California Consumer Protection Act- What it Means for Marketing
Constantly bombarded with emails and messaging that you don’t remember signing up for? Or worried about how your data is being used by all the corporations? Doesn’t it feel like we are actually living in a world described by George Orwell in his classic 1984 - where it seems like everything we do is being tracked or used? Sounds familiar, doesn’t it? Privacy and data security are definitely a top concern of modern’s customers. Well, all that might just change.
Why? How?
The California Consumer Protection Act (CCPA) came into effect on January 1, 2020, a year and a half after the Californian government passed it. While the CCPA is not a federal law, it is a step in the right direction towards protecting the consumers (which is us). It is the biggest privacy law passed in the United States and could set the tone for consumer rights across the nation and the world. The law has several implications on how businesses will run, especially regarding what they are doing with consumer data.
Wait, back up. This feels like an information overload.
Don’t worry! That’s why we are here. Read this blog to find out what the CCPA is, how it will impact your business, and why it makes inbound marketing is even more relevant today.
What is CCPA?
The CCPA is a state-level law that was created to protect the privacy and data of customers. The law requires companies to notify users about what data they are collecting, how they are collecting it, what they are going to do with the data, and also give them a straightforward means to opt-out.
Currently, a lot of businesses are using personal information, browsing history, interaction with a website to re-target ads, set pricing, etc. without explicitly informing the customer. Furthermore, companies are passing on customer data to third-party entities for their own benefit. Consumers today have no way to protest or take action if they feel their data has been misused. Under the CCPA, all the above will change.
Here is a board explanation of what the law is requiring companies to do.
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Right to Information - Companies must disclose what information they collect, the purpose behind data collection, and information on any and every third party group they share that data with. Companies need to disclose this information to consumers right at the start - via a sign-up page for an online account, or a download page for an app.
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Right to Deletion -Businesses are required to comply with official consumer requests to delete data from their records.
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Right to Opt-Out - Consumers can opt-out of their data being sold, and businesses can’t retaliate by changing the price or level of service.
Businesses can, however, offer “financial incentives” for being allowed to collect data.
California authorities can penalise companies for violations. These fines could be up to thousands of dollars per violation (yikes!)
The definition of data in the law is quite broad, but some examples are name, postal address, IP address, email address, social security number, driver’s license number, browsing history, search history, and geolocation data. The law also includes biometric data, such as DNA or images of the eyes, fingerprints, hand, and face.
One important factor to emphasise here is that even though the law was passed in California, the CCPA applies to all companies that meet their criteria, regardless of their location.
What CCPA Implies for Businesses & Marketing
In terms of marketing, the CCPA has several repercussions. The main one being that consumer consent is top priority. Companies can no longer send blast emails or set re-targeting campaigns if the consumer has not explicitly agreed to share their information or data.
Gone are the days of “buying” databases of consumers and bombarding them with promotions. If you do that, be prepared to pay the penalties as well.
Through the CCPA, marketers will have to be first become more aware about what data they are collecting and how they are using it. Next, marketing team and companies will need to be more conscious about relying on third-party data sources. In turn, companies will have to create better, more efficient first-party data acquisition channels.
How can one do that? Well, my friend, that is where inbound marketing comes in.
Future of Marketing is Inbound
With increasing restrictions being put on how you can market to a customer and consent being a top priority, it is safe to say that the future of marketing is inbound.
By investing in inbound marketing, you are using powerful content to attract, engage, and delight a customer. Via nurturing the relationships and offering solutions exactly when the customer seeks them, you move them through the buying cycle and convert (#goals).
The focus of companies, in today’s digital world, should be on creating top, relevant content that will allow their target audience to discover them and then keep them coming back until they make a sale.
Personalising campaigns is a key strategy inbound marketing, and with the CCPA you can continue to do that as long as the customer has given you consent to do so. If a customer fills out a form before downloading an ebook, he or she is giving your company access to information. You, as a company, cannot share information with a third-party ad company without further consent.
Summary
The CCPA is possibly the most stringent privacy law to be out in recent times, and it is only the start. More states and countries are expected to follow suit and give consumers more power over their data. A lot of corporates like Facebook and Microsoft have already started laying the groundwork for more transparent and compliant data management procedures. Moving forward a successful marketer will need to move away from traditional outbound marketing techniques and hone in on creating valuable content to attract and engage customers.
If you are unsure about how CCPA will impact your business, don’t hesitate to contact the experts at Transfunnel Consulting. They are also there to help you start your inbound marketing journey.
