COMMENTARY

CCPA: Turning Pain Into Progress

• by Pam Erlichman , 3 hours ago

The California Consumer Privacy Act, which goes into effect on Jan. 1, 2020, will bring about a seismic change to the use of data in U.S. marketing. Though its rights apply only to consumers in California, it will have far-ranging implications for companies beyond the Golden State -- and the CCPA is only the tip of the iceberg when it comes to data privacy legislation at both a state and federal level.

Any marketer’s first response to the CCPA is likely negative: fear over its potential impact on the effectiveness of ads, and stress and frustration with the new demands of compliance.

However, marketers will be much better served to take a different approach to the new policy, looking at it as an opportunity for game-changing progress rather than a set of boxes that need to be checked. Companies that seek only to keep up with the new regulations will fall behind those forward-thinking companies who choose to use the CCPA as a springboard to their own better, more effective data practices.

What’s Happening?

The explosion of data usage in marketing has often resembled the Wild West, with marketers purchasing data from questionable sources, in turn achieving questionable results.

The CCPA introduces concrete restrictions on the use of consumer data, giving consumers the right to know what companies will do with their information, as well as the right to view, delete, or opt out of the sale of their data. These obligations will require companies to disclose their practices at any point where personal information is collected, and it will mandate that they be operationally equipped to meet consumer requests with regard to the sale of their data.

CCPA requirements don’t just apply to companies with a physical footprint in California as for-profit companies which collect or sell the data of Californians will also need to comply, depending on the scope of their business. Estimates anticipate around 500,000 companies will be affected by the legislation

A Privilege, Not a Right

As a result, the CCPA offers a valuable opportunity for marketers to refine their standards and practices for collecting and selling data—in California and beyond. Most importantly, they must bear in mind the fundamental change of data’s role in the marketing ecosystem. While previously functioning as a commodity that can be bought and sold, from the perspective of CCPA, data must now be viewed as a privilege granted by consumers to marketers that can be revoked at any moment. If enough consumers rescind that privilege, it will have disastrous effects for marketers, badly hurting the reliability of third-party data and severely limiting the effectiveness of targeted ads.

While painful in the short-term, consumers’ newfound power forces marketers to abandon objectionable data practices and focus instead on explicit first-party data -- far more accurate information that yields more actionable marketing insights. And the new data dynamic forces an implicit value exchange, in which the consumer is incented to provide information in exchange for a better customer experience.

What’s Next?

While CCPA stands at the vanguard of data privacy legislation, it’s a near certainty that marketers will face new regulations in other states and possibly even at the federal level. During these early stages when CCPA is the only game in town, marketers must stake out an aggressive forward-looking position, with healthy consumer-first data practices and strategies. Embracing the new world of consumer data rights will allow companies to take control of their marketing destiny, instead of adjusting to each new law and playing catch-up in a constantly shifting regulatory environment.