Consumer Data: Are Attitudes about Sharing with Brands Shifting?

You don’t have to have been an internet user fifteen years ago to know things were different then; it was the time of dial-up and buffering videos, when ecommerce was novel and social media had yet to lay its claim on our souls. Personal data was something to be guarded closely and so when ad platform DoubleClick purchased catalog data collection agency Abacus, the first major privacy scandal of the digital age erupted. Privacy advocates rallied against merging offline and online data and ultimately inspired a set of rules that would help safe-guard personally identifiable information (PII) from marketers.
Fast forward 15+ years and behavioral and location targeting are standard fare in advertising. Marketers are using in-store transaction data to optimize digital retention programs and, conversely, gauging the success of online campaigns with in-store data. Yes—they are marrying online with offline data, the same idea that ignited the milestone scandal. This widespread shift recently prompted privacy expert Allen Chappell to raise the question whether or not it was time to revisit the controls put in place as a result of the DoubleClick/Abacus deal.
More intriguing is the fact that, unlike fifteen years ago, consumers are now freely and frequently sharing personal photos of their pets, homes and children, announcing political and religious views, medical conditions and their location online. They’re surrendering personal information for the sake of learning what their zombie name would be, or what career they might have had had they been born left-handed. Is it possible that the tide against sharing has turned?
A new study released by Columbia Business School and AIMIA investigates this. “What is the Future of Data Sharing: Consumer Mindsets and the Power of Brands”, authored by Matthew Quint and David Rogers, surveyed 8000 respondents across four generations (Millennials, Generation X, Baby Boomers and the Silent Generation) and five countries (US, UK, Canada, France and India) to gain insight into what, how, and why consumers are willing to share their personal data with companies.
By examining attitudes around different kinds of data—name, address, phone number, email, purchase history and lifestyle info—the study showed that consumers are able to make distinctions between personally identifiable and other types of information, and that they understand sharing some data points makes them more vulnerable than others. However, even with this knowledge, 70% of those surveyed would still consider sharing that personal information. They offered a framework on which to better understand the range of attitudes around sharing.
The Data Sharing Mindset
By comparing respondents’ level of defense and happiness about sharing, the study identified identified 4 “data-sharing mindsets”.
DataSharingMindsets_ColumbiaBusinessSchoolStudy
“Defenders”, or those that are unwilling to share data and/or take defensive action against sharing (such as giving false information or making efforts to limit how they are tracked online) represent the largest of the four segments. Still, their active resistance leaves them in the minority; 67% of those surveyed were either willing to share data or, somewhat pessimistically, resigned to sharing it. While it didn’t prevent consumers from sharing, that negative attitude toward sharing characterized the majority (66%) of respondents.
So, essentially, consumers are sharing data even when they aren’t necessarily “happy” about doing so. What, then, is driving this action?
The Motivation for Sharing Personal Data
Naturally, trust plays a role here; 75% of those surveyed were more likely to share data with a brand they trust. The study presented a fairly optimistic view of the state of brand and consumer relations in that most of those surveyed acknowledged at least one brand they trusted across the six industries presented, including Financial Services, Retail and Airlines.
BrandTrust_ColumbiaBusinessSchoolStudy
Interestingly, Financial Services stood out as the industry for which most consumers identified a trusted brand, perhaps suggesting they believe that these companies are more conscientious when it comes to safeguarding the information with which they are entrusted.
Another key factor is value. The study showed that offers have an influence on whether or not consumers shared data with brands, as well as what data they shared. An offer might entail signing up for a newsletter to get a discount, registering for a “shopping club”, joining a loyalty program, or gaining access to special events. Not surprisingly, financial incentives like cash back and discounts scored most effective. (In a sense, this becomes more of a barter than sharing. Along these lines, as authors Quint and Rogers noted, the World Economic Forum is researching personal data’s potential as a new asset class.)
The study also recognized the trend toward “non-traditional, data-enabled benefits”, such as Security, User Experience, Societal and Insight benefits.  Product recommendations, as offered by Netflix and Amazon, fall into this group. So do services like Mint and Billguard which, in their promise to support financial decisions, aggregate data that’s more sensitive than your late night Narcos binge-viewing. And, any content marketer will find validation in the role that Insights play in acquiring customer data. (There is some irony in the fact that, among the non-traditional benefits that drive consumers to share their sensitive personal information, Security topped the list.)
Sharing is Not a Reflection of Comfort
Despite a willingness to share, the survey reflects the general sense that consumers aren’t comfortable with how companies handle their data. Even among Millennials who—correlating to a recent Nielsen survey—weighed in as the most trusting age group, only 51% felt comfortable with how companies handle data. And, across generations, the vast majority of those surveyed expressed the desire to have more information about the data companies collect (85%) and (86%) wanted greater control over that data. The study posits that “due to increasing attention drawn to data theft, loss and monitoring… many people with Happy Go Lucky or Resigned mindsets in the past would have become Savvy and In Control or Defenders.”
The recent surge in downloads of ad blocking applications supports this. While the IAB and Digiday have each noted the motivation for ad blockers is more about user experience than privacy, the act of downloading—and even paying to download—ad blockers demonstrates that consumers are more aware of, and increasingly taking action against, unsatisfying relationship with brands online. This, in turn, puts brands on the defensive. What can they do to to make consumers more comfortable?
What the Future of Data Sharing Means for Brands
Just because consumers share pictures of their family vacation on Facebook or pin their Thanksgiving dinner menu, brands shouldn’t assume that they’ll benefit from any general trend toward sharing. Instead, they need to focus on building trust, which means being transparent about their collection and use of data and respectful of consumers’ fear and desire for control. This isn’t groundbreaking stuff, and in broad strokes mirrors the guidelines that came into play some fifteen years ago.
More exciting, however, is the opportunity to create data-enabled incentives that make sharing with brands worthwhile, and maybe even irresistible, to consumers. This is both compelling and challenging because, unlike the traditional email-for-discount exchange, the best expression of data-enabled incentives isn’t one-size-fits-all. Some will be experiential and deeply tied to the product—think of anyone who has easily surrendered their location to catch an Uber—while others might be more complementary. For example, Saatchi’s recent “Digital Pawprint” campaign aims to match users with their perfect pet by targeting banners based on digital behavior.
Either way, brands are challenged to dig deeper. They must apply the insight they already have on audiences to construct worthwhile incentives that draw further insight and, ultimately, grow their business. By offering creative and value-driven benefits, supported by transparency and trust, brands can build a more meaningful exchange with consumers today. They’ll also be better prepared for the next, bigger wave of data that’s coming with our wearable and IoT future.
 

Real-time brand tweeting is an art, not a science

As everyone knows, there’s a second kind of competition going on during the Super Bowl, and it has nothing to do with football, commercials, or puppies: The Twitter Bowl. Which brand can win the pithy, real-time Twitter conversation?

Oreo famously slam-dunked this in 2013 with its “dunk in the dark” tweet after the Super Bowl power went out. It received thousands of retweets and favorites and became a textbook case on real-time Twitter marketing.

This year, it looks like McDonalds and Buzzfeed were two such winners, according to social analytics company Social Radar. Among other things, Social Radar tracks the spikes and dips in Twitter activity around the Interbrand 100 Best Global Brands and Techmeme tech media leaderboard, analyzing the number of favorites, retweets, and replies to companies like eBay and The Washington Post.

During the 2015 Super Bowl, McDonalds was the cause of several big spikes which raised the engagement average for the entire Interbrand 100. It did so by tweeting live to other brands’ commercials, complimenting them and giving away the products free (even a car) to some of the people who retweeted them according to an AdAge story. Its own Super Bowl commercial wasn’t the most shared across social media sites — that honor went to Budweiser — but it claimed its crown in Twitter conversing.

Social Radar’s Tech Media Index includes top 95 tech media companies ranging from Bloomberg to Gigaom, as listed in the Techmeme leader board. Buzzfeed took the prize for top Twitter Super Bowl game. Not surprising given the company’s mastery of viral content and its substantial audience. Its peak tweets made fun of Katy Perry’s halftime show.

https://twitter.com/BuzzFeed/status/562069630492372993/photo/1

Buzzfeed and McDonalds didn’t necessarily have the most creative real-time tweets of the game. There were plenty of others who clearly planned in advance, like Cheerios, which tweeted a picture of a cheerio to represent people’s shocked open mouths during the final minutes of the game.

https://twitter.com/cheerios/status/562083246876684289/photo/1

Despite perfect timing and creative marketing, Cheerios’ tweet didn’t quite take off like those of McDonalds and Buzzfeed. It received hundreds of retweets and favorites instead of thousands.

Looks like real-time brand tweeting is an art, not a science.

Can media do for Snapchat what it did for Facebook?

Snapchat is distancing itself from its core messaging feature with its new Discover product. Instead of offering new communication tools, it’s focusing on media content to hook users. It’s hoping that will keep people on the app longer and get them there more frequently, the same way it did for Facebook.

The time is right. Discover’s launch comes a few weeks after I reported that growth in messaging apps has plateaued, according to leaked Comscore numbers.

In the new Snapchat section you can surf bite-sized text, video and photo updates from 11 different news organizations ranging from CNN to Vice. It’s slick, sophisticated and stylish. It’s also a big departure from the original app. You can get the rundown on the details here or here.

Is Snapchat moving on from messaging?

Discover isn’t just a new feature for the ephemeral messaging app, which has an estimate of more than 100 million active users. It’s a dramatic shift in product vision, one that suggests Snapchat is moving on from chatting. It’s not abolishing private photo sharing — the image screen is still the first thing you see when you open it — but it’s now parlaying people’s engagement with the app into more revenue-friendly features. It’s far easier to stick an ad in front of a Food Network clip than it is to stick one in front of personal messages from a friend.

Left: Snapchat's Discover section; Middle: Kik's chat option with Funny or Die; Right: WeChat's chat option with Louis Vuitton

Left: Snapchat’s Discover section; Middle: Kik’s chat option with Funny or Die; Right: WeChat’s chat option with Louis Vuitton

Unlike Snapchat’s messaging competitors like China’s WeChat or Canada’s Kik, the brand content in the Discover tab doesn’t come in the form of messaging at all. Instead, it’s a self-serve broadcast format. It’s staunchly a media product, not a communication one.

Brands can still chat with users in the messaging part of the app, but it’s not a cornerstone of the Discover ad cash cow.

Since Snapchat is the leader in messaging in the U.S., its shift in business priorities could also indicate a larger change in the industry itself. Is the future of messaging in the U.S. not actually messaging at all?

The messaging industry is stagnating

The Discover tab has been in the works for a long time, but it’s launching at the perfect time as Snapchat’s growth appears to have flatlined. Comscore numbers can be inaccurate on a point-by-point basis (most media organizations report bigger traffic numbers than Comscore has for them), but in terms of more macro growth trends they’re more reliable. The analytics company found that messaging apps across the board, from Kik to WeChat to Snapchat, have stagnated.

Comscore's Mobile Media Matrix 2015

Comscore’s Mobile Media Matrix 2015

It was looking only at the 18+ crowd, and messaging users skew decidedly younger. But given the fact that Snapchat in particular has saturated the youth audience, its growth should be coming from the 18+ set.

It’s fitting timing, then, for Snapchat to branch out like this. The app seemed to be distancing itself from its former core product in its Discover intro text for users.

One Snapchat explanation screen said, “This is not social media. Discover isn’t about what’s most popular. We count on editors and artists, not clicks and shares, to determine what’s important.” In other words, this isn’t about messaging or virality. It’s not about newsfeeds or friends. It’s about something rather old-fashioned: Editorial judgment.

[pullquote person=”” attribution=”” id=”910224″]Is the future of messaging in the U.S. not actually messaging at all?[/pullquote]

Furthermore, the brands in the Discover section aren’t all young and hip. Sure, there’s the Vice and Cosmo of the lot. But there’s also CNN and Yahoo News. These traditional organizations lend a mature air to what is otherwise a very fresh, youthful experience. Perhaps Snapchat is hoping to give its older users something more to look at.

snapchat-discover

Left: A screen from Discover’s People section; Middle: From Discover’s Food Network section; Right: From the Daily Mail.

Snapchat wants to make money with media, not messaging

It’s no surprise that Snapchat thinks it will make more money off media than it could off messaging. Facebook discovered the same thing after a few years of running its newsfeed product. People stuck around and spent more time on the site when they had more content to look at than just baby pictures and wedding albums. That in turn made advertisers willing to pay more for the eyeballs.

Snapchat wants media content to have the same effect on its audience, but it’s taking a very different approach. As it emphasized in its intro text mentioned above, this isn’t about “most popular” it’s about “what’s important.” The unwashed masses will not decide that ice bucket challenges will rise to the top. Media editors and Snapchat employees will.

Facebook, Twitter, and Pinterest have a new, very different sort of competitor in the media-carrot-to-engage-users game.

Snapchat’s initial partners were thrilled to tell the world they were picked first for the Discover tab. I received multiple pitches this morning from companies like CNN and Fusion heralding exactly that. Fusion wasn’t included in the initial launch of the 11, so it’s a sign that more media brands (like MTV) may be coming. Aside from tapping Snapchat’s huge base of users and turning them into viewers, it also gives them the caché of being on the cutting edge.

But as always, media companies walk a dangerous tightrope in partnering with a tech application. As Mathew Ingram has written about many times, tech platforms’ interests haven’t aligned with media companies in the past. Although Facebook might have given big traffic boosts to organizations like Upworthy or Buzzfeed, it’s a tenuous agreement in the long term. The traffic a tech company giveth, it can easily taketh away with a tweak of an algorithm.

Snapchat is making its own risky bet. It’s hoping it can become a money-making platform by becoming a media source, even if that means making messaging less of a priority.

It’s a big shift for the company’s brand, image and functionality. Let’s see if it works.

Vine rings in its second year by hitting 1.5 billion daily loops

Video app Vine celebrated its second anniversary Saturday, prompting product head Jason Toff to share new metrics. The company is now seeing 1.5 billion loops, or plays, a day of its six second videos. That compares to the “more than one billion” daily it announced in October.

1.5 billion a day is a huge number. Multiply it by 365 days of the year and Vine is seeing more than half a trillion loops yearly.

But it comes with a caveat. Vine videos are set to repeat themselves automatically, so 1.5 billion loops doesn’t represent the amount of individual, unique views by new people. If someone leaves their feed unattended, the views can multiply quickly.

The most recent user number Vine released was 40 million registered users, in August 2013. The company notably left out monthly active users and as far as I can tell it hasn’t released new user metrics since. I’ve reached out to the company to confirm and will update if I hear back. It’s possible that user growth itself has stagnated on the application even as its video plays have grown. Lots of people consume Vines other places than the app, watching them on Facebook, Twitter, or even YouTube.

In terms of viewing, the new stats show Vine has grown from its earlier self as it matured as a video application. It’s a mainstay of entertainment for teenagers, giving them a second screen experience.

Although the company hasn’t introduced advertising, brands pay the top Vine celebrities, the stars with the most followers, to do product placement in their videos or even outright mini commercials. The six second limitation to the video has spurred new, creative forms of expression from stop motion art to its own genre of slapstick comedy.

As I’ve written about, the earliest Vine stars are graduating from the application, starting to land Hollywood TV show parts and record deals, parlaying their teen social media stardom to a broader, more mainstream audience. Vine’s owner Twitter hasn’t entirely managed to keep up. It’s ignored some of its biggest celebrities, perhaps to keep the app focused on average users instead of just highlighting the famous faces. But its better-funded competitors, like Facebook and Instagram, have started wooing the key content creators in Twitter’s absence.

In typical Twitter fashion, the Vine product has managed to grow in spite of its parent company’s potential pitfalls. As it rounds its two year mark, the application and its stars show no sign of slowing.

Snapchat’s chief money man left the company. But why now?

A week after news broke that Snapchat was charging $750,000 for one day of ephemeral ad placement, Snapchat’s head of revenue Mike Randall is out, according to a Re/Code report. Randall ran the company’s advertising endeavors for only seven months before his departure.

It’s unclear whether he’s leaving voluntary or if CEO Evan Spiegel forced him out. It’s also not obvious whether Randall’s departure is indicative of the company struggling with its nascent sales efforts, or if he just wasn’t a fit. I’ve reached out to the company for more information on what happened and will update this if I hear back.

Randall’s hire was originally a big boon for Snapchat since the company recruited him away from Facebook, where he oversaw advertising partnerships with app developers. At Snapchat, Randall reported to Emily White, another Facebook recruit who jumped ship for the ephemeral app. During his brief tenure he was responsible for the company’s “business and marketing partnerships,” i.e. its forays into advertising.

In the recent leaked Sony emails, information about Spiegel’s priorities and Snapchat’s business strategy came to light. Specifically, we learned that Spiegel was eager to start bringing in revenue for the company despite its young age. He believes a bubble pop is approaching in the app space and wants to make sure Snapchat can support itself before that happens.

Comscore stats that Gigaom obtained suggest the company’s growth among the over 18 crowd peaked in March and has been declining ever since. Snapchat’s biggest audience is youth but the company has saturated that market in the United States at this point. Given Spiegel has raised hundreds of millions of dollars in investment funding and turned down an acquisition offer in the billions from Facebook, it needs to build a viable company that can stand on its own.

Facebook waited seven years to introduce advertising, Twitter five, and Pinterest and Instagram four. Snapchat also comes in on the early-ish end at four years old.

Will Pinterest prove its worth in 2015?

The next year will be the most important one of Pinterest’s life. Until now, the company has focused on its application and its audience, to the detriment of its coffers. It had the luxury to ignore money because it raised a nosebleed $764 million in venture funding to sustain itself. Like most adventurous startups, the money was raised on an unrealized, untested, uncertain premise: That advertising on a visual inspiration application would be highly lucrative.

Come New Year’s Day, that hypothesis will be put to the test for the first time on a large scale. After endless preparation, Pinterest’s year of reckoning has arrived.

In 2015, any brands will be able to do native advertising on Pinterest by paying to promote pins that appear alongside regular Pinterest content. Companies can use Pinterest’s reservation-based system, paying set prices to make sure their ads appear in people’s feeds. The auction-based system, where advertisers bid against each other, is still in beta.

Pinterest has been beta testing reservation-based promoted pins with a select group of partners since September 2013, moving slowly to make sure it nailed its advertising process and didn’t scare off users. According to Pinterest’s blog post about the wider-scale release, the beta test was hugely successful. Like regular pins, promoted pins are shared an average of 11 times, resulting in additional free impressions for advertisers (they only cough up money for the initial impression). These pins continue to be seen and shared after the advertiser stops paying to promote them.

The quiet social company decided to herald its big advertising news when the least amount of people would see it: Over the holiday break. It broke the story by publishing a blog post that ran at the same time as a New York Times feature on the news.

This is par for the course for Pinterest. The company regularly holds big parties at its office to celebrate the introduction of new product features, but when it comes to its revenue stream it prefers not to raise a fuss.

It’s possible that Pinterest is nervous about its reckoning moment and wants to experiment with advertising outside the prying eyes of the public. It’s hard to get to a $5 billion valuation in Silicon Valley without having brought in a cent of revenue. At this point, the stakes are high for Pinterest’s investors and the path is risky.

In the next twelve months, we’ll learn for the first time whether investors overvalued Pinterest or if the company is worth the war chest of funding it’s sitting on. If it’s the latter, [company]Google[/company] better look out. It has another rival creeping up to compete in the category of search.

Pinterest’s image-heavy application may give it a distinct advertising edge in the visual web.