Five years ago, the digital world was shaken with the enforcement of GDPR (General Data Protection Regulation), a data privacy law that is stringent, and strictly protects user’s privacy in the European Union. Know the GDPR impact on Marketers in this blog.
Today, GDPR stands as a benchmark and inspiration for countries across the world. Every country is drafting user data privacy and protection laws in line with GDPR. Be it the existing California’s Privacy Rights Act (CPRA), the amendment to the California Consumer Protection Act (CCPA) or the latest India’s Digital Personal Data Protection Bill (yet to become Act), all of them have GDPR as the north star.
Let’s understand in detail what GDPR is, how it impacts marketers and how businesses can move forward with GDPR.
General Data Protection Regulation, the magna carta of the digital world!
The General Data Protection Regulation (GDPR in short) is a directive by the European Commission to safeguard personal data of people across the European Union. It is a regulation and not a law to be in enforcement by itself that is applicable from 25 May, 2018. It mandates all the countries under the European Union to establish national data protection authorities (DPA) and ensure implementation of GDPR in the respective countries.
GDPR comes straight out from the EU charter of fundamental rights that includes the right to protection of personal data of the citizens of the European Union. It ensures that no business collects data, shares or receives without the consent of the individual even for marketing purposes.
Who all does GDPR apply to?
GDPR applies to any business / organization/law enforcement agencies / any other body that deals with the data of the citizens of the European Union inside or outside the territory.
Here, the territory refers to the entire territory of the European Union. i.e., all the countries of the union. The United Kingdom, although exited from the EU, did bring in place a law that’s almost a replica of GDPR, called UK GDPR. Therefore, it applies even to the United Kingdom.
Key Principles of GDPR:
Article 5 of the regulation speaks about principles relating to processing of personal data. Of the seven laid out principles, four principles that businesses should be concerned about are:
- Purpose Limitation
- Data Minimization
- Storage Limitation
Purpose limitation is the ‘consent’ from the user for the specific purpose the data is collected. If the usage is changed, the consent is to be taken again.
Data Minimization: Process the data only to the extent needed. Nothing more.
Storage Limitation: Data is not to be stored for the duration more than it is needed for.
Accountability: The one who collects the data (organization or any entity) shall be responsible and accountable for the data collection, storage and others, to be in compliance with the laws.
Rights to the Citizens of the EU under GDPR
- Right of Access
- Right to Rectification
- Right to Erasure (Right to be Forgotten)
- Right to Restriction of Processing
- Right to Data Portability
- Right to Object
Consent And Opt-in
GDPR requires all the entities to have valid and explicit consent from the users for all marketing purposes. It is also mandatory that the user should give the consen freely and the user should be aware of whom the consent is given to.
Unlike other data privacy laws, GDPR is more stricter in its provisions that it does not have opt-out without opt-in. So, every entity must seek opt-in consent to collect, and process data. Without valid consent, the entity cannot use the user’s data for any purposes.
What is the impact of GDPR on Marketing?
- No More Precise Targeting?
With GDPR on, targeting based on a user’s profile and identity is no longer possible. Advertisers can make use of contextual advertising to target people based on the content they are searching for.
- Choice To Opt-out Every Time
When you send marketing emails, every email to have the option to unsubscribe (opt-out) and everyone who is receiving your email should have given you consent to receive emails or any other marketing communication (opt-in)
- No More Third-party Data
Businesses can no longer rely on data collected from third-party sources. Any business should collect the data with proper consent from the users i.e., first-party data.
- Hefty Fines for Non-compliance
If a business fails to comply with the GDPR provisions in relation to the data of the citizens of the European Union, the DPA can impose a maximum fine of EUR 20,000,000 or 4% of the world-wide annual turnover of the preceding year, whichever is greater. In the last 5 years, the DPAs across the European Economic Area have imposed more than 1500 fine amounting to a total fine of more than EUR 2.7 Billion
For instance, recently in May, 2023, the DPA of Ireland has slapped Meta with a fine of EUR 1.2 Billion.
How your business can comply with GDPR:
The fundamental of GDPR is to offer as much privacy as possible in terms of data. It is clear that without the clear consent of the user, businesses should not collect and use the data. This is the line which every business must keep in mind if they involve collection of data from the public.
It all starts with the first step, data collection
- Stop data collection from third-party sources
- Businesses should start seeking clear and conscious consent from the users even to collect their data for marketing or any other purposes. User-consented data is first-party data.
- Have MoUs for Mutual exchange of data between partners only after taking prior consent from the users. Ensure to inform the users how and with whom you share their data.
For example, imagine you are running a hotel and a tourist guide asks you to share the list of your customers who are going to stay in your hotel to offer them tourist services. You have to inform the customer prior, get the consent and only then share the data with the tourist guide.
Conduct Technology Audit to ensure how good your current systems comply with GDPR
- Implement cookie consent solutions on your website using cookiebot, cookieyes, cookiefirst, cookie-script, etc.
- Have robust technology to collect and store first-party data. Advanced technologies such as a customer data platform that is in compliance with GDPR can help. CustomerLabs CDP is one solution you can try.
Data storage and synchronization
- Store the data in compliance with GDPR. All your technologies and third-party partners who have access to your data should store the data in compliance with the GDPR.
- When sharing the data with third parties such as advertising platforms like Meta, Google, share the data in the required format so as to comply with GDPR.
What’s seen to come in the future:
The European Commission has proposed an advanced law in line with the General Data Protection Regulation (GDPR) to help boost the cooperation between the data protection authorities. Once this is passed, the existing delay in procedures which is helping businesses find loopholes will end.
Most countries are aiming to achieve the GDPR-standard laws in their own legislations. California’s CCPA is an inspiration for all of the United States of America, India’s Digital Personal Data Protection Bill is soon to become an act, and other similar legislations across the globe have proven that the world is moving towards a privacy-centric future.
Get your business in compliance with the GDPR by starting with equipping it with the perfect MarTech – CustomerLabs CDP | First-party data Customer Data Platform