For more than two decades, the economic advantages of collecting third-party companies’ information on consumers have hampered technologists’ dreams of giving people more control over their data and preventing the collection of personal information.
Now, in the face of increasing privacy regulations and penalties, public agencies and private companies are leaning toward the concept of “non-party data” – information that a consumer shares directly with a business with which they have a relationship and that can still be used to personalize their experience. As a result, technology companies and academic researchers are developing data architectures to support third-party data technologies while giving control — and more data security — to the consumer.
Sometimes called “zero-party data,” says Ant Phillips, chief technology officer of Celebrus, non-party data traffic has gained traction due to consumer disapproval of third-party advertising technology companies, which often collect data against consumer wishes. , which announced its non-partisan dissolution earlier this month.
“Data collection and third-party data sharing is not something consumers have ever been involved in – they just didn’t wake up and say, ‘I want to share my data with a lot of companies,'” he says. “Feasibility study [for no-party data] It is about brands that want to do the right thing for their consumers because most consumers have no problem trusting certain brands, but they don’t want their data spread all over the internet. “
The struggle is real
Giving consumers control over what information is collected about them has been a long struggle. In the late 1990s, the pro-privacy company Zero Knowledge Systems Try creating a certificate based system It can attest to certain traits of a consumer – such as being an adult – without the need for personal identification. In 2008, Microsoft pursued technology in its U-Prove system, after acquiring Credentica, which Founded by Stefan Brandsa former cipher agent in ZKS.
For the most part, these technologies cannot rival the commercial success of ad technology companies using third-party cookies.
The result is that privacy-conscious consumers are actively fighting back against tracking cookies, and policy makers and browser developers have followed suit. In 2017, Apple announced the Intelligent Tracking Prevention System, which would prevent tracking by third-party cookies, Which scares advertisers. Since 2018, the European Union has asked advertisers Obtaining users’ consent To use third party cookies. And in 2019, Mozilla announced that its Firefox browser would do just that Block third-party cookies; Google followed suit, Pledge to phase out third-party cookies in 2023. Faced with low subscription rates, companies have resorted to deceptive design of dialog boxes that ask users to consent to the use of their data.
With great resistance to data collection, companies have focused on engaging with consumers. Non-Party Data – Which is what the analytics company Forrester Research asks for Zero Party Data – This is information collected directly from the consumer. It is usually collected through preference settings or microexperiments, in which the product maker or service provider directly asks the consumer about their habits.
Zero data is the future, says Stephanie Liu, an analyst at Forrester Research.
“Zero-party data principles will be the basis for data collection moving forward: transparent, agreeable, and deliver value to the consumer,” she says. “Brands are historically intimidating at asking consumers for data. … But as consumer data becomes more and more difficult to obtain, companies need to invest in strategy and technology for what they will demand from consumers, and how and what benefit they’ll get in return.”
Targeted ‘scary’ ads
The battle between advertising companies and privacy advocates often centers around the tracking of citizens across websites. While tracking people through their real lives is usually prohibited, large online advertising technology companies are able to effectively go after consumers online. Currently, more than 80% of US citizens believe that they lack control over data collected about them by companies and government, and believe that companies that collect data pose risks outweighing benefits, According to a survey conducted by the Pew Research Center.
A big part of the problem is that despite the data being collected, the ad either appears to be missing out on purpose or too subtle to be frightening. Additionally, ad technology companies often pick up on behavior that has nothing to do with a consumer’s buying intentions or habits, and often uses the information in ways that consumers don’t agree with. Policy makers have recognized the unintended privacy costs of the third-party data market, passing regulations such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Protection Act (CCPA) and similar legislation in the United States.
For all of these reasons, the third-party data model is broken, says Celebrus’ Philips. Consumers do not want to be tracked, and the slight advantage of advertising technology companies’ ability to design marketing is greatly outweighed by the privacy risks posed by technology and the fact that advertising companies’ expectations about consumer interests are often inaccurate.
“From an economics point of view, the whole model is wasted capital – it’s an economic waste,” he says. “One misplaced ad won’t break the bank, but on the whole it is ineffective.”
With no party data, the consumer provides information about himself. However, they still want to retain control of the data. Otherwise, they have no guarantee that the third party companies will not use that data in unintended ways.
Tech companies are beginning to offer solutions to allow for personalization while giving the consumer control over their data. The Celebrus system, for example, Stores information in local storage, allowing the consumer to retain controlIt performs all the customization and processing on the user’s device. On her face, technology looks like steela project co-created by web founder Tim Berners-Lee and MIT, that allows users to create virtual data “barriers” on their systems so that they can give trusted companies access to it in a precise way, says John Bruce, co-founder and CEO of Inrupt. , which commercializes technology.
“Solid allows people to identify themselves with service providers without losing control of the data,” he adds. “Companies are really starting to understand that they can serve customers better if they keep their trust and let them control their data.”
Consumers want customization
Ad tech companies are not going away, but they will likely have less access to consumer data. Introducing personalization to consumers while limiting data collection will be the future, According to analyst firm McKinsey & Co., which found that 71% of consumers expect a personalized experience. The company found that companies that excel at providing this experience typically generate 40% more profit on those services.
The result will be that advertising will be less targeted but closer to what consumers want and less than what we have today — the annoying, frightening and harmful data uses, says Forrester’s Liu.
“[I]Not only are the shoes you already bought that still track you online, but [advertisements targeting] “Those who have lost a pregnancy and can’t opt out of baby advertisements,” says Liu. “A large part of the reason we are here — with Apple introducing new privacy features, a rapidly evolving privacy regulatory landscape, and increased consumer awareness — is because we have crawled consumers, and they are sick of it.”