Privacy Remains a Concern for Online Consumers

Even among experienced Web users, sites that ask for personal information are likely to be abandoned, according to research by Statistical Research, Inc. (SRI).

SRI’s study “How People Use the Internet 2001,” found that two-thirds of active Web users typically abandon a site that requests personal information — 65 percent of experienced users and 72 percent of those who are relatively new to the Internet. In addition, 21 percent of Web users have entered false information to gain access to a site.

At least half of Internet users interviewed by SRI claimed they were “very concerned” about the misuse of credit card information given over the Internet, the selling or sharing of personal information by Web site owners and cookies that track consumers’ Internet activity. But 28 percent of Web users also said they would be “much more likely” to give personal information to a site with a guarantee against credit card fraud, and 26 percent reported that a prominent privacy policy provides similar reassurance. Internet users are also more likely to trust Web sites for chain stores where they shop or for products they buy.

A survey conducted by Market Facts Interactive in February among 1,823 respondents had found that U.S. online consumers were more comfortable providing credit card numbers and other personal information over the Internet than they were over the telephone. According to Market Facts, 56.9 percent of respondents said they were comfortable or somewhat comfortable providing credit card information over the Internet, compared to 43.5 percent by telephone. The results for providing other personal information (health, family history and income) were comparable, with 40.1 of respondents comfortable or somewhat comfortable providing such information online, versus 32.7 percent for telephone.

Other finding from the Market Facts survey include:

• 74.9 percent of respondents said they were concerned (“very concerned” or “somewhat concerned”) about spamming, 74.5 percent were concerned about the information they provide online being shared in unauthorized ways and 71.1 percent were concerned about their Internet use being monitored.
• 78.3 percent of respondents with children at home said they were concerned (“very concerned” or “somewhat concerned”) about “children having access to inappropriate information/Web sites.”
• 60 percent of respondents agreed that the existence of a Web site privacy statement/policy made them feel more confident that personal information would not be shared in unauthorized ways. Women (64.5 percent) agreed more strongly with this statement compared with men (55.6 percent).
• 80.8 percent of respondents said they agreed (“strongly” or “somewhat”) with the statement, “The benefits and potential of the Internet outweigh its drawbacks and potential problems.” Men indicate a higher level of agreement with the statement (84.5 percent) than women (77.3 percent).

Consumers’ anxiety about their personal information may be partly responsible for the lack of adoption of personalization technologies, despite a survey by Cahners In-Stat Group, which found the idea of personalization for business interactions was viewed favorably.

“Personalization technologies offer a means for businesses to make online interactions more meaningful and effective,” said Kirsten Cloninger, industry analyst with In-Stat’s eBusiness Group. “However, businesses are still wary of infringing on consumers’ privacy rights so adoption has been modest in the corporate market.”

According to In-Stat, the number of corporate market businesses (100 or more employees) that are planning to use personalization technology will almost double by 2002, up from 22 percent to 43 percent. In the small companies market, 9 percent of small Internet-accessing companies reported that they currently use personalization technologies. Almost two-thirds of middle market and 80 percent of enterprise respondents indicated that preference-based personalization was not an invasion of privacy when used for business reasons.