Editor’s note: Terry Wiley is CEO, Asia Pacific, of market research firm Lightspeed GMI, Sydney. This is an edited version of a post that originally appeared here under the title, “Data-driven marketing and the privacy paradox.”
As our lives become ever more digitally-focused, so do the means of technologically that amplify our reach to consumers. Data-driven marketing is now commonly accepted as standard practice for the industry. This is no surprise, as the online world intertwines with the physical world through the devices we have come to rely on.
Our phones not only show us how to get somewhere but also track our location. Our computers help us locate our next purchase and also record our Internet searches. With the introduction of time-savers such as automated smart refrigerators, it is no wonder that marketers, researchers and consumers are all excited by the prospect of convenience brought by technological advances.
This advancement comes with great responsibility for marketing researchers ensuring protection and interaction are carefully balanced. Privacy has long been discussed in online market research, and rightly so. The conversation has gone from protecting personally identifiable information to more recent developments in the serving of cookies. As the world becomes more digitally driven, the number of ways to collect data and the appetite of brand owners seeking and utilizing data has exploded. The need to understand and uphold privacy standards is more pertinent than ever.
From a business perspective knowing what people are looking at, engaging with and creating can provide in-depth insights into their potential buying behavior and other consumer-driven decisions. But how much is beneficial for the individual consumer? How much is dangerous?
According to Truste, 87 percent of consumers polled are hesitant about data being gathered and used for corporate purposes beyond their knowledge or permissions, in comparison to a recent Lightspeed GMI survey which found a lower concern at 68.5 percent panelists, perhaps as a reflection of a slightly more online segment.
There have been arguments that consumer hesitance toward data collection is beginning to lower further due to the intimate relationship we have with our devices. However, our study shows that 70 percent of respondents are very concerned about data privacy on their smartphones specifically, in comparison to 58 percent on PC and 55 percent on tablet.
Consumers are not afraid to act on these concerns, with a 59 percent average deleting cookies, messages or browser history to control their security risk. Deloitte found that 70 percent of consumers would consider breaking off a relationship with a brand if that company failed to protect their data. Another 56 percent said that selling anonymized data – information that has had personal identifiers removed – would result in similar decisions.
Sixty-five percent of global panelists believe current regulations are not good enough. Privacy reforms in light of data growth are key areas of business ethical and legal policy. In fact, we saw the Privacy Amendment (Enhancing Privacy Protection) Act 2012 take effect. Why the reform? Because, as ADMA’s Jodie Sangster sums up, the world was a different place when the 2001 legislation was passed – there was no social media, online and mobile data. It needed to be reformed in order to reflect the current environment.
Many of the concerns about data collection are related to a lack of understanding and knowledge of how their information will be used. “The lack of transparency as to what’s being done post-data generation causes a lot of fear,” said Kord Davis, author of Ethics of Big Data.
Sixty-six percent of our respondents would like to be more informed about how their personal data may be used. Common sense, for the most part, tells us that if we ask politely for something reasonable – with some rationale – our request will be granted. Ask respondents or customers for the information rather than just taking it.
More so, it is about using it in a way that makes sharing the data useful to the consumer in their future actions and experience. That’s OK and the consumer will appreciate this seamless, mutually beneficial transaction. As Nick Bowditch brought to life at AIMIA’s Future of Digital Advertising, we appreciate walking into our local bar where the bartender knows our favorite drink and already has it poured. But it would be weird if he had the same drink in our kitchen when we came home from work. There is a fine balance between being relevant and being creepy.
ACCC Chairman Rod Sims recently said, “Our action in this area serves a dual purpose. When advertising is untruthful consumers are misled and honest traders are put at a competitive disadvantage.”
The consequences are grave, as Google found out the hard way. Privacy issues around many public places in the U.S. ultimately led to the demise of the Google Glass project in January of this year.
Privacy will remain at the forefront of our activity, this is clear. A certain level of hand-holding is necessary – from data suppliers to brand owners, marketing insights teams to the consumer. As technology revolutionizes our access to data, it will also bring reforms and amendments to policies that protect everyone involved in this multi-way relationship. Connecting while protecting is imperative and it’s up to us all to get it right.