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Word on the Future

July 2019 | ~ 3 min read

Welcome to the tenth edition of Word on the Future. Thank you for being here with us.
Keywords: personalization; privacy; zero-party data
TL;DR
SENTENCES

The personalization–privacy paradox

privacy–personalization paradox
Enterprises investing in personalization face a unique challenge: to balance the use of user data with their audiences’ privacy. Kevin Cochrane, CMO of SAP Customer Experience, identifies a ‘tricky situation’‘Consumers want personalized offers […] In order to execute on […] personalization, companies must collect large amounts of data. However, consumers only want some of their data used and only in a way that they are comfortable with.’
As human beings, we crave to be seen and treated individually. And that is just as true when we go shopping, or navigate online services: 35% of Amazon purchases and 75% of Netflix selections are driven by machine-learning recommendations.
However, a personal relationship goes both ways: an interaction can quickly begin to feel ‘creepy’ when a website addresses us as if it has a relationship with us but we don’t remember our part in it.

There is a line beyond which we perceive personalization as an intrusion into our privacy – and as individuals we differ quite significantly in where we draw that line. Demographics, for example, can play a part in it: 48% of 18-34 year-olds believe intelligent interfaces improve their customer experience; for consumers older than 55, however, that number nearly halves itself.
Personalization is more likely to conflict with an individual’s sense of privacy when it is based on ‘inferred data’, i.e. characteristics assigned to humans based on their activities and behaviors online. Or as Forrester puts it: ‘When marketers use inferred data to customize communications, there’s a very real chance they’ll get it wrong.’
Zero-party data example: cookie settings dialogue on swiss.com
Forrester recommends for enterprises to base their personalization efforts on ‘zero-party data’: data a person intentionally and proactively shares with their brand. This ties in with privacy-first approaches like Google’s Federated Learning which enables collaborative machine learning on mobile phones while all training data is kept on the device – decoupling the ability to train an ML model from the need to store user data in the cloud.

I believe open source technology is in a unique position to drive brand value here, due to its inherent nature of transparency. While our industry has become increasingly data-driven, enterprises need to steer clear of the stigma of surveillance in the name of personalized digital experiences. 
Transparency and consent are, and always will be key to supporting trusting, long-lasting relationships between brands and the people they serve. Rather than basing AI-driven omnichannel marketing on acquired third-party data, enterprises should explore opportunities of employing combinations of zero-party data, on-device training approaches, and open source platforms to solve the personalization–privacy paradox and win their customers’ loyalty long-term.
QUOTES
Josh Lovejoy

Josh Lovejoy

Principal Design Manager, Ethics & Society at Microsoft
on A people’s Bill of Rights for personalization

‘I believe our job as technologists is to try to improve the lives of as many people as possible by augmenting their capabilities, and that in order to do so, we’ll need to pivot from a product mindset that treats users purely as consumers to one that respects them as authors of their own story.’

HEADS UP
WordCamp for Publishers 2019

Meet us: at WordCamp for Publishers in Columbus, OH, Aug 7–9, where we will be represented by K.Adam White, Libby Barker, and Lonnie Tapia.

The Drum

Read: How to match your business goals with the right technology for digital growth in The Drum, by Ana Silva and Nevena Tomovic from Human Made.

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Until next time!

 
 
Noel Tock
Partner and CGO at Human Made
July 2019 contributions from: Ana Silva, Camila Villegas, Caspar Hübinger


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