Advertising as we know it is about to change. Here's how marketers including Chipotle, L'Oreal and Marriott are bracing for an increasingly privacy-conscious world.
Hollis Johnson/Business Insider
- As regulators and tech platforms like Apple, Google, and Facebook clamp down on targeting and focus on privacy, advertisers are bracing themselves for a new reality.
- Chipotle's top marketer compared the changes to a "steamroller coming."
- They are appointing chief privacy officers and focusing on collecting first-party data.
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CANNES, France - Using information like browsing history, location, age and income to pinpoint consumers with ads has been the stock in trade of online advertising.
But as regulators and tech platforms like Apple, Google, and Facebook clamp down on targeting and prioritize privacy, advertisers are bracing for a new reality.
"We have a steamroller coming, and most people aren't ready," Chris Brandt, chief marketing officer at Chipotle, told Business Insider. "It reminds me of Brexit - people think it means one thing but are realizing it acually means another."
Privacy regulation is gaining steam, forcing advertisers to respond
Privacy has been top of mind for the advertising industry since the rollout in the EU last year of GDPR, a sweeping privacy law determining how companies can collect, store and use personal data. Many US states including New York and California are considering their own legislations.
GDPR was a wake-up call for brands, said Marriott's chief marketing officer Karin Timpone, and prompted the hotel chain to prioritize privacy throughout all the company, not just marketing. Marriott, along with Adobe and Bank of America and others, has apppointed a chief privacy officer to set strategy while navigating regulatory compliance.
"It goes well beyond marketing," Timpone said.
Some efforts are happening across companies. Mastercard CMO Raja Rajamannar said he was talking to tech companies on behalf of advertisers develop a framework to safeguard consumer privacy. Rajamannar is an Association of National Advertisers (ANA) board member, as well as the president of the World Federation of Advertisers (WFA).
"It's morally the right thing to do to make sure that consumers' privacy is protected and that they have a look into how you are using that data," he told Business Insider.
Some brands are bulking up on their first-party data
Marketers including Chipotle and L'Oréal are focusing on amassing first-party data on their customers as Google restricts cookie-usage for ad tracking on Chrome, Apple limits third-party tracking, and Facebook veers toward private communication.
L'Oréal has created virtual makeup try-on tools and wearable devices to get people to voluntarily share their data. With AR tool Virtual Makeover, for one, it collects information like name, address, age, and engagement data that it uses to customize offers such as samples or coupons.
"We all need to get better at our first-party data," L'Oréal's global chief digital officer Lubomira Rochet told Business Insider. "And for us, that first-party data is acquired through building relationships with trust and through a service."
Chipotle similarly rolled out a new loyalty program in March to get customers to share their data in exchange for rewards.
"It's going to be harder for us to target, and the loyalty program lets us have a more one-to-one relationship than anything else," said Chris Brandt, CMO at Chipotle. "If I see that you come once a month, I can give you incentives to come three times a month, and that is exciting."
The hope that the loyalty program will also help Chipotle control the frequency with which it delivers ads across platforms and create more relevant ads, said Brandt. Right now, the brand doesn't know if a given person saw the same ad on Facebook, Snapchat and TV.
In surveys, people have said they're increasingly concerned about protecting their online privacy. But the consensus among the CMOs was that as long as they are providing value to people and being transparent about how that data is being used, people won't mind sharing personal information.
"To the extent that you're going to be able to deliver value to consumers, create content that engages and provides entertainment to consumers, you're always going to have a channel," said Pedro Earp, CMO at Anheuser-Busch InBev.