By incorporating the principles of data invitation, security, dialogue, and value proposition, advertisers can not only comply with stringent regulations but also build a rapport with consumers that goes from transaction to interaction.

The tension between data and privacy has created a complex landscape - a battleground, more like - where economic interests, ethical considerations, and legal frameworks interact in a delicate dance. We examine the potential benefits for advertisers who shift their emphasis from the technical dimensions to a more human-centric approach.

The Current Landscape

In what can be seen as the ‘new norm’, data-driven advertising and the race towards greater personalisation is top priority for advertisers. Given the paramount importance of customer protection, changes such as the death of third-party cookies as well as tracking prevention and general data-privacy protection laws are poised to significantly influence the digital marketing landscape and are, consequently, a positive development. However, businesses that find themselves unable to tailor their marketing efforts to individual consumers at scale could face increased expenditures. Specifically, businesses may need to allocate an additional 10 to 20%  in marketing and sales budgets to maintain their existing return rates. This therefore is no longer an option for companies but remains imperative within delivering a worthwhile value exchange.

Formulating an Effective Dialogue through DRM

By now we are all aware of the ‘obvious’ ad tech alternatives to third-party cookies that value consumer privacy yet still aim to deliver targeted and effective advertising. Utilising first-party data, for example, has surfaced as a viable alternative in the age of heightened privacy concerns. Companies have already devised plans to align with current data governance norms while also venturing into all-encompassing first-party data alternatives.

However, what hasn’t been explored in its totality throughout this process is the idea of what McKinsey calls a Data Relationship Management (DRM) approach, which involves four fundamental aspects: inviting data sharing, safeguarding data through a dedicated center, engaging in meaningful data dialogue, and presenting a compelling data value proposition. For the ad tech sector, who are trying to find the balance between effective data management and privacy concerns, a DRM approach that hinges on fostering robust, trust-centric relationships with customers is worth considering. 

Moving Beyond the Technicalities of Data Management

In the ad tech world, expertise often veers heavily toward the quantitative, with professionals well-versed in leveraging metrics like CTR, CPM, and Return on Advertising Spend. Those within the industry deftly use algorithms and machine learning to make sense of enormous data sets, aiming for optimal ad placements and timing. Yet, this technical prowess can sometimes come at the expense of the human element - the very core of advertising's persuasive power.

While the technical side will forever remain relevant, as the industry barrels toward even greater programmatic spend, the importance of building genuine, trust-based relationships with consumers often falls by the wayside, and could very well be the answer to data privacy concerns. Here, the Data Relationship Management (DRM) approach provides a much-needed counterbalance. By emphasising explicit consumer consent and a transparent value exchange, DRM injects a layer of ethical and sustainable practice that can not only stand up to evolving data privacy norms but also potentially enhance the quality and effectiveness of advertising campaigns. For example, historically, the language in privacy communications has been bogged down by complex terminology, accompanied by "accept" options that are often misinterpreted by consumers. As regulatory climates change and consumer knowledge expands, such as Apple's advocacy for more explicit data permissions, organisations must assume greater accountability in clarifying data collection practices. Consequently, to meet the critical eyes of both regulatory bodies and discerning consumers, the onus is on companies to cultivate relationships rooted in transparent, consent-based data practices.

To effectively roll out a DRM model, the best practices recommend the adoption of an omnichannel approach to data invitations, the use of straightforward and individualised communications, and the simplification of language for general comprehension. 

Fortifying Data Integrity 

Data Relationship Management could play a crucial role in addressing the challenges revealed by a recent Truthset study, which examined 15 data brokers and uncovered that email and postal address matches, essential components of ad targeting and audience measurement, are accurate only 51% of the time. By employing machine learning models and predictive analytics, organisations can not only detect inaccuracies but also anticipate and prevent them. These statistical approaches not only enhance the accuracy of email and postal address matches but also offer valuable insights into the dynamics of customer behavior, enabling businesses to fine-tune their advertising strategies. By rigorously maintaining and verifying connections between data points, the ad tech sector can enhance the precision of their customer profiles, resulting in more effective ad targeting and audience measurement. This ensures that companies can not only rectify existing inaccuracies but also fortify their data ecosystem against future discrepancies. 

Charting the Course for a Human-Centric Strategy

As the complexities surrounding data privacy and consumer consent continue to intensify, methodologies such as the DRM approach, which emphasise explicit consent and a transparent value proposition, are well-poised to integrate seamlessly within company strategies. As the ad tech industry continues to evolve, there's an urgent need to recalibrate its focus from sheer data optimisation to a more human-centric approach. Despite the allure of algorithms and big data, it's critical to remember that at the heart of every click, impression, and conversion is a human being making choices. This is where ad tech needs to refocus its attention, providing not just a technological solution but a return to the core principles of advertising: trust, value, and meaningful engagement, effectively bringing the 'human' back into data within the digital advertising equation.