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.
 

Snowden revelations threaten U.S.-EU data transfer deal

A data-sharing agreement between the European Union and the United States should be invalidated after the revelation of mass surveillance programs uncovered thanks to the efforts of Edward Snowden in 2013, according to Advocate General for EU Court of Justice Yves Bot.
The agreement to which Bot refers is the Safe Harbor decision from 2000. It allows US companies to self-certify that they comply with EU rules governing the transfer of data related to European citizens to other countries, like the US.
“The access enjoyed by the United States intelligence services to the transferred data constitutes an interference with the right to respect for private life and the right to protection of personal data,” Bot stated in an opinion published this morning. This means Safe Harbor is “no longer adequate” and “the decision adopted in 2000 was no longer adapted to the reality of the situation.”
The opinion was published in response to a complaint brought against Facebook by privacy advocate Max Schrems, who says the personal data of European citizens has been made available to U.S. intelligence agencies via the social network.
Schrems has welcomed Bot’s recommendation, saying in response that “This finding, if confirmed by the court, would be a major step in limiting the legal options for US authorities to conduct mass surveillance on data held by EU companies, including EU subsidiaries of US companies,.” He also argues that invalidating Safe Harbor is a leveling of the playing field:

Self-certification under safe harbor gives US companies an extremely unfair advantage over all other players on the European market that have to stick to much stricter EU law. Removing ‘safe harbor’ would mainly mean that US companies have to play by rules that are equal to those their competitors already play by and that they cannot aid US mass surveillance.

It’s important to note that Bot’s opinion is non-binding, though the court is said to often side with the advocate general. Facebook wouldn’t be the only company affected by the invalidation of Safe Harbor, either; it would affect all companies that transfer data about European citizens to servers located in the US. The BBC reports that a decision like this could affect an estimated 4,000 companies.
In response to a request for comment, a Facebook spokesperson said the company “operates in compliance with EU Data Protection law.  Like the thousands of other companies who operate data transfers across the [A]tlantic we await the full judgement.” And, in response to complaints that data is transfers is given to US intelligence agencies through surveillance programs:

We have repeatedly said that we do not provide ‘backdoor’ access to Facebook servers and data to intelligence agencies or governments.  As Mark said in June 2013, we had never heard of PRISM before it was reported by the press and we have never participated in any such scheme.

The court’s judges are expected to make their own ruling later this year.

U.S. may extend some privacy rights to Europeans

EU justice chief Viviane Reding has welcomed a proposal by the Obama administration to give Europeans a right to judicial redress if their data, sent to the U.S. by authorities in their home country, has been abused.

Mode raises $2M and opens ‘GitHub for data’ to the public

Mode is trying to do for data scientists and analysts what GitHub did for developers by giving them a place where they can find, collaborate and work on data. Formation8 led the new round, which also included Reddit’s Alexis Ohanian.

Senate Hearing: Apple, Google and the Future of Mobile Privacy

Senator Al Franken (D-Minn.) chaired the Senate Judiciary Subcommittee meeting today called “Protecting Mobile Privacy: Your Smartphones, Tablets, Cell Phones and Your Privacy.” Apple’s Bud Tribble and Google’s Alan Davidson provided testimony, along with a number of other industry and government witnesses.

Today in Connected Consumer

It’s not exactly new news, but questions about online privacy are again coming to the fore as consumers and businesses increasingly turn to cloud-based services to help manage their data. Services like Twitter’s @anywhere and Facebook’s “Like” button mean ever-more personal data sharing between and among different web sites, adding to the complexity of ensuring privacy. Next month, U.S. regulators will jump into the fray as the National Telecommunications Infrastructure Administration holds its first public hearing on the nexus of privacy and innovation in the Internet economy. There’s a long way to go on this one still.