Permission based advertising becoming a consumer requirement in the U.S. (Photo by JOHN … [+]
In June, an international coalition of consumer rights organizations and data protection experts called for a ban on “surveillance-based advertising.” Are you surveilling the future of your micro-marketing?
The most nimble companies are, and this will likely change how online advertising works, soon. More tech companies are placing consumers at the center of the advertising dynamic, giving them the power to choose whether to be marketed to, and by whom. A common strategy of such permission-based advertising is marketing only to those who opt-in to receiving offers and announcements.
Many have heard of this, thanks to Apple’s move to limit advertisers’ ability to track consumers. In this case, users downloading apps are proactively asked to opt-in if they want the apps to track them on other apps and websites. In an equally pro-privacy move, Google plans to cut off a key source of online advertising, which many retailers rely upon, by phasing out all third-party trackers by 2023.
Permission-based advertising, not long ago a feature that helped a retailer or brand stand out from competitors, is now crossing the line to becoming a consumer requirement in the U.S. In one 2020 study, 70% of consumers said they think it’s unacceptable for a business to share their details with vendors without their permission.
Asking Permission Encourages Old-School Re-Engagement
The funny thing about these privacy moves is they create a “back to the future” moment.
Companies will need to create and capitalize on new marketing tools, but they must also embrace many of their techniques from the time before cookies and online marketing. A time when they worked to create value for the consumer and when the cost of contacting their customers (remember catalogs?) meant spending time understanding them, and investing accordingly.
U.S. advertisers can simply look to foreign counterparts to see that it can be done. European regulations have required consumer permission for a long time and their world has not melted down. The rules simply require consideration for the consumer.
6 Approaches To Gaining Trust, With Permission
Asking permission is akin to asking for trust, after all. It’s an act of transparency. In advertising, it means explaining clearly to customers why their data is collected, what specific information is gathered, how it is used and – importantly – the value of their information. This value recognition, even the willingness to pay for it, could become necessary if retailers want to be trusted.
Some companies, many of which are startups, are now approaching this marketing model as a standard. Here are six ways they are enabling permission-based advertising.
Digital currency as payment. It seems fitting to pay for intangible data with money that is virtual. Enter the digital currency Ask Coin. Created by the permission-advertising startup Permission.io, Ask Coin funds a global digital advertising system built on opt-in data sharing. Users who agree to share their information on digital channels and on Permission.io are rewarded with Ask Coins, which are issued by advertisers. Essentially, users are monetizing their own data and – ideally – will build trust through the interactions.
Collaborative data communities. Brands can learn a lot more about their customers and deliver better value for the shared data when they work together. More platforms are being developed to aid this model. DISQO, founded in 2015, is a platform where more than 20 million consumer members are rewarded for sharing information with business clients. Because combined data provides more comprehensive customer understanding, DISQO’s business clients can use the shared member opinions and behaviors to develop more accurate (and trusted) advertising.
First-class email opt-ins. Many retailers, such as OurPlace.com, ask visitors to register to receive emails upon visiting their sites (“No spam, only good stuff. Pinky promise.”) And for good reason: The average permission-based email marketing open rate is nearly 20%, while the non-permission open rate is less than 5%. Online retailers can take this effort further once the emails come, with plainly written messages that invite customers to share specific pieces of information (such as the last piece of furniture bought) in return for a discount off their next purchase or a coupon.
Cookie alternatives. With Google planning to phase out cookies in a year, startups are quickly developing permission-based alternatives. One place for ideas: the platform 33Across, which helps publishers monetize inventory with analytics that reveal how their content is shared and on what platforms. It’s a widely used tool – more than 800,000 publishers and 24 billion pages a month. With this exposure, 33Across can follow the attributes of various reader groups, but instead of cookies, it assigns “pub tokens” within these customer groups that last 14 days, yet do not identify a specific browser or a person.
Permission-based loyalty exclusives. All loyalty programs are based on an information-exchange agreement, but many members feel slighted when it comes to the explicit returns they get for sharing their data. Four in 10 consumers would prefer to opt-in to a promotion or exclusive offer. Some programs are tackling this by offering special rewards to members who agree to participate and share information in invitation-only events (think of Starbucks’ Bonus Star Bingo game and other challenges). Taking it a step further, the gamer-focused Lootcakes rewards all members who share data about their playing habits, describing their activity data as “buried treasure.”
Subscription-free opt-ins. During the Covid-19 pandemic, nearly 20% of consumers purchased subscription boxes for goods, such as for food and clothing, according to research by Coupon Follow. For the many who prefer to not pay a subscription fee for goods, online retailers can offer a variety of membership options, at various prices, with discounts for opt-in advertising. Members who choose this option would receive advertisements that are targeted based on their browsing data, with the goal of creating more relevant subscription suggestions.
Permission Takes Partnerships, Surveillance Does Not
Shopping and buying are intimate endeavors, and consumers would prefer a say in how these behaviors are monetized. Retailers must access the resources to adapt, even if it means adopting some of the old techniques required before they got hooked on the low-cost but low-nutritional “junk food” of digital marketing.
Asking permission to follow a consumer is in some ways giving oneself the permission to fail. Yes, some customers may say no. But if they say yes, and trust is earned, the risk is worth taking.
I’m the former CEO of LoyaltyOne and currently serve as a Director and strategic advisor to a number of organizations. As a global leader in loyalty, retail marketing and
I’m the former CEO of LoyaltyOne and currently serve as a Director and strategic advisor to a number of organizations. As a global leader in loyalty, retail marketing and analytics, I’ve been leveraging knowledge gleaned from customer relationships for over 25 years to create relevant communications and enhanced shopper experiences. I’ve published two books: “The Loyalty Leap: Turning Customer Information Into Customer Intimacy” and “The Loyalty Leap for B2B.” I frequently speak at retail and marketing conferences around the world and have contributed to hundreds of stories in news media across North America, including The Wall Street Journal, Businessweek, the Los Angeles Times, MSNBC and the CBC. In addition to Forbes, I also contribute to RetailWire, Retail Customer Experience, CustomerThink, Business 2 Community and Wise Marketer.