Businesses are not the only entities establishing a presence online. Each individual user has a unique online impression made up of search history, sites visited and products viewed or purchased. This information is often combined with demographics and survey answers in order to build a graph of data. A graph like this allows advertisers to construct detailed customer profiles. In turn, these profiles help streamline marketing strategies and create a tailored experience for each user. When utilized responsibly, user data is not only the key to increasing profits, but also to strengthening customer satisfaction.
However, before it can be utilized effectively, it is important to understand exactly what user data is and where it comes from. Advertisers are able to view user data from third-party sources like Google, or directly from users who interact with their content. In addition to different sources, there are also different kinds of data. In order to create an effective customer profile, advertisers often examine a combination of data types, such as:
• Signal data: This data is made up of what online consumers search for and the context in which they initiate searches. Signal data helps outline information including how users arrive at a business’s website and what pages they view while there. In addition, it shows how users leave the website, like by closing the browser or heading to another page.
• Profile data: This is demographic information about consumers. These types of demographics include user hobbies, favored news sites and customer status, among other details. This is gathered based on the types of sites visited and the products viewed frequently.
• Explicit survey data: This type of information is provided directly by consumers who fill out a survey. Advertisers ask questions relevant to their business and receive results right from the user. This information is highly valuable as it does not require as much interpretation as other types of data.
With all of this data, businesses can begin to form an idea of whom their customers are, and what they want. From there, it is possible to initiate custom marketing plans that both enhance user experience and generate higher profits.
Information privacy law or data protection laws prohibit the disclosure or misuse of information about private individuals. Over 80 countries and independent territories, including nearly every country in Europe and many in Latin America and the Caribbean, Asia, and Africa, have now adopted comprehensive data protection laws. The European Union has the General Data Protection Regulation, in force since May 25, 2018. The United States is notable for not having adopted a comprehensive information privacy law, but rather having adopted limited sectoral laws in some areas.
These laws are based on Fair Information Practice that was first developed in the United States in the 1970s by the Department for Health, Education and Welfare (HEW). The basic principles of data protection are:
• For all data collected there should be a stated purpose.
• Information collected by an individual cannot be disclosed to other organizations or individuals unless specifically authorized by law or by consent of the individual
• Records kept on an individual should be accurate and up to date
• There should be mechanisms for individuals to review data about them, to ensure accuracy. This may include periodic reporting
• Data should be deleted when it is no longer needed for the stated purpose
• Transmission of personal information to locations where “equivalent” personal data protection cannot be assured is prohibited
• Some data is too sensitive to be collected, unless there are extreme circumstances (e.g., sexual orientation, religion)