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When Did Companies Start Collecting Data?

When Did Companies Start Collecting Data?

Data has been the core of any marketing strategy since the beginning. But as technology has advanced in the past few decades, so has the data-driven marketing strategy. In fact, we lost track of when did companies start collecting data to plant their marketing. In this article, we are talking about data collection by companies. So let’s get to it:

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Companies begin collecting data through commerce

Data about consumers has long been gathered by businesses. Keeping track of who purchased what at what times allowed vendors to plan their sales accordingly. At first, it was done through simple observation, noting information about a consumer, like when they were shopping and what they purchased.

Businesses would use the knowledge gained through observations to implement their marketing strategies. Although they could draw connections between their advertisements and customers’ in-store activities, the information was still largely conjectural. Once tracking could be done electronically, business owners began gathering detailed customer data and developing more accurate projections. Marketing that was driven by data was coming.

Below is a look at some of the methods businesses use to collect customer data, what they do with it, and how you might adapt these strategies to meet your company’s requirements.

What kind of data do companies collect?

Companies are gathering more information than your name, birthdate, and address. So, what kinds of data do companies collect?

The four categories of customer information that businesses gather are as follows:

1. Personal information

This group includes personal identifying information, including Social Security numbers and age, and nonpersonally sensitive data, like your IP address, internet browser cookies, and system IDs that all your smart gadgets have.

2. Engagement data

This type of data describes customer interactions with a company’s website, mobile applications, texts and emails, social network pages, forums, sponsored advertisements, and customer care channels.

3. Behavioral data

This group comprises data from previous transactions, such as purchase patterns, data about how a product was used, like repetitive behaviors, and qualitative techniques.

4. Attitudinal data

This type of information involves assessment for client satisfaction, buying criteria, product appeal, and much more.

How do companies collect your data?

Businesses get data from numerous sources in a variety of methods. Although some data gathering techniques are extremely technical, others are more logical.

Customer information may be gathered in three ways:

1. Directly asking customers

2. Implicitly monitoring customers

3. Supplementing your own customer information with data from external sources.

A successful company system involves all three methods.

Businesses are skilled at gathering data of various kinds from almost any source. The most apparent sources include consumer behavior on their websites and social media sites, customer texts, calls, and chat support. Still, there are also other, more intriguing techniques in play.

One illustration is location-based marketing, which creates a tailored data profile using tracking technology like an internet-connected device’s IP address. Using this data, the users’ devices are then targeted with hyper personalized, pertinent marketing.

Companies also delve deeply into their customer support databases to learn more about how customers have previously dealt with sales and support teams. Therefore, they are taking into account, on a large scale, direct input on what customers liked and disapproved of, what succeeded and what didn’t.

Companies that sell customer data and similar information to third-party sources have grown prevalent, in addition to gathering information for business objectives. Once obtained, this data frequently trades around in a particular data market.

How do they use the data they’ve collected?

There are a number of ways to use customer data. Below are some of the methods:

Turning data into a knowledge base to create a better product or service

Companies turn the sea of data into manageable information to enhance their products and services. But the challenge of organizing and evaluating massive amounts of data is apparent. No individual can spend all day reading through pages and paragraphs of consumer data, and even though they did, it’s doubtful they would create much of a contribution.

But computers can process this information more rapidly and easily than people can, and they can work nonstop for a full year without taking a vacation.

So companies leverage Artificial intelligence and advanced algorithms to sift through a pool of data and turn it into manageable and useful information. In addition, based on contextually relevant data, some AI applications will alert decision-makers inside a company to irregularities or suggest actions. Without programs like these, every piece of data ever collected would be completely meaningless.

Improving the companies’ customer experience

Consumer data presents a means for many businesses to enhance client interaction and further know customer requirements. Companies may quickly adapt their online presence, products, or services to fit the current industry if they study client behavior in addition to vast quantities of reviews and comments.

Companies use customer data to make choices on a personal level in addition to using it to enhance consumers’ overall experiences.

By developing personalized promos and limited-time offers based on consumer information, a business can enhance the customer experience. Personalization is crucial because each consumer will have their own unique tastes.

Planning an effective marketing strategy for the target market

Companies that use relevant and meaningful data can better understand how customers interact with and engage with their marketing programs and make necessary adjustments. This extremely accurate use case helps organizations estimate customers’ want based on past behavior. Sales promotion is increasing about customization, just as in other areas of consumer data research.

It is increasingly crucial to map consumers’ trips and personalize them as they go from your website to other social media websites.  You may advertise to only the individuals you understand are most likely to respond by successfully dividing data. These have created brand-new opportunities in previously extremely difficult sectors to sell to.

To secure more sensitive and contextually relevant data

Even some companies use customer data to secure more sensitive or confidential information. For instance, banking institutions occasionally use speech recognition data to allow users to view their financial records or shield them from unauthorized efforts to steal their data.

The combination of information from a customer’s customer service conversation, machine learning techniques, and monitoring technology allows these systems to detect and flag unauthorized activities to acquire a customer’s account. 

Businesses will discover novel and more efficient methods to gather and interpret data about everything, particularly consumers, as data collection and analytics technology advance. For firms to be successful, doing this is crucial; failing to do so is equivalent to performing a task with your hands bound together. In the contemporary business world, information is the supreme ruler, and insight is gained via contextually relevant data.

Putting a price on data

Businesses that collect data can benefit from it. Following the growth of big data, a new business called “data brokers,” or “data service providers,” has emerged. These companies buy and sell customers’ information. Collecting and marketing present prospects for new sources of income for companies that collect a lot of data.

The desire for additional data is rising since advertisers value this data highly and will invest in it. In other words, data brokers may increase their profits by providing this data to each other and advertising if they can assemble more comprehensive data accounts from a wider range of data sources.

The Takeaway?

Data collection is at the core of every marketing strategy. Turning a pool of information into meaningful data is the ground reality of every business. A business can generate revenue with useful customer data.

Michiel Top
Michiel Top
While working on strategic positioning, marketing and sales programs for various companies, I was shocked again and again by how easily accessible private information actually is. Around 2017, when I was designing an online customer management system, it occurred to me how we could turn the tables. Then in mid-2020, when my own GDPR application to a well-known data enrichment company failed, I knew something had to be done.
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7 Differences Between Europe vs United States Data Privacy Laws

7 Differences Between Europe vs United States Data Privacy Laws

In this digital world, everything we do online leaves digital footprints, due to which many users are concerned about the data privacy issue. The concern is valid; every country is taking a different approach to protecting data. 

Large countries and organizations such as Europe and the United States show commitment to digital privacy and they’re focused on data protection with current legislation and enforcement actions. In this article, we’ll discuss the difference between Europe vs United States data privacy laws and their approaches toward data protection. Let’s begin!

Table of Contents

In this digital world, everything we do online leaves digital footprints, due to which many users are concerned about the data privacy issue. The concern is valid; every country is taking a different approach to protecting data. 

Large countries and organizations such as Europe and the United States show commitment to digital privacy and they’re focused on data protection with current legislation and enforcement actions. In this article, we’ll discuss the difference between Europe vs United States data privacy laws and their approaches toward data protection. Let’s begin!

The European Union’s GDPR

The European Union implemented its privacy law as General Data Protection Regulation (GDPR) which went into action on 25th May 2018. The law applies to all businesses in or out of the European Union that process the data of European citizens. 

GDPR is a legal framework that regulates data privacy for every member and gives them control over how their personal data is accessed and used.

The United States, under CCPA

CCPA (California Consumer Privacy Act) is the first significant data privacy law that emerged in the United States to give individuals greater power over their information. CCPA took effect on 1st January 2020. 

According to International Comparative Legal Guides, the United States has various state and federal laws to protect citizen data and privacy. Therefore, CCPA was enforced in the wake of GDPR to increase transparency and give users better control over how organizations collect and use their sensitive data. 

Europe-United States Privacy Shield Framework

The United States Department of Commerce and European Commission designed the Europe-United States privacy shield framework. The Europe United States privacy shield ensures that organizations maintain high data protection. This shield framework is an agreement about data protection & privacy practices between the United States and Europe. The entities that want to engage in this practice must be certified under Privacy Shield.

The Federal Trade Commission and the United States support enforcement and monitoring. But the organizations that don’t meet standards are excluded from doing business with the European Union. Also, if they violate court or administrative orders, they are fined for it. 

Furthermore, the United States President and European Commission announced an agreement on 25th March 2022 in a joint press conference known as Trans Atlantic Data Privacy Framework (Privacy Shield 2.0). This agreement was made to replace the original Europe-United States privacy shield framework and address concerns of the European Court of Justice in the Schrems II decision. Also, it is intended to provide more excellent protection of data.

7 key differences between Europe vs United States data privacy laws

The European Union’s GDPR, General Data Protection Regulation, and (CCPA) California’s Consumer Privacy act are the first data privacy laws in the United States and Europe. Both laws protect users’ data privacy rights, but they have major differences. Let’s take a look at data privacy laws on both sides to find out fundamental differences between Europe vs United States data privacy laws.

1. The entities subjected by the law

GDPR law applies to all businesses, including non-profit organizations, companies, or any entity that collects consumer data in Europe.

On the other hand, CCPA applies to any for-profit entities that target California residents and meet at least one of the following:

  • Earns over $25 million in annual gross revenues.
  • Buys, sells, collects, or shares the personal data of at least 50,000 consumers and householders for commercial purposes.
  • Earns 50% of their yearly revenue by selling this data.

2. The data types being protected

CCPA protects data that relates to, identifies, or links with a household, individual, or device. In addition, it does not protect the publicly available data and medical & personal information recorded by the federal and state. 

Conversely, GDPR protects all types of personal data that relate to individuals & used for commercial purposes. However, it does not include anonymous data, non-automated data, and data for personal or household purposes.

3. Cookies usage

Another key difference between Europe and United States privacy laws is cookie consent. Under both CCPA and GDPR, websites must disclose the cookies’ information, their type, why they’re used, and how to manage or delete them.

CCPA rules are not as strict as GDPR in terms of cookie usage. In GDPR, opt-in consent is mandatory to use cookies that collect or track personal data. Unlike GDPR, CCPA does not require websites to ask for permission to use cookies and store cookies, and it only makes opt-out essential for the cookies that sell personal data. 

4. Information disclosed to the users

Transparency is a typical requirement among Europe and United States privacy laws, and both privacy laws require businesses to inform the users when their data is disclosed, collected, and used for business purposes. However, there’re minor differences in the information needed to disclose to users.

According to CCPA requirements, organizations must inform users when their personal data is used or stored after 12 months. Also, if any third party sells data to another third party, they’re liable to inform the users.

Furthermore, GDPR requires that businesses inform users when their data is collected & used and how long their data will be retained. Besides, when entities share the users’ data with a third party, they will have to notify them no later than a month.

5. User’s rights to opt-out

 CCPA allows organizations to give opt-out choices to users, and they can object to their data collection. Moreover, businesses must add a DNSMPI (Do not sell my personal information) link on their website pages where individual data is collected. If users opt-out, companies are not allowed to collect data for a year.

In terms of user rights, GDPR requirements are similar to CCPA. Meanwhile, the European union’s privacy laws give users the freedom to opt-in and opt-out, and users have a chance to withdraw consent and object to the collection of their information.

6. Penalties applied for violation

CCPA charges penalties of $2,500 for unintentional violations and $7,500 for intentional violations. California state court imposes the CCPA fines.

GDPR charges fines depending on the nature of the violation- up to €10 M or 2% annual global turnover for lower-level violations and up to €20 M or 4% annual global turnover for high-risk, severe violations. Also, users have the right to sue in both data protection laws.

7. Legal grounds for data processing

The last difference between Europe and United States privacy laws is their legal basis for data processing. GDPR requires websites to have a lawful basis for processing personal data in the Europe. Here are six legal bases for processing data:

  • Consent
  • Legal obligation
  • Contractual obligation
  • Organization interest
  • Public interest
  • Vital interest

On the other hand, CCPA does not require such a specific legal basis. Organizations under CCPA can process data for any purpose, however, not in a deceptive manner.

Final Thoughts

There you have it- seven key differences between Europe and United States privacy laws. Both data protection laws have global reach and are renowned pieces of legislation. Also, they’re focused on creating a secure environment that emphasizes privacy and transparency. However, GDPR has strict rules, and the European Union has prioritized citizen data protection. While the United States is also searching for top data privacy solutions to move with time and technology.

Did we miss any difference between both privacy laws? Need any kind of help related to data privacy issues? Let us know in the comment section below, or feel free to reach out. Your Digital Self would help you discover technical solutions to secure your digital privacy.

Michiel Top
Michiel Top
While working on strategic positioning, marketing and sales programs for various companies, I was shocked again and again by how easily accessible private information actually is. Around 2017, when I was designing an online customer management system, it occurred to me how we could turn the tables. Then in mid-2020, when my own GDPR application to a well-known data enrichment company failed, I knew something had to be done.
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Understanding What is Your Digital Identity And 4 Important Steps To Control It

Understanding What is Your Digital Identity And 4 Important Steps To Control It

Nowadays, digital identity is the heart of any data-driven organization. While you cannot present paper documentation to support that you are who you claim to be online, your digital identity can still be used.

Let’s picture it.

For example: you’re driving your vehicle and happen to cross a red light. If a police officer stops you he will asks you to verify that you possess the car and have the legal right to operate it. You can respond by providing identification documents like your license and registration documentation.

But what takes place when you communicate online? You are unable to complete the same task using your paper files. Those prerequisites would be met by a digital identification. So let’s learn more about what is your digital identity and ways to control it:

Table of Contents

Definition of digital identity

A more formal definition of what is your digital identity is a connected or online identity that a person, business, or electronic equipment acquires or claims in virtual worlds. Through various networks, these users might also project several digital identities. The two main issues with digital identity control are security and confidentiality.

What is considered your digital identity?

A digital identity is made up of features, or data attributes, such as:

·         User ID and password

·         Social security number

·         medical background

·         Purchase patterns or history

·         Online search activities, like commenting on different posts, transactions, and search preferences

Your distinct identity among users of the Internet is your digital identity. It includes specific traits and characteristics that are particular to you.

For instance, you can identify yourself by your first and last names, birth dates, and occupations. Your first and last names don’t necessarily make you special, as there might be many individuals with the same particulars.

You, therefore, require additional identification, such as your birthdate. In this manner, it will be obvious that identity, such as an email address, relates to you. These identifiers are permanent; they don’t change throughout your life.

Some ids are changeable while others are static. Like your job description, they are subject to frequent modification. These distinguish you in a particular situation from other people. But in a virtual space, they don’t always identify the genuine person. Rather, each identifier contributes to the creation of your online identity. This digital identity can then serve as a record, enabling people to recognize the true you online.

The use of digital identity

Businesses can benefit from developing and maintaining digital identities in several ways. Among them are:

Banking

Businesses can safeguard login and transaction data for their clients by establishing highly secured identities. Since this is the foundation upon which eCommerce systems and finance platforms are built, this protection is essential.

eCommerce

To decrease fraud cases and encourage customers to do business with them, it is crucial for eCommerce platforms to protect their customers’ digital identities. Additionally, it enables them to improve the user experience.

Gambling and gaming

Businesses can prevent unlawful and unethical gaming and adhere to laws by requiring digital identities when users play games or gamble online on their systems.

Government and Public Sector

A digital identity for a corporation can assist in securing online logins and safeguarding vital assets, preventing any federal disputes or legal action. Additionally, government business units can protect their data by giving all of their workforce and other interested stakeholders digital IDs.

Healthcare

Hospitals and other medical facilities must generate digital identities for patients, physicians, and other staff members to store confidential material. Patients can especially benefit from this since the digital identity can record all medical information and make it easily accessible from any location.

Payments

Digital identities are used by finance and digital payment systems to speed up data security and enhance vendor onboarding.

Travel

Digital identities are used by the hospitality and tourism industries to stop compromised perks from being redeemed and fraudulent reservations from being made.

Insurance

Insurance providers and agents can keep all client data on file using digital IDs. This quickens the screening procedure and guards against all forms of fraudulent activity.

Lending

Digital identities must be used by both monetary and non-monetary entities to compile credit reports, credit histories, and certification of prospective and current borrowers. This aids in fraud prevention and supports quick loan applications.

Media

Digital identities are used by media and public relations executives to stop phony accounts and information, as well as to verify they receive the most for every dollar spent on advertising and marketing efforts.

How to control your digital identity?

Digital identity authentication and validation techniques are essential to guaranteeing Web and network infrastructure integrity in public and private sectors since identity fraud is common on the Internet. Below are the ways to control your digital identity.

· Make sure the connection is encrypted

Websites that use encryption to protect and secure online purchases only give private information. To determine whether the domain you are accessing is secured or not, look in the address bar of your browser. A “lock” symbol indicates that your data can be transmitted securely, but take precautions when connecting to a public wireless (Wi-Fi) network. Everyone can see the information you share and receive on these open networks if you visit a secure website. Personal financial procedures like viewing an account’s balance should be done via private and secure networks.

· Use password manager

The password management app that comes pre-installed on many smartphones is certainly known. These straightforward tools are essential for creating strong, one-of-a-kind passwords that are not reused across several accounts.

Making passwords is no longer sufficient on its own. One email account is all it needs for an attacker to gain access to all other identities in an environment where one Facebook account may sign you into many other sites. A password manager can assist you in using different passwords for each account, creating complex passwords that can’t be stolen using personal information, and updating your passwords regularly.

· Enable multi-factor authentication

To utilize a service like an app, net banking, or a VPN, the user must submit two or more verification credentials, known as multi-factor authentication (MFA). A solid identity and access management (IAM) procedure must include MFA as a fundamental element. MFA demands one or more extra authentication elements on top of a username and password, which lessens the possibility of a catastrophic cyberattack.

· Self-sovereign identity

Everyone has diverse associations or distinctive sets of identifying information, including businesses and the Internet of Things.

In a secure and reliable identity management system, self-sovereign identification (SSI) extends the same freedoms and personal liberty as physical documents to the Internet. SSI denotes that the person (or entity) administers the components of their identity and digitally limits access to all those credentials.

You can use your digital wallet and the credentials you were given to confirm your own identity through the SSI identification system.

The Takeaway?

In today’s modern world, understanding the concept of digital identity or online footprints is our ground reality. Besides, knowing how to control your digital id is likewise important.

Michiel Top
Michiel Top
While working on strategic positioning, marketing and sales programs for various companies, I was shocked again and again by how easily accessible private information actually is. Around 2017, when I was designing an online customer management system, it occurred to me how we could turn the tables. Then in mid-2020, when my own GDPR application to a well-known data enrichment company failed, I knew something had to be done.