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Artificial Intelligence: Correcting an image problem and connecting with customers meaningfully

Identity management in the age of personalization & privacy

Vince Jeffs,
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In today’s digital age, personalization has become the driving force behind many online services and businesses. Businesses want to identify their customers and form a deep understanding of their behaviors, and then differentiate on their ability to interact and serve them in meaningful ways. To do this, companies gather vast amounts of device and other data to create tailored experiences, recommendations, and targeted marketing. However, this desire to personalize has led to growing concerns about intrusion of privacy and data security. Striking the right balance between reasonable data gathering, accurate identity management, and preserving user privacy is a critical challenge for firms. There’s a clear need for brands to accurately identify individuals across various digital devices and store memory of customer attributes and interactions, while respecting their preferences and privacy.

The growing significance of personalization

Personalization has the power to revolutionize the way businesses interact with consumers. Companies that want to stay a step ahead strive to pick the right solutions to deliver personalized experiences that cater to individual preferences, offer relevant content, and provide engaging experiences. Yet, finding the right data and feeding it to the right solution is daunting. The digital landscape is flooded with diverse choices, leaving many brands overwhelmed by the sheer volume of data and software products available.

And the demand for personalization is evident across sectors, ranging from retail firms, to banks, and even health care companies. Online retailers use personalized product recommendations to increase sales and customer loyalty. Telecommunication firms use it to offer personalized bundles to reduce churn. Streaming platforms curate content based on users' viewing history and preferences, leading to increased user engagement.

The ability to identify users across multiple devices is essential for creating seamless and personalized journeys. For instance, when a user switches from their mobile phone to a laptop, businesses can continue providing relevant content and recommendations based on the user's previous interactions.

Enterprise personalization solutions

To achieve real-time personalization, companies often rely on sophisticated software solutions and platforms. According to Forrester’s 2022 Real-Time Interaction Management Wave1, some of the leaders and strong performers serving large enterprises include:

  1. Pegasystems: Pega provides a solution called the Customer Decision Hub. It enables firms to use AI to arbitrate next-best actions and execute those across a wide variety of channels and customer journeys to achieve hyper personalization.
  2. SAS Institute: SAS Customer Intelligence 360 is a cross-channel campaign management and real-time personalization solution that enables companies to use analytics to make decisions for not only customer engagement but also operational use cases like fraud management.
  3. Salesforce Marketing Cloud: Salesforce offers a real-time personalization tool (called Personalization) and a customer data platform (called Data Cloud) that allows businesses to build profiles and deliver personalized experiences across channels like email, mobile and web.
  4. Adobe Experience Cloud: Adobe offers a suite of tools that enable businesses to deliver personalized messages across various digital channels. Their solutions include Adobe Experience Platform, which builds customer profiles, and tools like Adobe Campaign & Adobe Experience Manager, which deliver offers and content to customers through channels like email and web.

Challenges in identity management

Accurate identity matching across devices is crucial for curating an accurate view of customer behavior to provide seamless and personalized experiences. But it’s fraught with challenges. People interact with multiple devices daily – sometimes their personal device, but oftentimes some other device they don’t own - and businesses must be able to link these activities to the right individual to create a unified and accurate customer profile. Traditional fields used to match, such as email addresses or phone numbers, may not be enough, as people often use different emails or numbers on various platforms. In addition, they don’t always login, and since they’re more prone than ever to block cookies or other tracking, businesses often struggle to achieve high match rates to link visitor activities across devices to create a unified profile.

Moreover, the rise of privacy-conscious users and stringent data protection regulations like the General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), and Apple’s Intelligent Tracking Prevention has made data collection and user tracking even more complex. And data breaches and misuse of personal information have eroded consumer trust in online platforms.

A growing trend is to clean up the collection methods used for first-party data, and then place more reliance on it. That way, when onboarding other data using a service like LiveRamp, match rates will be higher, and the data merged into the profiles will be more accurate.

Balancing personalization with privacy

Companies now face the delicate task of obtaining consent while ensuring user privacy remains intact. Striking the right balance between personalization and privacy is a delicate dance, but essential for maintaining strong customer relationships and complying with data protection regulations.

The Cambridge Analytica scandal in 2018 exposed the dark side of data collection, where personal information was harvested without proper consent and used for manipulative purposes. This incident sparked a global conversation about the necessity of safeguarding user privacy while still leveraging data for personalized services.

Obtaining explicit consent from users before collecting and processing their data is crucial for maintaining trust. Transparent and clear privacy policies are essential in explaining to users how their data will be used, who will have access to it, and how it will be protected. By empowering consumers to make informed decisions about their data, companies can build stronger, more trustworthy relationships with their customers.

The use of Pseudonymization, Anonymization, and clean rooms

Pseudonymization and anonymization techniques offer potential solutions to the challenges of identity management and privacy preservation. Clean Rooms offer a safe (neutral) site, where certain data can be shared without the risk of exposing PII.

Pseudonymization involves replacing personally identifiable information (PII) with a unique identifier or pseudonym, making it more challenging to link data back to an individual without additional information. Anonymization, on the other hand, involves removing or encrypting PII to ensure the data cannot be attributed to a specific person. Bring-Your-Own-Key is another approach, where PII data is encrypted when moved or uploaded to a vendor’s cloud, where only the firm’s personnel have access to these keys, ensuring the vendor, or anyone hacking into the vendor’s cloud can’t decode the data.

A Clean Room can be used to gain insights on marketing key performance indicators, like reach and frequency, without exposing first-party data.

By implementing these techniques, businesses can still gain insights from customer data and associated marketing programs, while reducing the risk of exposing sensitive information. Furthermore, adhering to privacy regulations becomes more manageable, as the data used in these circumstances is no longer directly tied to individuals.

Identity management strategies going forward

In an era of hyper-personalization, accurately identifying individuals behind various digital devices is crucial for businesses to deliver seamless, personalized experiences. Yet this must be done responsibly, with utmost respect for user privacy. By adopting best practices for first-party data collection, identity matching, and using techniques such as pseudonymization, anonymization, and clean rooms, firms can strike a balance between personalization and privacy, ensuring consumer trust and compliance with data protection regulations. Empowering customers with consent and transparency ensures they can make informed decisions about their data.

Maintaining privacy while providing personalized experiences is an ongoing challenge, but it is one that companies must address to thrive in the digital age. By putting consent and transparency at the forefront of their identity management strategies, businesses can navigate this delicate landscape and cultivate lasting relationships with their customers.

1Forrester,, May 2022.


Area prodotto: Customer Decision Hub Argomento: Esperienze clienti personalizzate Industry: Intersettoriale Sfida: Customer Engagement

Informazioni sull'autore

Vince Jeffs, Pega’s senior director of product strategy for AI & Decisioning, has spoken at numerous conferences and written extensively on the subject of AI and customer engagement. Through his 30+ year career he’s been at the forefront of the customer experience evolution and revolution – designing and implementing AI solutions directed at optimizing customer value.

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