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img="/uploads/Blog_1_1d11dd6ebe.png"
alt="How to Respond to Data Breaches"
/>

The Ponemon Institute has published a report on the financial losses of organizations that occurred as a result of data breaches. The cost of stolen information in 2021 increased by 10% compared to the previous year. The total loss amounted to $4.24 million (against $3.86 million in 2020). Most often, hackers attacked customer personally identifiable information (PII).

Currently, society makes serious demands on businesses when it comes to protecting confidential data. However, breaches do happen. How to detect unauthorized access to information and what should be done in this case? Let’s discuss this in the post.

## What is a data breach

If information falls into the hands of persons for whom it is not intended, they speak of a data breach. Most often, it is official or [**confidential information**](ways-to-address-customer-data-privacy-issues-in-digital-marketing). Hackers steal personal data of employees, credit card numbers of customers, as well as information related to trade secrets.

**Types of data breaches:**

- Information that identifies users: names, phone numbers, emails, physical addresses, and others. 
- Financial data: banking information, credit card numbers, passwords and logins that fraudsters use to steal money from bank accounts.

## Examples of data breaches in companies

Robinhood is an American financial services company. The company has an application through which users invest and trade stocks.

In November 2021, 5 million user emails were stolen from the company. The scammer learned the names of 2 million Robinhood customers and demanded money for non-disclosure of information.

First of all, Robinhood turned to law enforcement with a statement about extortion of money. They then prepared and published an incident report for app users and personally contacted affected customers. The company also signed a long-term contract with Mandiant, a leader in cybersecurity. Mandiant helped Robinhood eliminate the data breach and became responsible for its data security in the future.

Social media platform, Linkedin, suffered a data breach that compromised the personal information of 165 million user accounts. The data breach — which cost the company over three million pounds to clean up — has widely been reported as the result of weak user passwords.

<Img
img="/uploads/kartinka_2_aedead30dc.png"
alt="Social Media: People Still Use Pathetic Passwords"
/>

## How data breaches happen

According to the Verizon 2022 [**Data Breach Investigations Report**](https://www.verizon.com/business/resources/reports/dbir/), the most popular method is criminal hacking. Hackers use phishing, brute-force attacks on data servers, spyware and malware.

Breaches also happen within companies. For example, when an employee accidentally reads information on a colleague's computer without permission. Although the access is unintentional and the "secret" is not shared, such an incident is considered a breach of data security. 

There are also cases when an employee intentionally gains access in order to use the information in bad faith.

## Data breach: red flags

It is time to suspect a data breach if you notice the following signs:

- Company’s confidential data appeared in the public domain (for example, on the Internet).
- Data downloads by unauthorized users were recorded within the corporate network.
- Someone tries to log into the system from suspicious devices.
- There is activity in the corporate network at uncommon times.
- System crashes, password changes and uncontrolled account lockouts are common.
- Payments in e-commerce began to give errors.

## Who to report a data breach

The company must report to the appropriate organization that there has been a data breach. The organization varies depending on the location of the business and its customers. In 50 states of America, the procedure for notifying customers about a data breach incident is legally established.

On the territory of the European Union, the first to know about what happened is the DPA, a special organization responsible for the safety of personal data. The [**GDPR**](customer-data-privacy-issues-in-digital-marketing) requires businesses to notify the DPA within 72 hours.

## Data breach prevention

Now we will talk about how to prevent data breaches from happening, but not about what to do when it has already happened. You should constantly improve your data security to keep your business safe. Here are steps to take:

- **Set up limited access to data.** Let those people who need it have access to information. Do not give access to data to those who do not need it for the quality of their work.
- **Keep the software up to date.** Outdated software contains many security holes through which confidential information can leak out of the company.
- **Take passwords seriously.** If fraudsters find out the password to enter the system, all doors will open for them. We recommend that you change your work passwords every quarter and do not use simple combinations.
- **Protect employees' personal devices.** When the personal equipment of specialists is involved in the workflow, there is a risk for the business. The threat can be leveled with the help of antiviruses and VPN.

## Protect your data with Altcraft Platform

[**Altcraft Platform**](/en) is a reliable marketing automation platform with full data flow control. We take into account all the requirements of customers for the security of information. When requested, the platform can be deployed on the client's server. On Premise hosting enables rapid implementation without sacrificing security. Altcraft Platform has no limits on the amount of information to be stored and on the number of messages sent. There is no need to resort to the help of third-party vendors.

In this post, we talk about what data breaches are, how they happen, what to do, and how to detect and prevent them.

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How to detect unauthorized access to information and what should be done in this case? 

Data Breaches: How Your Business Should Respond to Them

How to Respond to Data Breaches

<Img 
img="/uploads/Blog_3d85602fec.png"
alt="8 Ways to Protect Your Customer Data"
/> 

Previously, only one department of the company stood guard over customer data. Now data safety is the business of every employee, since access to information is provided to almost everyone, but to varying degrees. In this post, we will talk about the constant protection of personal information, the consequences of leaks and the components of reliable protection.

## Why data protection is important

When it comes to protecting customer data, it is about protecting personally identifiable information (PII). PII are individual markers of a person: full name, passport details, residential address, contact information (phone, email, social networks), IP address, payment details and social status. This information should be carefully protected from accidental leaks.

Moreover, not only large companies should think about this issue, but also the smallest ones that have any kind of customer database. Ironically, the worst data offenders are conglomerate companies like Yahoo, Amazon, and Google. However, you can't be too careful in this matter.

From **a legal point** of view, failure to comply with PII protection requirements will inevitably lead to fines. Laws vary depending on the scope of the business and territorial affiliation. They are most often tied to the location of the user, not the data processor. For example, it is likely that any digital business will fall under the [**GDPR**](customer-data-privacy-issues-in-digital-marketing) (General Data Protection Regulation for EU citizens).

There are also **reputational risks**. Leaks to third parties can lead to loss of customer loyalty and trust in your company. At best, the business will get a lot of [**negative reviews**](how-to-use-customer-feedback-to-increase-sales) on various resources and a bad reputation in the media, and at worst, it will get a lawsuit, perhaps even a class action lawsuit.

As for **internal business processes**, it is unprofitable for a business to spend extra time (and therefore money) on handling incidents related to the leakage of customer data. Inside the company, it is better to [**build a system**](ways-to-address-customer-data-privacy-issues-in-digital-marketing) for protecting personal information so that it functions reliably almost offline and does not take time from employees.

The most important things are **privacy** and **security**:

- To maintain privacy, take action on information in accordance with the permissions received from users and control access to information.
- To ensure security, you need to have a plan of action to prevent scammers, hackers and untrustworthy employees from accessing confidential information.

## How to get started with data protection

Before you begin to study the components of the security of personal information, try to answer the following questions as honestly as possible:

### Do you have sufficient knowledge of the legal requirements for protecting confidential data in the area of your business?

Not only do the requirements of the legislation vary in different countries and in different areas, but lawmakers are constantly making changes to the set of rules that must be followed.

### Are you sure about the reliability of the third parties whose services you use?

It is likely that your business operates on the basis of third-party services. If they dishonestly dispose of the [**client data**](first-second-and-third-party-data) that you provide to them, the responsibility for what happened will still fall on you. Therefore, carefully choose partners: hosting, CDP, email services, and others.

If you've reviewed your answers to the questions above and come to the conclusion that there's nothing to worry about, it's time to move on to specific steps you can take to secure your client database.

## 8 steps of reliable protection of confidential data

### 1. Define the risks

Good data protection strategies are based on the analysis of risks and threats for the business. If you approach the issue comprehensively and describe in detail all possible threats, you get a full-fledged risk profile. This way, the company will have an idea of the dangers and weaknesses, and it will have time to develop countermeasures. 

### 2. Find a Data Protection Officer (DPO)

Perhaps a small business will find it unnecessary to hire a data protection specialist, but every company should make sure someone is in charge of data protection and security. The specialist is engaged in training and auditing, monitors legislation, and also closely cooperates with regulatory authorities. DPO will also be able to deal with customer requests on data security issues at a higher competent level.

### 3. Store information in one place

The more places where information is stored, the higher the likelihood of leaks. In addition, disparate information is difficult to process and analyze. Most often, such data is not suitable for effective work with them. What’s more, it easily leaks outside the company, gets into unauthorized applications and disappears out of control. The problem is solved by the use of [**Customer Data Platforms**](/features/cdp) (CDP), which combine all information into single client profiles with access to them by a limited number of people.

<Img
img="/uploads/digital_profile_2_e79e5283cc.png"
alt="Customer digital profile"
/>

The CDP traces the history of the data and all associated permissions. This is especially important for businesses that are regulated by GDPR and CCPA laws.

### 4. Collect only the data you need

Extra information will not help you in any way to achieve your goals, and it will soon become outdated, lose its relevance and become unusable. And if this data is leaked, you will be responsible for it. A large amount of information attracts hackers and scammers.

<Img
img="/uploads/tilda_subscription_form_ed2f130145.png"
alt="Opt-In form on a website"
/>

### 5. Limit employees who have access to information

Not every employee in your company needs access to customer information in order to work. Let the information remain at the disposal of only those persons who actually need it for the quality performance of their work duties.

### 6. Choose reliable software

Most modern technology is already equipped with primitive anti-fraud measures. But it is important to make sure that the built-in antiviruses work correctly. Don't rely on them alone. Better install a firewall, use external links, and test the software to see if it flags suspicious emails.

### 7. Develop a contingency plan

Hackers are now progressing and can break even a reliable system. All previous steps were aimed at preventing data leakage: identifying the danger, trying to level it completely, or reduce the negative consequences. If a leak does occur, it's a good idea to have a working emergency plan. At a minimum, you need a good external specialist for expert assistance.

### 8. Train employees

Not all employees need access to personal information, but it is everyone's responsibility to think about the security of work information. You should educate staff about basic data protection practices and how to recognize fraud. In case of violations, employees must immediately inform the competent authorities. Let the issue of safety be included in the onboarding training of newbies.

## Conclusion

Ensuring the safety of confidential customer data is an important business task. The significance of the issue is confirmed both by legislation and reputational aspects. Collect only the data you need. Firstly, users are annoyed when they are asked about all areas of life, and secondly, complete databases are highly valuable and attract scammers and hackers. Take a closer look at the other ways to protect information described in this post. Perhaps one of them will save your business from trouble.

In this post, we talk about why information privacy is important, and how businesses can protect customer data.

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In the digital world, information is an attractive source for hackers, so the safety of data is an important task in business.

How to Protect Your Customer Data: 8 Effective Ways

8 Ways to Protect Your Customer Data

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img="/uploads/How_CD_Ps_Will_Save_Marketing_in_a_Cookie_Free_World_c0c129f31f.png"
alt="How CDPs Will Save Marketing in a Cookie-Free World"
/>

Cookies (third party cookies) have been the lifeblood of online marketing for over a decade. With the help of them, marketers tracked the actions of users on the Internet and made advertising. The company received information about the behavior, preferences and interests of the audience.

But with the advent of GDPR and CCPA, which will close access to third-level data in 2023, marketers are beginning to think more seriously about advertising in [**a privacy-first world**](customer-data-privacy-issues-in-digital-marketing).

Marketers are starting to adapt to a world without cookies and are realizing that CDPs (Customer Data Platforms) are becoming a powerful marketing tool. CDP manages, collects and stores customer data in compliance with data protection regulations.

## What a world without cookies would look like

Imagine what would change on the Internet without cookies.

### Google Topics (and others…)

Topics are the third part of Google's decision to block access to third-party cookies. The tool groups users by unique identifiers: the IP address accessed by the client's web browser. The API stores information about three to five topics with which a person constantly interacts on the Internet. For example, sports, news and pets.

Websites are then able to access these topics to produce advertisements that will possibly attract the user when they visit the site. For example, an ad for pet products appears next to sporting goods.

But that's part of the problem when it comes to new ideas for ad targeting.

In the new reality of targeting, marketers are discussing and testing other methods:

- Contextual targeting 
- Universal Identifiers
- Probabilistic
- Cohort-based targeting 

### First-party data precedence

Because of the rejection of third-party cookies, companies and marketers must make full use of first-party data. This is information that the company collects from customers and becomes the sole "owner". Such data is valuable to marketers because it provides accurate information. Another advantage is the transparency of the provenance. 

Data from customers is important in a world where privacy is a priority. When a business has complete information about the customer's journey, it regulates the use of data without any problems: it selects those to which users themselves have opened access.

With first-party data, marketers have access to a wealth of information such as consumer preferences, location, and other demographic data that can all be used to build a complete [**customer profile**](creating-a-customer-profile). Further, advertising is set up for the user and the company's marketing works. First-party data strategies are able to maintain positive and compliant customer experiences, protect personal information and enhance advertising opportunities for marketers.

### Customer Data Platform Benefit

The creators of Data Management Platforms (DMPs) and Customer Data Platforms (CDPs) were already gearing up for a world without cookies.

According to the latest research by Zeotap, 1% of marketers are ready to abandon DMP and switch to CDP. Why?  It's all about the [**first level data**](first-second-and-third-party-data) that CDP usually uses (as we now know, this is the key to success in a future without cookies). DMP works more often with third-level data.

## 6 ways CDP will solve the problem of a world without cookies

### 1. Data collection management

The gigabytes of data that companies collect across dozens of touchpoints (customer service, websites, point of sale) can reveal the needs and desires of consumers. However, collecting, managing and analyzing data from multiple sources can sometimes be a minefield.

This is where [**CDP**](/features/cdp) comes into play. The CDP is able to collect information, manage first-level client data from unrelated sources and make it usable.The platform unites information into single customer profiles, sometimes referred to as "golden records".

CDP receives this data in an unlimited number of formats: files, integration with other platforms and even web application pixels. A good CDP will pull information from just about anywhere.

### 2. Resolve identities into a single customer view 

A 360-degree customer view, often referred to as a single customer view, is a comprehensive aggregation of available user data.

This information may include contacts, user purchases, details of transactions that customers have made at business touch points (such as customer service or stores) along the customer journey. Customer data comes from different sources.This is a large amount of information that must be aggregated, cleaned and combined. It is then stored in a secure location that is accessible only to interested employees. But with cookies gone, identifying customers and attributing the right data fragments to them gets harder.

Here, Identity Resolution technologies play a decisive role in platforms. They compare, standardize and verify information. The attributes of the same individual user are linked together under a unique ID by applying a classification scheme to the data labels of your multiple sources. It enables the creation of a single view of the client that the business needs.Therefore, customer data platforms are the best software for creating a secure and complete client profile.

### 3.  Manage Consent

CDP tracks and manages the whole consent journey. This is vital to ensure that the customer's data is only handled in the way that the customer has authorized.

For example, a customer consents to the use of personal data for the company's marketing purposes via a [**mobile app**](mobile-app-as-a-marketing-channel), but might later retract that consent when engaging via email.

In unifying that customer’s data from separate channels and data sources, a CDP integrates customer consent records to work with their data. The process is called consent orchestration, which makes it easier for the user to choose.

### 4.  Enable activation in walled gardens 

In the cookieless future, marketers will still want to use the addressability options that will remain in the biggest platforms. These ‘walled gardens’ like TikTok, Facebook and Google Ads, which will take on a new role as the open web adapts to life without cookies.

But there is one thing. Walled gardens mean multiple data sets with multiple activation requirements: a very manual process which can result in delays. Paid media managers know exactly what we're talking about.

If a business needs a data-driven strategy that launches in a couple of clicks, a CDP is the way to go. With a customer data platform, a company gains access to customer segments that are activated across multiple channels with a single click.

There will be no dependence on data collection teams, and the information received will work more efficiently. CDP will help you [**identify segments**](how-and-why-to-segment-target-audience) of possible customers through behavioral data from various touchpoints. 

Therefore, if in the past you created audiences and thought: “I wish I could combine data from our CRM and website”, now you have found the answer.

### 5. Activation across the open web through Universal IDs

In the future, CDP will become the main tool for dealing with addressability on the open web through Universal IDs.

Universal IDs are shared, persistent identifiers that link users across the digital marketing ecosystem. They are needed to ensure the future of identification and addressability when third-party cookies are deprecated in 2023.

The customer data platform will be able to unify the disparate data collected by the business and create a hashed unique universal user identifier. This identifier is transmitted over CDP communication channels and compared with information from data sources (websites or apps).

If identifiers from different channels match in parameters, then they are assigned as a single universal ID for one user. Then you can launch ads for target consumer segments.

### 6. Provided Opted-In Audiences To Publishers

CDP tracks brand touchpoints and marketing preferences so that a business is only advertised to an interested audience when it reaches different segments on the open web.

**Here are benefits of CDP for marketing:**

- Advertising works according to the law. Each opt-out request is automatically tracked and counted across all channels.
- The accuracy of the audience selection, because data is selected from several sources within the business.

In this post, we talk about why CDP is a powerful marketing tool. We also share 6 options for how platforms will solve the problem of a cookie-free world.

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As marketers begin to adapt to a cookie-free world, they are quickly learning that CDPs are becoming a powerful marketing tool.

How CDPs Will Help Businesses in a World Without Cookies

How CDPs Will Save Marketing in a Cookie-Free World

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img="/uploads/web3_95dcd31dca.png"
alt="Web 3.0: What It Is and How It Will Affect Marketing"
/>

Progress does not stand still, and Web3 has already appeared on the horizon. There are many rumors surrounding this concept and almost no specifics. However, it’s clear that marketing will have to face new realities. In this post, we will talk about what Web3 is, when to expect it and what marketers should prepare for.

## Third Generation Internet

The third generation of the World Wide Web, or the next generation of the Internet. This is how Web3 stands for. 

Web3 is the concept of a decentralized Internet space where power does not belong to giant companies such as Amazon, Google and Netflix, but to ordinary users. Web3 is based on blockchain technology, machine learning, big data and artificial intelligence. It is predicted that all this will make the Internet more accessible, and at the same time private and secure.

The first version of the Internet was introduced in the late 90s. It was a primitive web: simple fonts, inconspicuous buttons and blue hyperlinks. If you want to visualize the old version of the Internet, you just need to open any site using only HTML files. In fact, it was even worse.

Significant changes took place in 2005. Web2 users got the opportunity to watch new content, hang out on blogs and social networks. Everything would be fine, but a new problem has emerged in the process of evolution of the Internet. New marketing methods used by companies to work with customers have created [**a threat to the security of user data**](customer-data-privacy-issues-in-digital-marketing).

People began to distrust brands, despite efforts to protect Internet users and prevent confidential information from being shared with third parties. For example, in 2018 comedian Hasan Minaj stated on his Netflix show “The Patriot Act” that Amazon has control over the most important 21st-century commodity — data. The marketplace knows how much and where we spend money, and what we prefer to do in the digital space.

<Img
img="/uploads/glavnaya_stranica_amazon_ab73372337.jpg"
alt="Amazon website"
/>

It's not a joke at all. Amazon has grown from a bookstore to a tech giant. Now the scope of the corporation's interests includes e-commerce, streaming, cloud products and developments in the field of AI.

Web3 is supposed to solve the problem. The new generation of the Internet will allow users to independently control technical platforms. At the same time, they will no longer be in the role of “sheep” that campaigns shear for data. This can be done using the technology of tokens (cryptocurrencies) and blockchain. Blockchain will be owned by the one who owns the token. The more tokens you have, the more power you have over the World Wide Web. 

Critics of this approach agree that the attempt to decentralize the Internet looks too veiled, and in fact, people who have more money will continue to control the digital space.

<Img
img="/uploads/nft_kartina_382d17aed2.jpg"
alt="NFT picture"
/>

Anyway, tokens will soon take part in all digital processes: social networks, games, [**virtual art**](what-is-nft) and digital events.

## When to expect Web3

No one knows. Web3 has been a topic of discussion for several years, but the idea is still in its infancy. While the infrastructure required for implementation is evolving, there is no timeline for completion. Then what's all this noise about?

It is all about cryptocurrencies. They have become so popular that venture investors have invested $27 billion in cryptocurrency development projects in 2021 alone (according to [**The New York Times**](https://www.nytimes.com/interactive/2022/03/18/technology/web3-definition-internet.html?hubs_post-cta=blognavcard-marketing)). Therefore, everyone around is talking about the transition of the Internet to crypto technologies.

## What Web3 Means for Marketers

When Web3 appears, its arrival will greatly shake the world of marketing. 

### User data will become inaccessible

Web3 is characterized by high data privacy. Nowadays, all marketing is based on [**customer data**](first-second-and-third-party-data). Marketers collect all available information into a single client profile: contact details, socio-demographic status, behavioral characteristics.

All marketing campaigns are based on the analysis of behavioral data, for example, which places and sites the user visits, what products they buy. If companies know how much money customers spend, they can guess their income level and offer more expensive products.

Web3 assumes that users will be able to decide what information about themselves to share, and clearly control the scope of its application. This means that companies will have to bring transparency to the processes of collecting and using data. And also find more creative approaches to attract and retain customers.

### Communities will play an important role

Communities as a collection of users united by common ideas will be of particular value. Since the power in Web3 is concentrated in the hands of the “average” consumer, many such people together will have weight in determining the direction for the development of the digital space. The stronger the distrust of brands, the more interesting the idea of creating strong communities.

### Content will get more attention

How to attract potential customers if there are so many restrictions around? Use high-quality content. This is the content that the user will see and go to the seller himself.

Currently, content makers have to comply with the requirements of various platforms for posting materials, which seriously limits them. Web3 will give creators autonomy and remove the ceiling on potential earnings.

Charlie Neer, chief revenue officer at MIQ, stated in an interview for [**CMSWire**](https://www.cmswire.com/digital-marketing/what-does-web3-mean-for-marketing-and-customer-experience/?hubs_post-cta=blognavcard-marketing): “What does this look like in our current environment? Currently, when an individual downloads a song, the creator gets a fraction of the total revenue and the host (think Spotify or Apple Music) makes out like a bandit. The same goes for creators on YouTube, Twitch, etc”.

There is supposed to be more fairness in the age of Web3.

Most likely, we won’t see Web3 soon. However, those who keep abreast of the latest developments will win.

Web3 is the new generation of the internet. Read about when it will launch and what marketers should prepare for.

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Web3.0 is the next generation of the Internet. Let's break down what this means for the marketer.

Web 3.0: What It Is and How It Will Affect Marketing

How Web3 Will Change Digital Marketing

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img="/uploads/1st_2nd_i_3rd_party_data_0a6be87456.png"
alt="First, Second and Third-Party Data"
/>

Data is the backbone of marketing. [**54% of marketers**](https://www.invespcro.com/blog/data-driven-marketing/) claim that success of advertising campaigns depends on data. Lack of necessary information about target audience results in loss of money. Businesses that personalize communication with their customers using data have ROI 5-8 times higher. That's why companies are switching to a [**data-driven approach**](data-driven-marketing).
 
Information obtained from several channels gives a more detailed picture of your audience, helps to personalize and scale your business and makes it possible to predict user behavior. There are several different types of data used for different tasks. By the way of obtaining and uniqueness, there are 1st, 2nd and 3rd party data. In this article, we will take a closer look at these types of data, learn how to use them in marketing and how to collect information about customers without violating confidentiality.

## What is 1st Party Data 

**1st party data** is data that companies receive directly from customers through registrations, [**pixels**](ak-pixel), cookies, CRM and other services. There are no restrictions on collecting information when it comes to this type of data. The only thing you need is user permission. Customers can refuse to provide data, although leaving a name, phone number or email address is usually not a problem.

<Img
img="/uploads/1st_party_data_89096760bb.png"
alt="First party data"
/>
 
**1st party data that companies collect:**

- user behavior and time spent on websites and in apps;
- results of email and SMS newsletters (open rate, clicks);
- contact details: email address, phone number;
- information about customer orders;
- feedback;
- demographic data;
- user survey results;
- behavior in social networks;
- interests.
 
**Advantages of first-party data:** it's free of charge and reliable, you have full ownership of it because your competitors don't have access to company information. 

**Disadvantage of first-party data:** it's not enough to scale your business.
 
<Note>
Data collection is a priority for companies. 
</Note>

**Why do businesses need first-party data:**

- It helps to learn about the needs of customers in detail and offer them products that they will definitely purchase. 
- It [**personalizes offers and content**](/features/personalization) for customers. 
- It helps to launch advertising and retargeting campaigns. 
- It makes it possible to predict customer behavior. 
 
*Example. A customer purchased T-shirts of a certain brand in an online store. Six months later they visited the website and added the same ones to the cart. So we can conclude that a purchase is possible in the future. The company «anticipates» actions and pushes the customer: it offers them special conditions, a discount and reminds them about the product in a newsletter.*

## What is 2nd Party Data

**2nd party data** is the 1st party data collected by another company from its sources. Second-party data is bought from partners or third-party companies with a relevant audience. 

<Img
img="/uploads/2nd_party_data_34d23b8721.png"
alt="Second party data"
/>
 
**Why do businesses need 2nd party data:**

- It helps to scale your business. It's difficult to broaden your audience only with 1st party data. If you don't have 2nd party data, you can make a mistake and take wrong actions when working with a new audience. With second-party data, it's easier to launch the first advertising campaigns.
 
*Example. Let's imagine a company that specializes on women's clothing for fitness. The company made a decision to diversify the range and start selling men's clothing. The business doesn't have data on the new audience. But they have partners who are engaged in sports nutrition and work with their potential customers. Information obtained from this company is 2nd party data.*

- It serves as an addition to first-party data. With 2nd party data, you will see problems in the sales funnel.
- It helps to track trends. Your conclusions will lack objectivity if you have only first-party data. 
- It [**strengthens partnership**](/partners). When you exchange data, you increase trust between businesses.
- It brings unexpected ideas to creative companies.
 
*Example. A travel agency buys 2nd party data from an online store that sells suitcases and travel bags. According to the online store, 30% of their customers purchase dog carriers for airline travels. So the agency makes a decision to launch a new product and advertising campaign for travelers with pets.*
 
**Disadvantage of 2nd party data:** you can't be sure that the data your company receives is 100% accurate and relevant. You don't know how and when this information was collected. If you buy 2nd party data, you should trust the seller and their data collection methods. 

## What is 3rd Party Data

**3rd party data** is data from multiple sources collected by aggregators. This includes 1st party data that were bought by outside sources and/or data collected through surveys, studies, interviews and so on. Examples of aggregators: Nielsen, eXelate, Acxiom, OnAudience, BlueKai, Oracle Data Cloud, Peer39, Google services, payment systems, etc. Social networks are also data aggregators that sell companies ready-made audiences for advertising. Third-party data sellers collect information and [**segment it into categories**](how-to-build-an-email-database) for searching by industry, by interests and so on. 

<Img
img="/uploads/3rd_party_data_63efa184d4.png"
alt="Third party data"
/>

**Third-party data includes:**

- gender data;
- interests;
- income level;
- geographic data;
- professions.
 
**How to use 3rd party data in marketing:**

- Use it to expand 1st party data, study your audience in detail and increase personalization. 
- Study and get ideas for business development. 3rd party data provides you with a larger audience reach that 1st and 2nd party data. 
- Launch targeted advertising for a potential audience. 
- Track global trends. 
 
**Advantages**: third-party data is often collected automatically, so this information is always up-to-date and can be used for a quick change of marketing strategy.

**Disadvantages**: you can't be sure of the data accuracy; the same information is available to competitors.  
 
<Note>
It's important to work with all types of data because they complement each other. 
</Note>
 
*Let's go back to the example of the company selling women's fitness clothing (see above), which decided to diversify their range and add men's sportswear. 2nd party data is the basis for the first campaign but the audience reach is not large enough. The company buys 3rd party data to supplement customer information and widen the audience.*
 
If you have all three types of data, you have a comprehensive picture of your audience. The more you know about your customer, the easier it is to reach them and sell your product faster.

## How to Collect Data

The current tendency in the world is to increase the privacy of personal information. Data collection is limited by legislation and by companies that collect data. 
 
[**GDPR**](customer-data-privacy-issues-in-digital-marketing) (General Data Protection Regulation) is a regulation that protects personal data of EU users and is valid for companies that work with EU citizens. A person can request personal data, correct and even delete it, revoke permission to its processing.
 
The Russian Federal Law on Personal Data prohibits disclosing user data to third parties without consent.
 
Google restricts cookies for 3rd party data in the Chrome browser. The company is planning to get rid of third-party cookies during 2022 to enhance user privacy. This approach is the obstacle to tracking customers’ interests and journey to conversion. It will become difficult or impossible for end-to-end analytics to find out customer journey through cross-devices. 
 
Apple restricts third-party cookies (Intelligent Tracking Prevention) for Safari browser (from 13.1). The browser restricts the collection of data from third-party services. IOS 14.5 now requests confirmation to collect information via IDFA (The Identifier for Advertisers). If the user doesn't confirm, the accuracy of data decreases. Apple offers an alternative — anonymous aggregated data. However, it won't be enough to cover all marketing needs with such information.

### Data Collection Rules

- Prioritize 1st party data, collect 2nd party data to [**build your own data system**](ways-to-address-customer-data-privacy-issues-in-digital-marketing) and be less dependent on 3rd party data.
- Notify users about data collection and ask their permission for its processing. You can't consider people whose data is collected secretly your target audience.
- Follow the legislation on user data protection and the rules of the information market.

## Conclusion

Marketing can't function properly without data. However, not all types of data are equally useful. There are 1st, 2nd and 3rd party data. First-party data is obtained directly from users. Second-party data is the 1st party data that companies buy from partners and businesses with a similar target audience. Third-party data is obtained from aggregators that buy information from companies or collect it themselves. 

1st party data is reliable and easy to collect, but not suitable for scaling your business. 2nd party data expands your audience, but it’s difficult to test its validity. 3rd party data contains a lot of information, but you can't be sure of its reliability. Third-party data is also available to competitors. 

Regulations of aggregators and state laws slow down the collection of information. Companies should monitor changes, create their own data collection and storage systems so as not to depend on third-parties.

In this article, we will learn how to use different types of data in marketing and how to collect information about customers without violating confidentiality.

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Data is the backbone of marketing. 54% of marketers claim that success of advertising campaigns depends on data.

What Are 1st, 2nd and 3rd Party Data and How to Collect Them

First, Second and Third-Party Data

<Img
img="/uploads/Customer_Data_Privacy_Issues_in_Digital_Marketing_d468361b4f.jpg"
alt="Customer Data Privacy Issues in Digital Marketing"
/>

In the era of digital marketing, the issue of personal data protection is particularly acute. For example, the CLOUD Act, adopted in the United States in 2018, jeopardized the confidentiality of information stored by American companies, regardless of their geolocation. This Act shows that the government of the country has become a regulator of digital data exchange, and this cannot fail to affect business.

Let's talk about which laws on protection of confidential data have come into force, and how companies are reacting to this.

## The Struggle for Data at the State Level

### GDPR in the EU

**On 25 May, 2018, the General Data Protection Regulation (GDPR) came into force.**

GDPR provides EU citizens and residents with full control over their personal data. Even if a person's data is located in another country, they can easily control it. In case of violation of the regulation, the EU may impose a fine of up to €20 million or to recover 4% of total revenue for the preceding financial year.

The largest [**fines**](https://www.tessian.com/blog/biggest-gdpr-fines-2020/) over the past three years have been received by the following companies:

**1. Google — €50 million in 2019.**

Users complained that the company had no legal right to process their personal data to show ads based on it. Later it turned out that people hadn't given full agreement on the data processing.

**2. Clothing retailer H&M — €35 million in 2020.**

In 2020, H&M was fined for violating its employees' privacy. Supervisors of the company collected information about vacations and medical diagnoses of employees on sick leave. Even data from workers' personal conversations was recorded and stored. The collected information was stored on H&M servers, and at least 50 managers had access to it.

In October 2019, a server error made the information publicly available, which caught the attention of regulators.

**3. Amazon — €746 million in 2021.**

In 2021, Amazon received a huge fine for collecting and transmitting personal data using cookies. This was not the first company's fine for violating GDPR data protection rules.

### The CLOUD Act in the USA

The CLOUD Act came into force on March 23, 2018 and immediately caught public attention. The fact is that the CLOUD Act violates the balance in data protection. How? Let us tell you.

In 2020, The Court of Justice of the European Union (CJEU) recognized that US service providers did not adequately protect the personal data of people from other countries. The CLOUD Act allows law enforcement agencies of the United States to require access to information about US citizens or residents from US providers located outside the country. They need a warrant, a subpoena or court order to require it. **However, there's no guarantee that these requests will concern US citizens only, and providers will side with their customers in such a situation.**

This Act particularly affected the General Data Protection Regulation (GDPR).

The European Data Protection Board (EDPB), an independent European body, concluded that service providers from the USA, also subject to the EU GDPR, cannot legally justify the disclosure and transfer of personal data to the United States on the basis of a warrant or other court order. Personal data can be transferred outside the EU only on the basis of a Mutual Legal Assistance Treaty (MLAT).

<Note>
Therefore, the EU regulation and the CLOUD Act contradict each other in terms of the strict GDPR rule to have solid legal grounds for data transfer.
</Note>

### Data protection law in China

On August 20, 2021, the Personal Information Protection Law (PIPL) came into force in China.

Network resources are now required to provide users with automated processing options that ensure customer privacy.

On August 22, the People's Bank of China (Central Bank) [**fined**](https://www.globaltimes.cn/page/202108/1232148.shtml) four financial institutions of the country 11.53 million yuan ($1.77 million) for illegal collection of personal data. Four banks were found to be in violation: Postal Savings Bank of China, Huaxia Bank, Bank of Communications and Industrial and Commercial Bank of China.

## The Struggle for Data in the Digital Sphere

### In 2020, Google restricted Third-Party Cookies in Chrome via the SiteName directive.

In early February 2020, Google released Chrome 80 that supports blocking third-party cookies (called SameSite cookies). This feature is fully available to all Chrome users until 2022.

A year later, on March 3, 2021, David Temkin made the announcement that even after removing third-party cookies from Chrome Google would not build [**alternative identifiers**](https://blog.google/products/ads-commerce/a-more-privacy-first-web/) to track people who browse the web. The company operates within Privacy Sandbox, which means it creates a product that both protects people's privacy on the Internet and provides developers with the tools to create a thriving business in the digital environment.

### Starting from March 24, 2020, Apple blocks the installation of Third-Party Cookies.

On March 24, 2020, Apple released an Intelligent Tracking Prevention (ITP) update for Safari 13.1. The browser now blocks all [**third-party cookies**](https://www.zdnet.com/article/apple-blocks-third-party-cookies-in-safari/) by default. This means that advertisers and analytics companies cannot use third-party cookies to track users' online activity.

On the one hand, this is a big step towards user privacy. On the other hand, without analyzing user online activity, it will be difficult for companies to offer relevant products and services to customers.

### Since April 26, 2021, Apple has been requesting tracking permission from customers using iOS 15.

On April 26, 2021, Apple introduced a new version of iOS (14.5) in which it banned iOS apps from direct access to IDFA (The Identifier for Advertisers). Apps are now required to request confirmation, and people will decide for themselves whether to use IDFA or not.

Thus, Apple has broken the current advertising traffic system. If iOS user refuses to use the identifier, it leads to a decrease in the quality of mobile traffic attribution and an increase in the cost of customer acquisition.

Apple has offered the market an alternative — its [**privacy-safe traffic attribution system**](https://gopractice.ru/ios_14_idfa_changes/). It allows you to add information about installations to advertising networks, but it does not explicitly disclose information about the visitor. Therefore, the capabilities of the system are very limited and do not cover the basic needs of marketers.

The main problem of the system is that developers and advertising systems will not have data at the user level. The data will be only in aggregate form in ads account.

## The Global Trend: Privacy First

Big data is popular with organizations because it promises improved operations and new business opportunities.

<Note>
More customer data means more sales.
</Note>

Customer data gives us:

- new insights;
- improved products;
- understanding of the audience;
- [**trustworthy communication**](customer-trust) with customers;
- improved marketing strategies;
- more personalized offers;
- increased conversion and sales.

At the same time, big data is easier to leak, which in turn compromises people's privacy and violates data protection laws.

Today, users are concerned about the safety of their personal information. They are increasingly asking companies questions about data privacy. Companies are responding by blocking access to customer data on their platforms.

With the Privacy First approach, the user's privacy comes first. This means that companies are no longer collecting unnecessary personal data about their customers.

*For example, when buying a jacket in an online store, you do not need to enter passport data or place of birth, but debit or credit card data is required. When you register for a webinar, you should not be required to enter your workplace, unless it is a webinar in your speciality and the organizers need to know the position of the visitors.*

## Conclusion

So, as you may have noticed, today the struggle for data has reached the national level: GDPR in the EU, the CLOUD Act in the United States, the Personal Information Protection Law in China, and ecosystems shutdown can completely monopolize the customer data market.

This suggests that in the current situation, there is one right solution: to build an independent system for collecting and managing customer data for direct and secure communication with customers in the digital environment. We'll talk more about it in next week's article.


Read about how government laws are forcing companies to look for new solutions to protect customer data.

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medium_Customer Data Privacy Issues in Digital Marketing.jpg

small_Customer Data Privacy Issues in Digital Marketing.jpg

thumbnail_Customer Data Privacy Issues in Digital Marketing.jpg

Customer Data Privacy Issues in Digital Marketing.jpg

Let's talk about which laws on protection of confidential data have come into force, and how companies are reacting to this.

How to Win the Struggle for Personal Data in Today’s World

Customer Data Privacy Issues in Digital Marketing

![CLOUD Act and GDPR.jpg](/uploads/CLOUD_Act_and_GDPR_b8d4257411.jpg)

In the era of digital marketing, the problem of personal data protection is especially acute. In 2018, the CLOUD Act came into force in the United States and compromised the confidentiality of data held by American companies, regardless of their geolocation. The fact that such a law was adopted suggests that the government is becoming a regulator of digital data exchange. This cannot but affect business. **Therefore, today we’re going to raise a serious topic and try to figure out why the risks of storing data on third party hosts have increased, and what private businesses need to do in this situation.**

## How the CLOUD Act upsets the balance of data protection

In 2020, The Court of Justice of the European Union (CJEU) declared that U.S. service providers did not adequately protect the personal data of persons from other countries. The point is that this law allows U.S. law enforcement to request personal data of U.S. citizens or residents from US-based companies — even if they are located outside the country — by issuing warrants or court orders. **However, there is no guarantee that requests will only concern citizens of the United States, and it’s unlikely that service providers will side with their customers in such a situation.**

The law seriously affected the General Data Protection Regulation (GDPR), which protects the personal data of individuals and legal entities in the European Union and beyond. The GDPR enables people to better control their personal data and introduces strict requirements relating to data transfers to third countries, requiring a legal basis for this.

The independent European Data Protection Board (EDPB) has concluded that U.S. service providers who are also subject to the EU GDPR cannot legally base the disclosure and transfer of personal data to the US even if it’s based on a warrant or other court orders. The transfer of data outside the EU is only acceptable if grounded on an international agreement, such as an MLAT.

<Note>
Therefore, the EU regulation and the CLOUD Act contradict each other when it comes to a strict GDPR requirement to have a compelling legal reason for the transfer of data.
</Note>

## What are the conclusions and what needs to be done

We agree that the adoption of the CLOUD Act severely undermines the protection of users' sensitive data. **In addition, now no one can be sure of companies claiming to be in compliance with the key principles of the GDPR.**

Leading market players understand how important it is to treat the information provided to them with care. Companies are seriously concerned that their data may be used illegally for commercial purposes. The sole possession of your customers’ data is becoming the key to a successful business in the digital sphere. That’s why the struggle for data will only intensify.

In recent years, the number of cloud service users has increased significantly. This has resulted in a huge amount of data being stored outside the jurisdiction in which it was created. Besides, companies that prefer to use SaaS solutions cannot ensure reliable data protection.

**DLA PIPER has conducted research that clearly demonstrates the insecure protection of sensitive data in certain countries.**

![data-leakage-in-some-countries.jpg](/uploads/data_leakage_in_some_countries_3b57e22511.jpg)

So what should large and medium-sized businesses do to ensure information security? It’s quite simple. **Now digital platforms that can be deployed as a private cloud or on-premise solution are becoming a good way to solve this problem.** By integrating a platform such as the [**Altcraft Platform**](/en) into the corporate network, the organization prevents the possibility of a personal data leak. Only certain employees get access to the data. This gives the organization full control over the data and at the same time excludes outside interference.

Many banks, insurance and logistics companies, payment systems, online services that handle large databases are already using [**Altcraft**](updates-rich-push-i-formy) Platform. Our on-premise solution is completely adaptable to the needs of companies and allows them to manage all processes within the system.

## Conclusion

Today companies are concerned about whether the information provided to them is securely stored. As we said, cloud providers fail to ensure adequate protection of customer’s personal data. That’s why you need to weigh all pros and cons before you choose a solution — SaaS, Private Cloud or On-premise. Check in which country the provider is located, what laws it obeys and how it operates.

If you have any questions, please write to [**us**](mailto:sales@altcraft.com). We would be pleased to answer.

Here's how US law and EU regulation are forcing companies to look for new solutions to protect customer data.

medium_CLOUD Act and GDPR.jpg

small_CLOUD Act and GDPR.jpg

thumbnail_CLOUD Act and GDPR.jpg

CLOUD Act and GDPR.jpg

Today we’re going to raise a serious topic and try to figure out why the risks of storing data on third party hosts have increased, and what private businesses need to do in this situation.

CLOUD Act and GDPR: How US Law and EU Regulation Affect Data Security

How to Win the Data Battle in Today's World

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