The agenda around online privacy has rapidly evolved as new technologies such as big data have enabled companies to utilise customer’s digital traces and data for strategic business purposes. This data is especially valuable in the marketing and advertising industry, as it can be used to offer more precise offerings. However, possessing and processing such vast amounts of data have also resulted in an increase in online privacy concerns. As a result of these developments, privacy has thus become a topic of supranational interest and has resulted in the development of laws such as the ePrivacy Directive and GDPR in Europe. The introduction of such laws has fundamentally disrupted the marketing and advertising industry, as it has created restrictions regarding how data can be used for marketing communication purposes.
The agenda around online privacy is contemporary of nature and is a topic which evolves and changes on a continuous basis. As the topic has impacted the Danish business world and has not been thoroughly investigated previously, we found it relevant to examine this. With this project, we have thus sought to explore how online privacy concerns shape digital marketing communications within the Danish marketing and advertising industry.
As the aim of our research was exploratory in nature, we adopted a qualitative research approach.
We initially built a literature review based on extensive research within the topic of interest and then used the findings to guide the empirical investigation, i.e. semi-structured interviews. The interviews were conducted with the intention to explore how the topic was understood by people working with it on a daily basis.
Drawing from both our findings in literature and the results of our empirical study, we identified a wide range of interrelated themes which all play into the topic of investigation. From the empirical investigation, several topics related to communication were emphasised. We thus found it necessary to make sense of these findings in relation to their influence on communication. To do so, we used Shannon & Weaver’s mathematical model of communication (1949) to illustrate the overall impact our findings have for the communication between businesses and consumers.
Throughout our research and interaction with industry professionals, we got many useful insights.
These results led us to develop practical recommendations for businesses.
While the project principally focused on the marketing and advertising industry, it ended up revealing important results for any business interacting in the digital marketplace. However, due to our philosophical considerations and the exploratory nature of our project, our findings are not conclusive but rather provide useful insights for understanding the complex topic in more detail.
In order to investigate the above research question as well as to provide some structure to the research process, we found it beneficial to build our research around five pre-determined research objectives.
The first research objective was to investigate how technological advancements have transformed communication between companies and consumers. Through the advancements of technology and utilisation of customers’ digital traces for business purposes, online communication has become increasingly complex, as more actors are involved and interposed in the communication process.
This change can be regarded as one of the reasons for the increase in privacy concerns, as it interferes with the direct communication between companies and consumers. Privacy in itself has manifested as being a dynamic and complex concept, which has evolved due to technological advancements.
The second research objective was to evaluate what affects customers in disclosing information online. Disclosing information online has proven to be a complex process in which the value customers place on their privacy plays an important role. This relates to the concept of privacy calculus, i.e. the rational cost-benefit analysis customers go through when evaluating the benefit gained for disclosing their information online. However, our study suggests that many people do not read privacy policies and therefore do not really know what is at stake. This emphasises that also irrational motives play into the process of disclosure. Our study further provides empirical evidence for the privacy paradox, as it confirms that there are inconsistencies between human opinion and actual behaviour. This result underlines that in order to really understand how people navigate online, their behaviour needs to be studied rather than employing research methods, which involve directly asking them. Our study also finds evidence for the knowledge gap hypothesis and highlights that education of consumers regarding the online space is required.
The third research objective was to investigate whether privacy regulations such as GDPR and the ePrivacy directive have impacted the way the marketing and advertising industry operates. Our empirical study underlines that GDPR and cookies have not had a strong impact on the marketing and advertising industry. It rather emphasises that GDPR and its implementation is questioned, as privacy policies and cookie policies prove to be ineffective for consumers, whilst forcing companies to spend a lot of resources on becoming compliant. Our research therefore suggests that an evaluation of whether GDPR actually matches its intended purpose is needed.
The fourth research objective was to outline how businesses can address privacy concerns of their customers. Our study finds evidence for the importance to address privacy concerns, especially in the future. Throughout our research it became evident that businesses should have clear principles as to how they work with data, ensuring that the data is treated securely. These principles should be outlined in a clear privacy policy that is easy to understand. These discovered findings served as helpful when examining the fifth research objective.
The fifth research object was to recommend how companies can adjust their communication in a privacy-conscious world. Through the insights gained from our empirical investigation, we were able to develop practical recommendations for businesses. The recommendations emphasise that businesses should focus on establishing a direct connection with their customers in order to reduce privacy concerns and to strengthen the relations with their customers. Businesses can do so by empowering the customer through transparency and control and through this, build trust. In this regard, we therefore recommend building the business strategy around first-party data, as it can foster a more direct line of communication between the business and customer.
Turning back to our overarching research aim to investigate the effects of privacy concerns on digital marketing communications, the above remarks are an indication of how the evolution of privacy has changed not only the marketing and advertising industry, but rather the online marketplace in general. It has made it more difficult for businesses to convince customers to disclose their information. This highlights that businesses must not only adapt their communication to fit with the changes in the market but shall also re-evaluate their data collection methods and possibly reconsider their business strategy.