Why digital trust is crucial to the success of your brand and the relationship with your customer

Julie Springer
October 11, 2022

Much like the internet itself, the term digital trust is still evolving. Global stakeholders are defining what digital trust means to companies and consumers alike. But one thing is for sure, with the increase in cyber attacks, transparency issues with regard to data collection and a general lack of accountability, conversations are being had about what the future of data collection, and the sharing of that data, look like. 

The results of our survey of more than 1,300 business leaders and 3,000 consumers globally suggest that establishing trust in products and experiences that leverage AI, digital technologies, and data not only meets consumer expectations but also could promote growth. The research indicates that organizations that are best positioned to build digital trust are also more likely than others to see annual growth rates of at least 10 percent on their top and bottom lines. - Based on a study by McKinsey & Company.

What is the privacy paradigm shift and how does it affect the digital ecosystem?

The digital landscape has changed drastically over the last couple of decades with regard to how it captures and uses data. With the progress of artificial intelligence (AI) and the methods used to analyze data, online brands have had an unprecedented opportunity to personalize a user’s online experience. 

For online brands, the ability to tailor the user’s experience and serve up digital ads in line with the user’s interests was a game-changer. Unfortunately, what began as a way to better the online experience quickly shifted to what some deem as unethical practices. 

After years of malicious practices, global consumers and politicians started to pay attention. Trust between stakeholders and brands began to decline. This lack of digital trust prompted the EU to create the General Data Protection Regulation (GDPR). The EU-wide regulation gave the power back to users to approve what data, if any, is being collected. 

In 2020, the United States followed suit. On January 1st of that year,  the California Consumer Privacy Act (CCPA) took effect. The CCPA gave California residents better control on how their data was collected and sold. California residents can also ask that their data be deleted and, if requested by the user, a website has to provide the information that has been collected going back 12 months. Further, that same user cannot be punished for making such requests and reserves the right to equal services and price. 

How personal data is collected and used

To gain greater insight on the current climate concerning data collection and privacy, you must understand how your information is collected and used. Cookies were created in the mid-90s for a way to help shoppers track their purchasing preferences. There are two types of cookies and two different ways your information is collected. 

A first-party cookie, placed on a website by the publisher of that site, collects user data on behalf of the publisher. The intent of the first-party cookie is to improve a user’s experience by leveraging a user’s preferences or settings. Examples of first-party cookie data collection would be usernames, passwords, and items added to a shopping cart. Personal information and preferences are stored on that website and not shared. 

On the contrary, third-party cookies are placed on a website by someone other than the owner (a third party) and collect user data for the third party. As with standard cookies, third-party cookies are placed so that a site can remember something about the user at a later time. Third-party cookies, however, are often set by advertising networks that a site may subscribe to in the hopes of driving up sales or page hits."Remarketing, the method used to show users ads regarding products or services they researched elsewhere, is based on third-party cookies. 

Where things start to muddy the waters are the other practices being used to capture and use personal data. 

In 2019, the Washington Post did a story about the number of websites that currently practice fingerprinting. It was noted that the top 500 websites people visit most, one-third use fingerprinting. 

Fingerprinting is another way to track a user online and allows publishers to create profiles of the user. Fingerprinting occurs in a rather aggressive manner. A website forces your browser to turn over information about your computer, your online preferences and even add-ons. This information is then used to create digital ads that follow you around the internet. Through fingerprinting, websites can uniquely identify users.

Other ways your information can be obtained and used is through a process called hashed emails. Hashed email addresses cannot be decrypted, therefore, your information is protected from nefarious organizations/people and your privacy is better protected.  For email marketers, this is a great way to better understand their stakeholders without infringing on their privacy. 

There are many benefits to using hashed emails versus cookies. Hashed emails are able to track across multi-devices (to include mobile apps) and multi-browsers.  

And finally, some websites implement tag-based contextual targeting whereby tags are used to provide a more targeted ad to the user. Ads are then served up based on context. For example, a user visits a sports website and suddenly a Nike ad is served up. 

What is the danger of the current digital ecosystem? 

Aside from privacy issues, dangers are lurking in the digital landscape. In 2021, the World Economic Forum published the Global Cybersecurity Outlook report stating that cyberattacks had increased 125% with no decrease in the foreseeable future. 

A lack of data protection coupled with a lack of transparency and questionable practices concerning user data have led to a decrease in digital trust. 

Even trusted brands aren’t absolved from ethical practices concerning data. Recently, the mega-makeup retailer, Sephora Inc., was under fire for violating the California Consumer Privacy Act. The company sold customer information without notifying the very people it was obtaining the information from. In all, Sephora paid heavy fines on several infractions to include not fixing the problem with the 30-day required timeline. 

So what’s next for the digital ecosystem?

The new era of privacy 

The phasing out of third-party cookies began a couple of years ago with browsers like Firefox and Safari ending the practice. 

In 2019, Google announced that they will begin eliminating the use of third-party cookies next year as they continue to work with marketers, publishers and retailers to create a system that doesn’t topple the digital ecosystem.

But what does this look like from a technology standpoint? Without the elimination of cookies, how can publishers, brands and online stores provide a tailored experience that consumers have grown accustomed to? And how can they provide that experience without treading on the consumer’s right to privacy?

Surprisingly, there is a solution to bridge the gap by leveraging artificial intelligence (AI) technology to collect deep behavioral data and micro-interactions a user has with a website. By analyzing user interactions, digital businesses can accurately segment first-party audience data while still offering real-time targeting and personalization, and all without obtaining personally identifiable information (PII) from the user. This is a win-win solution for both brands and consumers. 

And while this practice is relatively new, some data platforms are seeing great results that benefit consumers and online brands. The consumer receives a tailored online experience without divulging any personal information. Establishing that trust between consumer and brand is a win-win for both parties.