Image for Marketers Must Bone Up on Consumer Privacy Regulations

In the digital era, consumer data has become the coin of the realm for marketers spending an astounding $126 billion on online advertising . As a result, consumer data also has become a magnet for government regulation and a source of potential corporate reputational damage.

Consumer concern is growing over what data is collected and how it’s used. Pew Research reported late last year that 81 percent of Americans view the potential risks of data misuse outweigh the benefits of products marketed through data-driven advertising campaigns. The public also is overwhelmingly wary of being constantly tracked without consent and with little or no control over how data is used or shared. That wariness includes governmental data collection.

Much has been written about European and California’s consumer privacy measures. A number of states have or are pursuing regulation. Washington Democratic Senator Maria Cantwell has a bill pending in Congress that would establish national standards for the collection, use, sharing and protection of consumer data as well as levy stiff fines and permit consumer lawsuits against violators.

Cantwell says, “In the growing online world, consumers deserve two things: privacy rights and strong laws to enforce them. They should be like your Miranda rights – clear as a bell as to what they are and what constitutes a violation.”

The peril of new government regulation extends to marketers, which stand to have less latitude in what consumer data they can collect and employ. Marketing firms will have to be more alert to consumer data collection procedures used by their clients to avoid being sucked into enforcement actions and consumer backlash campaigns.

Ben Billingsley of Broadsheet Communications warns that consumer privacy concerns don’t just attach to technology firms. They likely will extend to any organization that maintains a consumer database for any reason. Because of that, he advises marketing firms to do their homework before signing on to clients, including “data and privacy risk assessments” based on the kind of consumer data it collects. 

In addition to the tricks of the trade, marketers “must master new data collection regulations,” Billingsley says. “Those who ignore this crucial trend are bound to end up on the wrong side of a reputational nightmare,” either in league with a client or on their own behalf.

An important contribution of communication professionals is to push for readily understandable and broadly applicable consumer consent or refusal. The Pew survey indicated a quarter of US consumers say they are bombarded daily by data collection requests. Another 32 percent say they are asked weekly. 

“There is also a general lack of understanding about data privacy laws among the general public: 63% of Americans say they understand very little or nothing at all about the laws and regulations that are currently in place to protect their data privacy,” Pew says. This is an opportunity for confidence-building communications by organizations that explain consumer rights and offer clear consumer choices.