Interview by Andre Hawkins (@andyjayhawk) - The Verge (9/26/2019)
For Uber, increasing user engagement in their Mobile App is the key to a better return on investment.
"We will be able to monetize it one way or another" says Uber CEO (1).
In post General Data Protection Regulation (GDPR) era, marketers are struggling to make use of third-party data pushing the first and second-party data adoption to new heights. Under GDPR, companies are required to gain explicit consent from their customers to collect and share their personal information. Third-party data is aggregated from various sources bought and sold on data exchange markets. Often buyers of third-party data have no means to verify how the data has been collected, and if the consent was obtained making it useless for any legitimate use.
Second-party data, on the other hand, is obtained from the collectors directly making it transparent and secure. In 2018, LOTAME, a data management platform, registered a 460% growth in second-party data adoption globally (2).
But, first-party data is regarded as the "Holy-Grail" for marketers:
"First party data is defined as data that your company has collected directly from your audience -- made up of customers, site visitors, and social media followers. "First party" refers to the party that collected the data firsthand to use for re-targeting." Lotame (3).
As explained by Uber's CEO, the pure quality of data allows companies to better understand their customers and eventually achieve a stronger return on investment (ROI). With machine learning and predictive analytics, companies are now able to predict their customers' patterns and personalize content and advertisements.
In 2019, the average U.S. adult will spend 2 hours and 55 minutes per day on their smartphone (4). The more time you spend in an app, the faster the machine will learn about your online behavior.
While the GDPR and the soon to take effect California Consumer Privacy Act (CCPA) aims to protect the right of consumers to freely navigate the web without being followed and harassed by unsolicited advertisements, no regulation is in place yet to control or limit the use of data "consensually " obtained. After all, Cambridge Analytica didn't break any laws by harvesting the personal data of millions of Facebook users. Using complex terms of use, companies are free to aggregate, track, and make sense of their users' digital interactions to increase their ROI. Their excuse is that it is the "right thing to do" in order to provide better services to consumers.
On the other hand, policymakers are now looking at ways to curb design techniques responsible for the proliferation of technology addiction and its harmful consequences among users. In July 2019, Senator Hawley of Missouri introduced a bill to do just that (5). The bill referred to as the ‘‘Social Media Addiction Reduction Technology Act’’ or ‘‘SMART Act’’, if enacted, will prevent social media companies from using techniques such as infinite scroll and autoplay. It will also force companies to proactively limit the time users spend on their apps and be more transparent about their usage.
It is without a doubt that the time has come for technology companies to join forces with regulators and privacy advocates to find better ways to collect, use, and share data in a responsible manner.
Sources:
(1) https://youtu.be/CrnVoJ358bo
(2) https://www.lotame.com/lotame-sees-460-growth-in-second-party-data-adoption-globally-in-2018/
(3) https://www.lotame.com/1st-party-2nd-party-3rd-party-data-what-does-it-all-mean/
(4) https://www.emarketer.com/content/us-time-spent-with-mobile-2019