Consumer Data — The Holy Grail of Marketers
For marketers around the globe, data is the key to understanding purchase habits of consumers. The wealth of information is available through numerous touchpoints, social and traditional, that the consumer experiences across the value chain of any brand. This has led to a situation where data can be sold to various parties, often without the knowledge of the true owner of the data.
In June 2018, California had passed a data privacy law that bears similarities to the European Union’s GDPR (came into force in May 2018). However, there is yet to be a federal law of this kind covering the U.S. This lack of control over private data has prompted Tim Cook, the CEO of Apple, Inc. and others recently to urge the U.S. Congress to pass a law providing citizens with the rights to delete their personal data from online platforms. In fact, Tim Cook, in a recent article in Time, went on to outline the four rights to guide the legislation: a) minimization of personal data, b) information on the content of data collected along with rationale, c) provision for access, correction and deletion of personal data by the consumer, and d) data security.
One of the great risks of unprotected consumer data is the rise of “data brokers.” The retailer, on many occasions, sells priceless consumer information to companies which, in turn, sell data to other marketers. All this happens while the real owner of data — the consumer — is completely oblivious of the exchanges. This has boosted an unchecked shadow economy. This has led many enterprise leaders to urge the Federal Trade Commission to set up a data-broker clearing house, requiring all data brokers to register. This would enable consumers to track the transactions they have been engaged in. The consumers would also be cognizant of how and where their data is going to be used, and they would be empowered to delete their data on demand.
Rise of New Revenue Streams
The need for consumer data has shaped up a new revenue stream, which involves readership information about articles that mention brands. For example, the company Memo aims to leverage the growing demand for data by creating a marketplace where advertisers can purchase audience metrics for editorial coverage, viz., engaged reading time, page views, scroll depth, etc. In general, publishers track page views, but they do not share it. Publishers such as Meredith Corp., BuzzFeed Inc., PopSugar Inc. have agreed to share their data with Memo. Marquee clients such as Unilever, direct-to-consumer contact-lens marketer Vision Path Inc., and bed-and-bath retailer Parachute Home have signed on to use Memo.
Role of Marketing Procurement
The role of procurement managers is going to be crucial, as they must create a safe ecosystem of compliant vendors. Although it is still early days, and the fines or penalties are yet to be determined for non-compliance, procurement must be prepared for the mammoth task of revisiting the entire supply base (and the third-party vendors engaged by the frontline suppliers) and prioritize engagement with quality suppliers in a sustainable manner. The team needs to conduct surveys with suppliers to understand their readiness and compliance level with the new legislation. Clauses need to be inserted to hold the suppliers accountable in cases of non-compliance. It is also imperative for procurement to keep the key decision makers in their organizations updated about the upcoming legislations along with their implications.