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RESEARCH, ANALYSIS & TRENDS

Consumers want personalization without

disclosing data

Protecting privacy is a challenge for every
generation – and an opportunity

Companies have long "borrowed" customer relation-
ships from advertisers and social networks. These
companies collect behavioral and demographic data
and then resell it as targeted audiences. However,
comprehensive data protection regulations – both at
legal and corporate level – force them to stop buying
their customer relationships from others but to own
them.
Customers expect personalization in every
single interaction with a brand. At the same time, This turning point isn’t insignificant. Half of the compa-
they don't trust companies to keep their personal nies surveyed said recent changes in privacy regula-
information safe and handle it responsibly. tions have made personalization more difficult. Howev-
Companies everywhere face this dilemma, as a er, since Google, along with Firefox and Safari, will ban
new study shows. third-party cookies by the end of 2023, switching to first
-party data is no longer optional. Many companies are
Cloud communications platform Twilio's third annual already responding to these shifts in consumer prefer-
The State of Personalization Report shows that 62% of ences, policies and technologies.
consumers expect personalization – otherwise they
would break their loyalty to brands. Conversely, 49% Interestingly, according to the report, data privacy con-
say they will buy from a brand again if it offers a per- cerns are most prevalent in APAC: 60% of consumers
sonal shopping experience. And only 40% believe that in APAC say they’re bothered by a lack of data privacy,
companies use their data responsibly and keep it safe. compared to rates nearly half that in other regions.

The report shows that a lack of trust is increasingly af- Data and technology barriers to personaliza-
fecting consumers' purchasing decisions: for 60%, tion at scale
trustworthiness and transparency are the most im-
portant characteristics of a brand. In 2021, it was still Technology remains a hurdle for many companies.
55%. Tech giants have a multitude of data scientists and
enormous budgets to make large-scale personalization
Personalization vs. Privacy – a paradoxical re- a reality. Average companies, on the other hand, are
lationship still struggling to fully embrace personalization initia-
tives, the study found.
Providing personalized experiences requires personally
identifiable data but changing consumer attitudes to After all, six out of ten respondents stated that they will
online data disclosure presents companies with a para- invest more in personalization this year. The most com-
dox. mon obstacles include lack of technology, unclear ROI,
lack of accurate data and organizational hurdles. Com-
First-hand data is ideal for data protection, i.e., data is panies are therefore investing more and more in better
collected directly from the customer with their consent. technology for managing customer data and can thus
According to the Twilio report, 63% of consumers say build deeper customer relationships. ◊
they're okay with personalization as long as brands use
their own data and not data purchased or rented from By Daniela La Marca
third parties.

July 2022: Search Marketing 5