GDPR Just Killed the Growth Hacking Industry – Adotas

As of May 25, 2018, all citizens of the European Economic Area gained the right to have their personal data protected. The General Data Protection Regulation (GDPR) was established in April 2016 by the European Union, and after being implemented in all member states, the regulations ensure personal data cannot be stored, processed, or used without clear consent.

This is great news – just not for an industry that relies on exploiting consumer data. Digital marketing and data-driven insight go hand in hand, and GDPR regulations could sabotage the next wave of growth hacking products and strategies. And the fines for not complying with these regulations are severe, meaning your marketing strategy must change to avoid suffering the losses.

The Major GDPR Marketing Impact

GDPR has turned a valuable asset, customer data, into a hot potato. As Bamf Media’s co-founder and growth hacking expert Josh Fechter points out, European countries have become too risk-averse. With these new restrictions, ambitious startups may not have as much potential to flourish.

And it’s not just the new guys getting hurt: Companies’ main focus could shift from innovation to not getting fined. Even if they don’t get penalized, the fact that it’s top of mind for customers puts everyone on edge.

Growth hackers, whether they’re developers, marketers, or advertisers, often have to find innovative solutions to do more with less, which means cutting corners. Because they can no longer store personal emails in a Google Sheet or join personal data with outsourced data providers, growth hackers will be limited to fewer resources in the development process.

The Evolution of Growth Hacking

Growth hacking is commonly associated with one-off shady tactics, but that’s just part of the story. Following a formula and playing by the book is a recipe for mediocrity. The first growth hackers would reverse engineer Craigslist to force an integration with Airbnb or spam address books to invite individuals’ friends to Facebook.

People are just now catching on to the techniques that allowed these companies to thrive. Everyone wanted to be Mark Zuckerberg until Cambridge Analytica highlighted the downside to growth at all costs. Uber was a Silicon Valley success story until it got hit by the very policies responsible for its growth.

Ideally, there’s a way to create an empire within a restricted system. You shouldn’t have to become a vigilante to succeed, but it’s hard to deny the effects these “sketchy” practices have had.

The Bright Side

The plus side of all this? The term “growth hacker” might regain its value. It became a taboo phrase when deceitful actors hijacked the term to mean “no rules.” These rogue hackers thought they could use whatever methods necessary to gather data.

While we thankfully never got into the unethical side at Ladder, we abandoned the term because, as helpful as some “black hat” tactics are, they are usually unsustainable. You can only spam your LinkedIn contacts so many times before they get annoyed. If current marketers stop depending solely on personal data, they can develop an ethical, legal, and effective marketing strategy.

What Can You Do About It?

Fortunately, breaking the rules isn’t the only way to succeed. A smart business can gain leverage by outsourcing data management to tools like HubSpot and Shopify. With the right tools, you never even have to look at a user’s email address to run an effective campaign.

That said, it’ll be difficult to enforce these rules at smaller companies. Bigger corporations can afford complex systems for keeping tabs on potential violations, but at smaller businesses, all we can do is train our staff and hope for the best.

Being Proactive

Ultimately, the first step for marketers is following the “surface” definition of compliance. That means making sure they don’t store personal data and have the right access levels. We wrote a blog post about GDPR detailing our efforts to meet the guidelines, but again, these are just the basics. Most companies are still in the dark about what compliance actually means. Everyone’s just waiting for the first company to get sued. Then we’ll know where the line is.

In the meantime, growth hackers’ primary objective should be to respect their customers. The new regulations may be blurry now, but it’s imperative that marketers carefully consider how their data practices affect their consumers. Hopefully, if your business model emphasizes integrity over malicious and exploitative measures, you’ll be given the benefit of the doubt in this new era.