Cash is route round roadblock on information superhighway

If consumers refuse to share their personal details because of fears over data privacy, then brands must pay for the information.

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Consumers aren’t hiding any more. They’re waving. At least that’s the received wisdom of marketing’s information age. Tempted by branded utility and their inhibitions loosened by social media, our audience is only too happy to throw their personal information at us.

But is this picture entirely correct? A European Commission report into attitudes to information privacy, which was released last year, showed both generational and geographical variations in people’s willingness to share personal information with marketers and government bodies.

Young digital natives are happy to share, older digital newcomers less so. Brits are relatively content to volunteer information, while Germans, with a powerful folk memory of what data can do in the wrong hands, are more guarded.

It’s an interesting study but I’m more sceptical than usual about most of the research in this area because I can see three kinds of bias at work.

The first is methodological. Most of the surveys to date have been conducted online. Ask someone who’s filling in an internet survey whether they’re happy to share information online and you’re likely to get a predictable answer.

The second is cognitive. As Professor Alessandro Acquisiti of Carnegie Mellon University in Pittsburgh points out, when deciding whether to share data online, there is frequently a form of instant gratification bias at work.

In the heat of the moment, you want that walled garden content more than anything in the world. To access it, you’re prepared to give away more data, more readily than you would be prepared to admit to a researcher in the cold light of day.

The third, and perhaps most important form of bias, is vested interest on the part of the people paying for the research. Commercially, there’s a big upside in proving that people are happy to share their personal information. Conversely, there’s an equally significant political benefit in showing that people are actually quite worried about it.

Data privacy is a wonderfully rich territory for politicians. It combines concern for consumer protection with fears of a Big Brother state in one easily sound-biteable concept. And the polls have had plenty of straws to make hay with. In the last two years alone, we’ve seen Sony inadvertently leak gamer data, Google encounter problems with Street View and Apple grapple with undisclosed gathering of personal geolocational histories. Not to mention last week’s LinkedIn password scare.

In the midst of these multiple biases and vested interests, there’s one piece of research I’m more inclined to take more seriously than others. Partly because it comes from a group of respected academics with no apparent axe to grind, but also because the survey was conducted by phone rather than online.

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Imagine a scenario in which customers were rewarded not just for their loyalty, but for each item of data they provided to a brand

There’s a common presumption that young people are in the vanguard of a new, relaxed approach to data sharing. However, this study, a collaboration between Berkeley and the University of Pennsylvania, shows that despite their occasional propensity for drunken Facebook updates, young American adults are actually just as worried about data privacy than their elders.

Indeed, 82% of 18to 24-year-olds and 84% of 25to 34-year-olds claim to have refused to give information to a business because it was too personal or simply didn’t seem necessary. That’s lower than the 88% total for the whole population but not by much.

This observation is reflected in the number of consumers opting-out of data sharing and direct communications here in the UK. Marketers don’t like to disclose their customer opt-out rates, but an anonymous survey by Royal Mail suggests the figure approaches 60% for some brands.

One figure that is publicly available is the number opting out of sharing their Electoral Register data, which has grown from 26% in 2004 to 47% in 2011.

What can marketers do to adapt to consumers’ growing reluctance to share their personal information? Inspired by the thinking of Philip Sheldrake, author of The Business of Influence, I’d like to suggest two alternatives.

The first I’ll call Total Disclosure (partly because it sounds quite sexy, like an unmade Sharon Stone movie). To level out the information playing field between brands and customers, data collectors need to share all the individual-level information they hold with each customer – and invite them to correct, delete or add to the record.

Although user profiles already let customers do this, what is not so readily disclosed is the Big Data trail they leave as they cruise through the connected world. Telling customers about what is collected and used – and giving them control over it – would be a good place to start building trust.

Perhaps more radical is an idea we might call the Personal Data Mart. Imagine a scenario in which customers were rewarded not just for their loyalty but for each item of data they provided to a brand. The rewards could come in the form of relationship-based pricing. Or perhaps even real money.

In a world in which consumers increasingly know the economic value of their data, maybe brands need to start making that value real.

Richard Madden is chief strategy officer at Kitcatt Nohr Digitas

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