Recent research indicates consumer frustration over data privacy is rising, but there is no ‘one size fits all’ solution. Privacy in the digital age spans a variety of complex social and psychological issues. Marketers and advertisers who take the time to understand and respond to evolving technology and attitudes can help create an ethical environment that’s good for customers and good for business.
Consumers are concerned
According to Lee Rainie, Pew Research Center’s Director of Internet, Science and Technology, “The balance of forces has shifted in the networked age. People are ‘public by default’ and ‘private by effort’. Thanks to the Internet, we now live a world where anonymity is a luxury that requires mindful effort. What private information you’re willing to share likely depends on what the data reveals, who can access the data (e.g., government, businesses, advertisers, general public) and how they’re going to use it.
Pew’s 2014 Privacy Panel Survey reveals that a majority of American adults feel “very sensitive” about the privacy of their social security numbers and medical data. In other areas, like the websites you’ve visited and what you searched for on the Internet, fewer than 30 per cent of people reported they are “very sensitive” about revealing the data. In the same report, 74 per cent of people said being in control of who can get information about you is very import. Yet a large majority (91 per cent) of Americans agree or strongly agree that consumers have lost that ability to control their personal information.
Tradeoffs not entirely voluntary
The Pew study found most people accept there is a tradeoff between sharing personal data with companies and the benefits they get from accessing free online services. This acceptance could lead marketers to conclude consumers are happy to trade their privacy for the benefits of free web services or receiving more relevant advertising. However, a new report from the Annenberg School for Communication at the University of Pennsylvania paints a very different picture. The Tradeoff Fallacy report asserts “most Americans do not believe that ‘data for discounts’ is a square deal.” In other words, consumers don’t tend to relinquish their private data knowingly and willingly, but rather they feel helpless and resigned to the loss of control over their personal information.
The Annenberg report also dispels the theory that Americans may be so willing to part with their personal data because they are poorly informed about the details of digital commerce. On the contrary, the report found the more informed consumers become about marketing methods, the more helpless they feel and the more willing they are to trade data for discounts. The report warns that marketers who misrepresent the motivation for consumers’ willingness to trade private data can “give policymakers false justifications for allowing the collection and use of consumer data often in ways that the public find objectionable.”
The report also found that many people are unaware of how their online purchase and search data can be shared with third parties without their knowledge or consent. Perhaps this should be seen as a wakeup call for both individuals and online marketers about the future direction of ecommerce.
Pew found 68 per cent of people on the Internet said they feel current laws aren’t good enough to protect online privacy and 64 per cent believe the government should do more to regulate online advertisers. It seems probable that if online marketers don’t take more assertive steps to close the gap between consumer expectations and business practices, regulators may look to get more involved.
So what’s an online marketer to do?
Marketers who want to improve the uneasy truce with consumers have a variety of options for helping consumers feel more empowered about their personal data, including:
• Provide consumers with terms and conditions, and privacy statements, that don’t require a law degree to decipher.
• Locate privacy settings in an area of your site or application that are easy to find and navigate.
• Give customers access to what data you have about them and provide an opportunity to correct inaccuracies. For example, Google gives users the ability to review and download the data associated with their Google accounts.
• Don’t be afraid to talk about data usage with your customers. According to Andrew McDevitt, senior privacy consultant at TRUSTe, “privacy and trust should be two core pillars of your brand.”
• Establish a corporate culture where every team is viewed as a champion for responsible data usage. Even if a company has a Chief Privacy Officer (CPO), departments like Marketing, IT and Sales can all consider customer satisfaction with privacy to be a goal.
A June 2015 report from Altimeter Group, The Trust Imperative: A Framework for Ethical Data Use reminds us “We no longer live in a world where privacy is binary; it’s as contextual and fluid as the networks, services and devices we use, and the ways in which we use them.” The report provides a more extensive look at best practices for data privacy and offers a glimpse into what makes the topic of privacy so complex.
Consumer frustration over data privacy can be improved, but only if online marketers make a concerted effort to close the gap between customer expectations and current practices.