Is data safe in brands' hands?
From cautious communicators to savvy shoppers looking for deals, brands need to get their hands on our data. Laura Snoad looks at the steps companies are taking to convince us that sharing our information has its benefits.
Privacy is a divisive subject. Consumers are more worried about erosion of personal privacy than terrorism or climate change, according to a study by McCann Worldgroup. Yet at the same time, a new confident breed of shoppers is emerging, who expect brands to keep their data secure and communicate transparently about how using their data will benefit them.
With this contradictory attitude among the public, the UK government chose last month to launch Midata, an initiative which aims to give consumers increased access to their data in collaboration with British businesses. This aims to address privacy fears by alerting consumers to what information is held on them, while offering adept shoppers the chance to seek out the best deals.
The idea is that individuals will then be able to use their own data to gain insights into their own behaviour and so make more informed choices about products and services. Twenty-six companies and organisations have already signed up for the scheme including British Gas, EDF Energy MoneySupermarket, Callcredit Group, Google, and MasterCard.
MoneySupermarket managing director for financial services Graham Donoghue explains: “Allowing consumers to easily access this data in electronic format will allow them to understand whether the products they are currently using are suitable for their own requirements.
“Being able to understand their own spending behaviour should help people switch to more suitable products, and make the most of their finances. At a time when all UK households have been hit by the rising cost of living, any initiative that gives individuals more access to their own data in order to give them greater control must be welcomed.”
Anthony House, policy manager at Google Public Policy & Communications, agrees: “There’s pretty broad industry acknowledgement that we could all make data more transparent.”
But why are British consumers so concerned with their privacy and how data is used? According to McCann, the four factors that have driven new open privacy norms for consumers are:
i) The prevalence of technology;
ii) The omnipotence of over-sharing celebrities;
iii) The integration of social networking into modern civic life;
iv) A feeling that people are more difficult to embarrass than 50 years ago.
These new privacy norms may mean that people are being more open, but it does not make them less inclined to have concerns about their data and how it is used. Consumers worry most about the security of both their reputation and their finances, according to the research.
Somewhat surprisingly, consumers are more concerned about someone hacking into their computer and stealing their bank details (33%) than breaking into their house and stealing their computer (30%).
Perhaps unsurprisingly as a result, financial data is seen as the most central to a person’s identity, with only 14% saying that they would be willing to share that sort of data with a brand online, closely followed by medical data at 27%. On the other end of the spectrum, brands may be pleased to learn that 71% of people are happy to share their shopping habits, as this is seen as least linked to a sense of identity.
Location data is the most divisive amongst customers. Those that are acquainted with the world of smartphone apps can see the benefit of brands gathering information about where they are, in terms of finding local deals or finding the nearest cash point for example. Consumers that aren’t so familiar with smartphone use are anxious about brands knowing where they are.
Online brands are seen as the greatest threat to privacy, with Facebook, Twitter, Google and Ebay topping the least trusted list for consumers. But many online brands are upping their privacy credentials, in order to win trust.
Google’s House says: “For the past several years, we’ve tried to move beyond thinking about privacy in terms of a strict legal standpoint. We’re certainly not at the ideal yet but it’s an iterative process.”
Several years ago, Google started making videos about privacy topics and posting them to YouTube, as part of its Google Privacy centre.
House explains: “Because privacy is a rather dense issue, reader attention is very short when it’s very technical information. Our entire business is built online so our continued success and growth is based on people feeling that they have the skills to be safe online.
“If people don’t feel safe then they won’t spend more time online - some of those people search and some of them click on ads. It’s a downstream benefit but it’s making sure that the environment in which our business operates is one where people are happy to engage with us.”
Google has also started putting links on Search and Gmail ads called ‘Why these ads?’, which explain to customers what information of theirs it has used to generate the ads for each individual. It has also recently launched the Good to Know campaign, where the online brand teamed up with the Citizens Advice Bureau to give consumers tips to improve their security online (see Viewpoint, above).
Given the importance of financial data to consumers, it is unsurprising that banks are seen as the most trusted type of companies, closely followed by credit card companies and medical companies.
Callcredit Group is tapping into this latent trust in the financial sector with an initiative that aims to give customers back the data it holds on them by providing a free online credit rating. When it launches next year, the Noddle service will not only allow customers to see their credit report but it will also use that data to suggest services, such as financial products and credit cards, suitable for their credit rating.
Callcredit Group managing director of consumer markets Tom Ilube explains: “We’ve found from research that if you say to consumers ‘here’s your data, have a look at it’ they really like that, but it’s even better if you can say ‘here’s your data and here’s how we put it to work to save you time, money or make things less complicated’. That same thinking is at the heart of the Midata initiative.”
Similarly energy firm EDF has recently worked to provide data back to its customers on their bill to help them understand their energy consumption. Bills include a consumption graph to help consumers track their energy use and compare it with previous quarters, along with a detailed breakdown and energy efficiency tips.
A spokesperson for EDF claims: “We believe that greater transparency is essential for restoring trust between suppliers and customers.”
But even though consumers have anxieties about how their details are used, it appears they are also savvy about how data marketing works.
Sixty five per cent of consumers claim they know companies track the websites they visit, 65% say they realise companies might share personal data with other companies that might be of interest to that person and 44% say that they know companies use computers to analyse the content of people’s emails and posts.
Brands tracking web activity to better target marketing does not bother consumers and this area is seen as ‘part of life’ in 2011. McCann suggests that people understand that advertising helps pay for free services on the internet and that this brings them benefits. They appreciate that targeted ads are more relevant than completely random ones.
To better help brands understand how to target differing attitudes toward security, McCann has created a segmentation based on different attitudes towards data privacy. The biggest group is the ‘Savvy Shoppers’, who make up 37% of the global population. Although this group does have concerns about privacy, if you can communicate the benefit of sharing data to these people, they are happy to share their data with brands. This is the group most likely to sign up to store cards.
The next group is ‘Sunny Sharers’, 20%, who are keen to share personal data largely by social media to secure better recommendations for them. ‘Walled Worriers’, or those that are deeply suspicious of brands accessing their data, make up 19% of the customer spread while ‘Eager Extroverts’ (15%) have little qualms about sharing copious amounts of personal information online.
The final segment is the ‘Cautious Communicators’, who although they are less concerned about data security, become very annoyed with brands that send them unsolicited offers. It is this group alongside the ‘Walled Worriers’ that brands need to up their dialogue with to better communicate the benefit of targeted marketing, the study reveals.
Ultimately, brands must find a way to reassure both nervous people who feel they are revealing too much and those open shoppers that want data-driven deals. Companies need to be transparent and show consumers the tangible benefits of sharing their information. If they succeed, privacy may no longer be such a controversial issue in 2012.
The Good to Know advertising campaign [on internet safety] is obviously a big departure for us. Sometimes we’ll advertise individual projects but we’ve never done a campaign about the internet more generally.
The first phase of the advertising campaign is coping tips, such as how to keep your account safe and how to make sure adult material doesn’t sneak into your children’s searches. The second explains what both we and other websites do with data and personalises information. It’s trying to explain the underlying technologies in a way that people can understand, using offline analogies and making sure that these things are accessible.
The concept came out of our user research - people want practical tips, they want coping strategies, so we decided to give that a try. There’s a thirst from consumers to feel more empowered to do these things online. The UK is the first place we’ve done it and we’re waiting to get the feedback from what average consumers thought and whether they found it useful.
If they do, we’d like to do more of this in the UK and then roll this campaign out to more places around the world, as this kind of print and online campaign reaches a much wider base of customers than you’ll ever get to visit our privacy page.
As a brand, we’ve started thinking more about large social questions like how you can raise the level of digital literacy. Schools and parents have a role to play but so do companies that engage with people online. We’re trying to take that responsibility seriously and come up with some creative ways to help people cope.