A new study out of the University of Pennsylvania (U Penn) has concluded that most consumers do not give up their data out of a sense of reciprocity with brands offering incentives as many marketers believe, but out of a sense of resignation that their data is beyond their control.
The study, which sampled a race and gender representative group of 1,506 Internet-using Americans in a phone survey found that 91 percent of the population disagrees with the statement, “If companies give me a discount, it is a fair exchange for them to collect information about me without my knowing.” Furthermore, 41 percent of survey respondents indicated that they want more control over their data but admit to believing that they have little control over what data marketers are allowed to collect.
Dr. Joseph Turow, a communications professor at U Penn and one of the authors of the study, calls that sense of helplessness in consumers “resignation,” or the belief that marketers will collect data no matter what.
“You can see [from the study] that a large proportion of the America population is resigned,” Turow says. “A relatively small proportion believes in tradeoffs. And the thing is when consumers are giving data to a company, no one can tell from outside watching the person whether they’re doing it out of resignation or whether they’re doing it for incentives. Marketers have been happy to say that it’s all because of tradeoffs, but we’re suggesting that given the large percentage of Americans that are resigned and the small percentage that believe in tradeoffs that really when you see people doing this it’s really because of resignation.”
But John Cain, global head of consumer intelligence and emerging analytics for SapientNitro, says that merely applying the term “resignation” to the complicated problem of data and privacy might be oversimplification.
“To say there’s resignation is too simplistic,” Cain says. “What’s at issue here is that most people don’t know what they’re giving up or how it’s going to be used. I don’t think we have the language yet to talk about this. I think the reason we’re in the midst of a big debate around this data is because people are just realizing that what they’ve been giving up has value. There might be a scary end to this in five or 10 years that we didn’t see to today,” he adds.
According to the study, Cain is correct to assert that there is a growing fear that companies may eventually use data to harm consumers. Nearly three quarters (72 percent) of respondents rejected the statement “what companies know about me from my behavior online cannot hurt me.”
In fact, Turow believes that misuse of data could move America into a kind of new segregation based on marketing profiles inaccessible to consumers. For example, charging Mac users more for airfare than those who browse with a PC.
“Do we want to live in a society where increasingly people worry that the prices they’re seeing online are not what other people are seeing in the public sphere?” Turow asks. “The center of much of American culture is being changed, so that literally, discriminatory practices are taking place. What was the dominant center of a certain kind of commercial democracy is being eroded. And so what I’m suggesting is that while individual companies are making hay out of a lot of this data, there may be larger damage in the long run to the entire commercial system.”
The solution, both Cain and Turow agree, is a public that is informed about what data companies are collecting and how they’re using it. Right now, breakdown in communication between brand and consumer in the form of lengthy, hard to decipher service agreements, is allowing companies to exploit data.
“There’s no way a regular person can understand this. There should be people who interpret for them. And there are some cases where the Federal Trade Commission may have to step in and say, ‘Hey is there a line to be drawn here,” Turow says.
While Cain doesn’t feel that government involvement is strictly necessary, he does advocate for stricter industry standards. “There definitely shouldn’t be reflexive legislation. But it is incumbent upon the brand that collects the data to clearly and transparently define what is being collected, how they plan to use it, and what they’re offering in exchange,” he says.
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