The digital marketing and online advertising landscape is evolving significantly due to new measures such as the Digital Markets Act (DMA), the European Union’s Digital Services Act (DSA), and strengthened cookie policies. These regulations aim to protect consumer privacy and combat deceptive marketing practices.
In light of these changes, 33% of our survey respondents have already stopped doing business with a company due to deceptive practices. This indicator demonstrates that companies must comply with the new rules of the game if they want to maintain or regain consumer trust. This article aims to help marketers create and maintain effective strategies, for example, by using compliance tools.
Key Takeaways
- 62% of consumers surveyed find it difficult to prevent their personal information from being used for marketing purposes.
- 76% believe that privacy protection should be the responsibility of companies.
- However, 51% are willing to accept data tracking if they receive rewards.
Understanding Consumer Sentiment on Data Tracking
One of the first steps in adapting to new regulations is understanding how consumers perceive data tracking and personalized advertising. This understanding is essential for developing tailored marketing strategies that respect these metrics and preferences.
Digital Markets Regulation (DMA): Coming into force in March 2024, this measure aims to regulate the economic activity of digital giants within the European Union by allowing users to benefit from “a wider choice of better-quality services, greater opportunities to switch providers if they wish, direct access to services, and fairer prices.”
Digital Services Regulation (DSA): Coming into force in August 2023, this measure aims to reduce the dissemination of illegal content and establish a transparency policy between online platforms and their users.
Consumers divided on online advertising and data tracking
Consumers are divided in their opinions on the tracking of their online behavior by companies to increase the relevance of ads. According to our survey, 27% of consumers have a positive opinion of this practice, while 26% have a negative opinion. This nearly even split suggests that while some consumers appreciate the personalized experiences data tracking can provide, a significant proportion are wary or uncomfortable with the idea of their data being used. For marketers, this means it’s more important than ever to strike a balance between personalization and privacy.
Fake Information to Evade Tracking
Faced with privacy concerns, many consumers are adopting defensive behaviors. For example, 20% of consumers admit to sometimes providing false personal information, such as a fake name, date of birth, or email address, to access content or continue using a website, while 36% never provide false information. Companies must recognize this trend and work to address underlying trust issues, for example, by being more transparent about the collection, use, and protection of user data.
So how can we encourage consumers to consent to the tracking of their data for advertising purposes? The challenge is to create offers compelling enough to encourage membership while complying with strict data management and consent regulations.
A reward in exchange for membership
Data shows that rewards and free trials can encourage consumers to share their information: 51% of consumers are willing to accept data tracking in exchange for discounts or loyalty points, and 44% in exchange for free trials.
Finding the Balance Between Personalized Advertising and Compliance
Despite privacy concerns, many consumers still prefer personalized ads to ads unrelated to their interests. In fact, 47% of consumers “somewhat agree” and 18% “strongly agree” that they prefer targeted ads.
This preference underscores the importance of personalization in driving consumer engagement and conversion. However, with new regulations in place, companies must ensure that their personalized advertising strategies do not infringe on consumers’ privacy rights. Software that automates compliance checks while delivering personalized content can help marketers achieve this balance.
What is compliance software used for?
Compliance software allows companies to ensure compliance with current standards and regulations through key features such as tracking regulatory changes and generating compliance reports. Preventing the Misuse of Personal Data
Despite appreciating some aspects of it, many consumers find it difficult to prevent the misuse of their personal information for marketing purposes: 20% of consumers “strongly disagree” and 42% “somewhat disagree” with this statement. These statistics highlight the need for companies to use software that offers clear opt-out options and ensures transparency in data management practices. By making it easier for consumers to control their data, companies can build trust and comply with regulations.
Online Advertising: Consumers Stand Up to Deceptive Practices
New regulations also target deceptive marketing practices, which can damage consumer trust and lead to regulatory sanctions.
Over the past 12 months, many consumers have encountered marketing practices they believe to be deliberately misleading. Specifically, 37% of respondents reported difficulty unsubscribing from marketing communications, and 38% saw a countdown timer indicating the time remaining to redeem an offer. These tactics are often perceived as manipulative and can lead to consumer frustration.
Business Advice
To ensure their online policies and advertising are not misleading, companies can use software that ensures transparency in marketing practices by giving users the ability to:
- easily end a free trial or promotional offer,
- easily log out of a website or app,
- unsubscribe from marketing communications,
- find actual prices and product availability,
- easily unsubscribe from a subscription.
These actions not only ensure compliance with current regulations but also maintain consumer trust.
According to our data, 33% of consumers have stopped doing business with a company because of its deceptive practices, and 27% have informed those around them. These actions demonstrate the potential long-term damage that deceptive marketing can cause to a brand’s reputation.
Ensuring Marketing Compliance
With the increasing involvement of governments and regulators in the digital marketing space, compliance has become a major concern for businesses. Understanding the types of behaviors consumers are likely to report and who they believe should be responsible for protecting data privacy can guide companies in their compliance efforts.
Reporting Violations
Consumers are increasingly willing to report companies for specific violations. For example, 43% of consumers indicated they would report companies that use their personal information without permission, 41% those that employ manipulative tactics, and 40% those that distribute offensive or inappropriate content.
Business Consulting
With consumers increasingly placing importance on data protection, the use of GDPR (General Data Protection Regulation) software can help businesses identify sensitive data and ensure it is processed securely. This is achieved through key features such as data mapping, compliance management, risk management, and consent management.
Data Protection Responsibility
Seventy-six percent of consumers believe that protecting personal data should be the responsibility of businesses, while 24% believe that individuals should assume this role. This view places significant pressure on businesses to adopt robust data protection measures.
Leveraging Software for Compliance and Effective Marketing
As digital marketing regulations become more stringent, businesses can adapt with the help of software that allows them to comply with these laws while maintaining the effectiveness of their online marketing and advertising. By understanding consumer sentiment, avoiding deceptive practices, and ensuring robust compliance mechanisms, businesses can build trust and maintain a competitive advantage. As discussed, certain tools not only help businesses continue to deliver personalized and effective advertising, but they also ensure that all activities are aligned with consumer expectations and regulatory mandates. In addition to those mentioned above, the following tools are also important.
Consent management and compliance software (CMP): These tools manage user consent requests for data tracking and marketing, while ensuring compliance with regulations such as GDPR. They offer features such as customizable consent banners and dashboards to track user preferences.
Sensitive data management software (DLP): DLP software helps protect personal data from leaks and unauthorized access. They monitor and control how sensitive information is used and shared, which is essential for preventing data breaches and maintaining consumer trust.
Advertising campaign management and analytics tools: These tools optimize advertising campaigns by providing data on ad performance while complying with transparency and non-manipulation regulations. They enable the creation of personalized campaigns while ensuring that practices comply with ethical standards. Audit and reporting platforms: These platforms facilitate the verification of marketing practices and the generation of compliance reports. They help identify deceptive marketing behaviors and track corrective actions to ensure practices are aligned with regulatory and consumer expectations.