered and will soon be implemented, the impact on businesses will be felt around the globe as financial leading to change.
A recent CNBC article explains how companies that rely on data are already struggling “Snap’s shares have lost almost three-quarters of their value this year, as the company reckons with slowing demand for its ad platform, a challenging economy and Apple’s 2021 privacy changes that have made ad targeting much more difficult.”
However, there is a way to be digitally responsible and both allow digital entities using technology and data to extract value, ethically and transparently, without defying users' privacy.
Solutions need to 'meet in the middle' by creating a space that both protects companies' best interests so they can learn limited but powerful information about their end users which helps streamline marketing. Using advanced technologies such as artificial intelligence-powered deep behavioral data models, it is important to bridge the gap between users’ right for privacy and businesses' ever growing need for actionable data.
Third-party cookies are currently used by the digital ecosystem to understand users' behaviors and preferences across websites and devices. As the internet moves to first-party data—Firefox and Safari have already turned third-party cookies off and Google is expected to deprecate 3PC, the three-phase commit consensus algorithm in 2024—there's a need for new data generating solutions. Several solutions are available that generate user profiles without compromising business performance metrics or users’ privacy.
Solutions need to "meet in the middle" by creating a space that both protects companies' best interests so they can learn limited but powerful information about their end users, which helps streamline marketing.
Using advanced technologies such as artificial intelligence-powered deep behavioral data models, it is important to bridge the gap between users’ right for privacy and businesses' ever growing need for actionable data.
Because there have been unprecedented changes in digital privacy, it underlines the competitive advantages built by some of the big tech platforms.
According to a McKinsey report predicting data trends into 2025, there are a few key characteristics to the data-driven enterprise. Perhaps the most telling is the idea that data will be embedded in every decision, interaction and process. This combined with it being processed and delivered in real time as well as being prioritized for privacy and security.
While the wild west produces great inventions and a myriad of stories, those days are coming to a close. Digital responsibility is the wave of the future and it is a win-win situation for all involved as it addresses everyone's needs in a responsible way.
Ohad Tzur is chief operating officer of Kahoona, a 1st-party audience data generation solution designed for scale and accuracy without collecting any personal information. The founders of the company include: Gal Rapoport, CEO; Alon Ashkenazi, chief product officer; and Tzur.