Common privacy issues in digital marketing and best practices to prioritize Privacy-Led Marketing

The ability to gather and use consumer data enables marketers to deliver personalized experiences and improve campaign performance. However, it also raises significant questions about security, transparency, and consent.

Consumers are increasingly aware of how much their data is being used and in what ways, not to mention the rights they’ve been granted under increasing data privacy laws. They are demanding more control. Therefore, governments are enacting strict regulations that govern data privacy and require businesses to reconsider their marketing practices and how they handle personal information.

Let’s explore common privacy issues in digital marketing, including regulatory compliance, data breaches, and invasive data collection practices. We’ll also cover actionable best practices to help your company overcome these challenges while fostering trust with your customers.

The impact of privacy regulations on digital marketing

The regulatory landscape surrounding data privacy has rapidly evolved in recent years. Landmark regulations like the General Data Protection Regulation (GDPR) and the California Privacy Rights Act (CPRA), along with well-established laws like Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA), represent a shift toward greater consumer protection. These regulations and other global privacy laws have fundamentally changed how businesses approach privacy in marketing.

The GDPR, which was implemented in 2018, sets stringent guidelines for collecting, processing, and storing personal data. It requires businesses to obtain explicit consent from users before gathering their personal information and grants individuals the right to access, correct, or delete their data.

Similarly, the CPRA gives California residents the right to know what personal information companies are collecting, the right to request data deletion, and the ability to opt out of selling their data.

The impact of these regulations extends to various marketing channels. Affiliate marketing compliance, social media compliance, and email marketing compliance have become increasingly important for businesses to consider.

These regulations aren’t just legal hurdles. They directly affect how companies manage and collect marketing data. Now, businesses need to be careful to adhere to marketing compliance requirements while still using data to create personalized marketing and gain insights. This tricky balance between following the law and reaching marketing objectives often requires carefully calculated tactics, like data minimization practices.

Common digital marketing privacy concerns

With the rise of data privacy laws, businesses must confront several common issues in their digital marketing practices. These challenges range from potentially invasive data collection methods to the complexities of obtaining clear and informed consent from users. Many of the strategies employed by marketers in the past simply aren’t viable anymore.

Transparency and user consent

Providing transparency and obtaining valid user consent are core principles of privacy regulations like the GDPR and CCPA, yet many businesses struggle to obtain compliant consent from their users. One major issue is the use of dark patterns. These deceptive design strategies can manipulate or trick users into consenting to data collection or agreeing to terms they don’t fully understand.

For example, pre-ticked checkboxes or deliberately confusing language can pressure users into sharing more data than they might be comfortable with. Sometimes choices aren’t presented at all. These tactics are increasingly frowned upon by authorities and consumers and are starting to be referenced in more laws to prohibit them.

Additionally, lengthy and convoluted privacy policies discourage users from fully understanding how their data will be used and by whom. All data privacy laws require companies to provide clear information on data collection, use, and sharing. Increasingly, individuals are more impatient and less willing to do business with companies they don’t feel they can trust.

Increasingly, transparency isn’t just a legal requirement; it’s essential for earning consumer trust and positioning your business for sustainable growth.

Data breaches and security risks

As businesses collect more personal information, they also become targets for cyberattacks. In recent years, both the frequency and severity of data breaches have increased, exposing the sensitive personal information of millions of users.

Data breaches are caused by a variety of vulnerabilities, including:

• Insider threats: Employees with access to sensitive data may unintentionally expose or deliberately misuse it. 
• Hacking: Criminals can infiltrate an organization’s internal systems and illegally obtain or damage information.
• Malware: Hackers use malware that can track and record keystrokes, as well as modify and destroy data or lock staff out of systems.
• Employee mistakes: Mistakes, such as sending sensitive information to the wrong email address or losing a device that contains personal data, can expose an organization to data breaches.
• Physical theft: Stolen devices like laptops, USB drives, and smartphones can lead to unauthorized data access.

The consequences of a breach go beyond financial losses. For businesses, a major concern is the subsequent loss of consumer trust. Many studies have shown that consumers would stop engaging with a brand online after a data breach. Even several years ago the number was over 80 percent of people surveyed, and it’s fair to assume that number has only gone up. 

More data privacy laws also make it easier for consumers to take their data with them when they leave a company — possibly for a more trustworthy competitor — so there is extra urgency in data security and building trust.

Rebuilding customers’ trust may require significant investments in security, public relations, and customer reassurance—resources that many businesses do not have — and there’s no guarantee it will work or at least work in time for the company to recover.

Consent and opt-out options

Obtaining clear, informed consent for data collection is a challenge for many marketers, particularly if they work for enterprise organizations that need to comply with multiple and potentially overlapping privacy regulations. Providing easily accessible opt-out options and respecting user preferences is essential, but can be difficult to manage across various platforms.

Without effective consent management, users may question if their privacy is being respected, which can lead to a backlash. The GDPR, for example, requires that companies provide an opt-out mechanism for data collection that is as easy as opting in. Failure to provide simple opt-out options can result in hefty fines, as well as damage to your brand’s reputation.

Invasive data collection practices

Data is the currency of digital marketing, and the ability to track and analyze consumer behavior has made it possible for marketers to create more personalized campaigns. However, invasive data collection is one of the most common privacy concerns in digital marketing today. Many consumers feel that companies ask for — or just take — far more personal data than they actually need.

The use of third-party cookies is a major contributor to the problem. These cookies enable advertisers to track users across multiple websites and build comprehensive profiles based on browsing behavior. While this practice enables advertisers to serve hyper-targeted ads, it also raises ethical concerns.

Many users are unaware of the extent to which their data is being tracked, and in some cases, this tracking continues even after they’ve left the site. Functions like retargeting can lead people to believe that they are being spied on by companies and devices across the internet, which can have the opposite result of converting a prospect.

Challenges of using third-party data

Marketers have long relied on third-party data to drive targeted advertising. This data, which is collected from various external online sources, helps businesses deliver personalized ads to consumers based on their online activity. However, using third-party data is becoming more risky and less reliable as privacy concerns grow. It has long had consent issues for its collection and use as well.

As a result, third-party cookies, which are widely used for tracking users across websites, are being phased out. Major web browsers are eliminating support for these tracking cookies, or making their use optional, making it harder for marketers to monitor users online this way.

Another issue with third-party data is data determining provenance. Businesses often don’t know exactly where the data comes from or whether it was collected with proper user consent as it is frequently aggregated before they receive it. If a company uses third-party data collected unethically or without the user’s knowledge, it still risks violating privacy regulations and damaging its reputation.

To adapt, many businesses are turning to first-party data, which is information collected directly from consumers through interactions with the brand. First-party data, such as purchase history and website activity, is more reliable and better complies with privacy laws.

There’s also zero-party data, which is not collected via cookies. This is information that users willingly share with companies, such as via survey responses, account settings, or selected communication preferences. It’s a valuable asset for businesses aiming to better understand their customers and deliver the experiences they want without infringing on their privacy.

7 best practices for privacy in digital marketing

People desire control over their online data, but may feel limited when submitting their preferences. They may think that if they don’t consent to certain aspects, their overall experience will be lessened. However, if your company is open and transparent about what data you want and why you want it, and demonstrates over time that you respect privacy in how you use it, you’ll build a stronger relationship based on honesty and integrity.

Here are some ways to prioritize ethics when collecting or using personal data.

Obtain clear and informed consent

Gaining explicit and informed consent should be a cornerstone of your data strategy. Customers need to fully understand what data you’re collecting, why, and what their options are. To communicate this, use straightforward, jargon-free language when explaining your data policies. Give users clear, concise explanations, particularly at the point of data collection, instead of only burying key information in longer and more complex privacy notices.

Also, make sure that your consent mechanisms are easy to navigate. Buttons, toggles, or checkboxes for both providing and withdrawing consent should be prominent and straightforward. This approach builds a foundation of trust and transparency, making users more likely to share their data willingly, knowing they remain in control, and can change their minds in the future.

Implement data minimization techniques

Only collect the data you need for specific marketing purposes. The less data you collect, the less data is at risk in the event of a breach, and the easier it becomes to manage compliance with privacy laws. Limiting your data collection to essential information also helps clarify the value exchange between you and the customer. They know you’re not overreaching for unnecessary details. This reinforces your commitment to responsible data usage and aligns with consumer expectations of privacy.

Shift to using first-party data

First-party data, collected directly from your customers through their interactions with your brand, is far more reliable and easier to make privacy-compliant than third-party data. It enables you to develop more meaningful insights into your customers’ preferences and behavior because it can be gathered with full transparency from you.

Whether through email subscriptions, purchase history, or direct website interactions, first-party data can be ethically sourced, reducing the potential for violating consumer privacy.

Be transparent about your data usage

Transparency creates trust. Let your customers know exactly what data you collect, how it will be used, who will have access to it (especially third parties), and why. Include whether it’s for personalizing content, improving services, or targeted marketing offers.

Additionally, make it easy for customers to opt out of data collection or modify their preferences at any time. Providing a visible and accessible privacy preference center enables users to adjust their consent settings as their relationship with your brand develops. This ongoing transparency reassures customers that you respect their privacy and gives them the flexibility to control their data access whenever they want.

Use consent management tools

Using a consent management platform (CMP) can simplify and streamline your compliance with data privacy regulations. CMPs help you obtain and manage user consent in a transparent and organized manner, enabling customers to easily opt-in or out of data collection.

These tools provide companies and users alike with customizable options, like geolocation functionality that shows texts and options for the right regulation to the right regional audiences. Or enables users to specify granular consent, like agreeing to analytics cookies but not marketing cookies, for example.

By implementing a consent management solution, you reduce the risk of violating privacy laws or business requirements like those from ad platforms, while boosting customer confidence.

Offer alternative communication channels

To respect customers who prefer not to share data, offer alternative ways to engage with your brand. These could include newsletter signups that provide a lot of value but don’t require a lot of data, enabling customers to browse certain areas of your site without cookie use, or using contextual consent, where you only ask for specific consent for a function’s use, like playing an embedded video.

By offering different types or levels of interaction, you show that you respect user privacy preferences while still providing value. This kind of flexibility is key in maintaining relationships with privacy-conscious users who might be uncomfortable sharing too much information.

Communicate the benefits

One of the most effective ways to encourage customers to share data is by clearly communicating the value they will receive in return. Let them know how sharing their information will result in a more personalized experience, exclusive offers, communications via their preferred frequency and channel, or enhanced customer service. When users understand the benefits, they may be more inclined to consent to data collection.

However, this communication mustn’t be manipulative. It should be a clear, honest exchange that aligns with your users’ privacy expectations, and what users receive should be comparable to what they’re providing. Incentives can’t look like bribes. Demonstrate how sharing their data will enhance their experience to foster a sense of trust and mutual benefit.

Prioritize digital marketing and privacy requirements

The digital era has given companies more control over their own marketing and access to consumers than ever before. However, businesses must prioritize consumer privacy in their digital marketing efforts.

By adopting ethical data practices, moving away from third-party data, and focusing on transparency, your business can not only remain compliant but also build lasting trust with your customers. These are the keys to sustainability and growth. Data privacy actions and compliance aren’t just legal requirements, they’re key factors in maintaining brand loyalty and a competitive advantage.