Digital Personal Data Protection Act: Marketing's new era of trust

The 2023 Digital Personal Data Protection Act (DPDP Act) has brought a seismic shift to India’s marketing landscape, stirring both apprehension and optimism among marketers. Advertising drives free or low-cost internet access and is a vital part of the digital ecosystem.

As brands and their ad agencies navigate the new regulatory waters, they face a dual mandate: stringent compliance with the law and an opportunity to build deeper trust with their customers through responsible data practices. To thrive, they must skillfully manage compliance challenges while promoting privacy-focused innovation. At the same time, they must not only adhere to regulations but also build trust and credibility with consumers.

The compliance challenge

One of the most immediate impacts of the DPDP Act is the need for rigorous data management. The law mandates that businesses adopt advanced data storage solutions to ensure the security and integrity of personal data.

This means that companies can no longer afford to be lax with how they handle sensitive information. They must invest in secure databases, implement encryption protocols, and regularly audit their systems to prevent breaches.

For example, consider a retail brand collecting customer data through online forms. Under the DPDP Act, it must ensure that the collected data is stored securely, accessible only to authorised personnel, and protected from potential cyber threats. This not only involves technological upgrades but also requires a cultural shift within the organisation to prioritise data security.

The DPDP Act requires the storage and processing of ‘critical personal data’ within India's boundaries. This can be a challenge for businesses with global operations, demanding changes to data infrastructure. The phase-out of third-party cookies by the end of 2024, which coincides with the DPDP Act, deals a double blow to advertisers who rely on personalised targeting.

Check before you call

The DPDP Act imposes strict penalties for violations such as unsolicited calls, misleading consent forms, and hidden data tracking. This has forced marketers to rethink how they design their campaigns. They must now ensure that all customer interactions are transparent and that consent is explicitly obtained.

Take the case of a company running an email marketing campaign. It will need to provide clear information about data usage and obtain double opt-in consent from subscribers to comply with the law.

Marketing automation and analytics tools, which have become essential in the digital age, must also be scrutinised. Marketers need to work closely with technology providers to ensure these tools comply with the DPDP Act. This might involve updating software, modifying data processing workflows, or even switching to new tools that offer better compliance features.

Opportunities amidst challenges

While the DPDP Act presents significant compliance challenges, it also opens up new opportunities for marketers. One of the most promising is the potential to build greater trust with customers. In an era where consumers are increasingly aware of their data privacy rights, brands that prioritise data protection can differentiate themselves from competitors.

Adhering to the DPDP Act sends a strong signal to consumers that a brand is committed to responsible data practices. This can enhance a brand's reputation and foster loyalty. For instance, a financial services company that transparently communicates how it protects customer data and obtains clear consent for data use is likely to earn the trust of its clients.

Moreover, the Act encourages marketers to focus on data quality rather than quantity. With stricter regulations on data collection, marketers are incentivised to collect only relevant, high-quality data.

This shift can lead to more effective and targeted marketing campaigns. So, instead of collecting vast amounts of data with questionable accuracy, a travel company might focus on gathering precise information about customer preferences and behaviours, leading to more personalised and successful marketing efforts.

The DPDP Act incentivises the development of a sophisticated first-party data strategy. Marketers can focus on gathering important information directly from users via website forms, loyalty programs, and surveys.

Marketers may use contextual targeting tactics, which review user behaviour on a website or app rather than personal data, to provide appropriate ads. The need for compliance can also drive innovation in data handling practices.

Marketers are exploring new strategies and technologies that enhance data privacy and security. Blockchain technology, for instance, offers a secure way to handle data transactions, ensuring transparency and reducing the risk of data breaches. Similarly, AI-driven tools for anonymising data can help marketers use customer information without compromising privacy.

Designing precise campaigns

To comply with the DPDP Act and execute successful campaigns, marketers must adopt a meticulous approach. Clear and concise consent mechanisms are essential.

This involves crafting consent forms that are easy to understand and explicitly state how data will be used. For example, an e-commerce brand could implement a double opt-in process for its newsletter, ensuring that customers are fully aware and agreeable to receiving communications.

Transparent data usage policies are another critical component. Brands must communicate openly about what data is collected, how it is used, and with whom it is shared. This information should be readily accessible, such as in the privacy policy section of a website or app. Providing such transparency can help build trust and reassure customers that their data is being handled responsibly.

Regular compliance audits are vital to ensure that marketing practices adhere to the DPDP Act. These audits involve reviewing data collection methods, storage solutions, and access controls to identify any compliance gaps. For example, a telecommunications company might conduct quarterly audits to ensure that all customer data is stored securely and that any third-party vendors it works with are also compliant with the Act.

Embracing transparency and accountability

The DPDP Act is more than just a set of regulations to follow; it represents a shift towards greater transparency and accountability in data handling. Compliance should be seen as part of a broader commitment to ethical data practices. This involves educating employees about the DPDP Act and their roles in maintaining compliance through regular training sessions.

Engaging with customers to understand their privacy concerns and addressing them proactively is also crucial. This can be done through customer feedback mechanisms, surveys, and open communication channels. For instance, a social media platform might implement a feature that allows users to easily manage their privacy settings and provide feedback on data usage policies.

Adopting industry best practices for data protection and privacy is essential. This includes implementing Privacy by Design principles, which integrate data protection into the development process of new products and services. Conducting data protection impact assessments (DPIAs) for new projects and campaigns can also help identify and mitigate potential privacy risks.

As the digital landscape continues to evolve, the DPDP Act serves as a reminder that responsible data practices are not just a legal obligation but a crucial component of building a sustainable and ethical business. By navigating these new regulatory waters with care and commitment, Indian marketers can turn compliance challenges into opportunities for growth and success.

Devesh Gangal, senior marketing manager, Seclore.