Understanding the Various Attitudes on Consumer Privacy and Security

Written By Steve Dodd, SVP Business Development, Effyis – dba BoardReader and Socialgist – Global Social Media Content Access
Edited By Yashna Malhotra, Medill IMC Class Of 2015

Published on 10/21/2015

One of the hugely fascinating trends emerging in the social media markets today is the topic of consumer privacy and security. No matter how you look at these issues or what side of the conversation you’re on, this topic offers tremendous future opportunities for marketers. This discussion will hopefully help you decide which “army” to join so you can capitalize on this exciting future. As professional marketers, you are in a unique position because your business discipline will literally direct us all to the final outcome.

I invite you to consider the following widely publicized, generalized statements and observations to help you better understand the various attitudes on this topic, and more importantly, how things are rapidly changing:

Personal Data Ownership
  • Privacy is dead – nothing you do online can escape surveillance for business or government use.
  • If something is “free/cheap/subsidized,” you are the product1 (meaning everything that a company can glean from your use of their services is theirs to do with it what they want). Are people aware of the data collected through games they access, websites they visit and how that is used? Not likely.
  • A major topic at South by Southwest (SXSW) this year was personal data ownership2 — ownership meaning a person’s right to determine who sees their personal data and what they can do with it. There seems to be a passionate cry to “fight back.” Those “in the know” are scared. Various organizations are disputing the ownership of customer data. As an example, Radio Shack (who just went bankrupt) has included the personal data of its customers as a corporate asset for sale. A post from PCWorld.com says it all:

    “As if RadioShack wasn’t obnoxious enough (as are many others) when you had to turn over a phone number just to buy a cable splitter. Now, the store’s trying to go back on its promise to keep that data to itself. It’s one more reason to treat these contact information requests with caution, since you can never be sure where the data will end up.”3

    In fact, further investigation has shown that based on Privacy Policies and User Agreements, 85 of the top 99 English websites say you “agree” that they might transfer your information.4 Do users ever really understand this or even read through the agreements they “sign” on sites or apps?

  • Data has been collected from all reaches of the Internet about you (and the rest of us) since the beginning. Every time you visit websites, cookies are placed on your computer (and other devices), continually collecting and updating your search behavior. Every email, Facebook post, Tweet, browser click and purchase is being recorded, tracked and interpreted. Every time you open a free app on your smartphone, you’ve possibly (likely) given up all data on your phone (next time you get a new phone, look at the permissions you accept). As the Internet of Things (IoT) evolves, everything from where you drive, how you drive, when you open your refrigerator door or change the temperature in your house, will be monitored and recorded. Your entire health care profile will be driven by access to devices you wear that will monitor and record everything about you.
    Why? To advertise to you, predict what you are likely to do next, understand your circle of influence, criminally attack you or protect you against criminal activity.
    Additionally, those companies who are storing personal information about you are under continuous risk of attack from hackers who can monetize this data with criminal intent. Think Target, Home Depot, Neiman Marcus, Apple, Anthem (to name a few). Wonder about the ones you’ve not heard about, or who’ve not figured out yet that their data is being stolen.
Legal Implications
  • Welcome to the cloud! Where’s your data, and more importantly, which laws actually govern its use?
  • Governments worldwide are becoming increasingly “interested” in Internet privacy and consumer protection. The “Safe Harbor” (from the USA Patriot Act) of EU consumer data being stored in the U.S. is under threat. Companies may be forced to store consumer data “in country” to comply with local privacy laws, and in fact the “Patriot Act” itself did get a facelift. It’s now known as the “Freedom Act” with enhanced consumer protection, totally driven by the emerging attitude of consumers as they better understand what’s really happening.
Ethical and Consumer Implications
  • Tim Cook (Apple CEO) said, “Most consumers likely do not know how dire the situation is (regarding consumer data sharing/government snooping), but will be ‘very offended’ when they find out.”5 And, as we’ve seen through the rapid evolution of the new “Freedom Act,” their “very offended” can quickly turn into “very disruptive,” fast.
  • Can anybody stay ahead of hackers trying to steal private consumer information and prevent breaches? A massive amount of consumer information has been stolen from companies and governments all over the world. There may be more data stolen than has even been identified (or even known about). In fact, data theft due to lack of security has been happening since the beginning of the World Wide Web.
  • Apple recently was attacked by false payments made from the theft of consumer information. Global financial institutions reacted by increasing transaction validation.
  • The IRS recently issued $5 billion in fraudulent refund claims where data from many of the previously discussed breaches was consolidated, giving enough personal information for criminals to pass the IRS authentication processes.6 Could the same strategy be used to compromise individual bank accounts or obtain a mortgage on someone’s house? Well, unfortunately it already has.
Implications for Marketers
  • Make the online purchasing process as easy as possible, push the overheads of privacy and security to a lower priority.
  • Hundreds of millions of Internet users are now using private social messaging services (SMS) versus more public social networking services. “Eyeballs” (marketing gold) are now in this private world leaving the big networks struggling (Facebook buys WhatsApp for $22 billion to “get their users back”). But, are these SMS’s really private or do they just appear to be? The real question is: why did users go there in the first place? Basically, to ensure privacy. They are now all becoming revenue generating platforms by capturing consumers and monetizing their information. But, as WhatsApp (ad free service for a buck a year) and Ello (network legally restricted from showing ads or selling data) have found, people will pay for their own privacy.7

This list of opposing positions is endless and the passion on both sides extreme. The question is: which path do you want to follow? There is no “right answer” here. All I’d like to suggest is that you learn how this fundamental Internet technology works so you can make sound choices. Some say privacy/security issues could be the pin that bursts the social media bubble or at least will force significant change to existing and accepted methodologies. Others feel that technology has become so “commonplace” and ingrained in our daily lives that people don’t care and have accepted this reality (moved on).

I’ll leave you with these thoughts. Social media is in its infancy. We are just at the beginning stages of the impact this will have on our future society. Please think past “today” because then you’ll truly be able to capitalize on this exciting and rapidly evolving future! Think about how privacy and security trends can be leveraged by your business to help you better compete and provide clear differentiation in this exciting future of gaining consumers’ trusted attention as the “privacy war” rages on.8

  1. Have “Ruth” – The opposite of “Ruthless.” If you keep your consumer in mind and protect them, this should positively impact their loyalty to your brand. Generally, be sensitive to their “exposure” and the impact that may have well past your specific business interests.
  2. Think Opt-In – Consider giving the consumer the choice to provide deeper personal data, outline how you will protect this and the benefits they’ll enjoy by doing so, and your relationship with them will dramatically improve.

Could the consumer’s attitude towards data protection become the next “currency” that consumers use to determine if they even want to do business with companies?

Just remember, without consumer engagement, the wheels fall off! [END]


Source:

  1. Gould, Jeff. “Courts Docs Show How Google Slices Users into ‘Millions of Buckets.’” Medium.com. Medium, 30 Apr. 2015.
  2. Schaefer, Mark. “Are You in a Social Media Experiment?” Businessesgrow.com. Schaefer Marketing Solutions, 17 Mar. 2015.
  3. Newman, Jared. “RadioShack Puts Customer Personal Data Up for Sale in Bankruptcy Auction.” PCWorld.com. PCWorld, 25 Mar. 2015.
  4. Merrill, Jeremy B. and Natasha Singer. “When a Company is Put Up for Sale, in Many Cases, Your Personal Data Is, Too.” NYTimes.com. The New York Times, 28 June 2015.
  5. Campbell, Mikey. “Apple’s Tim Cook Takes Hardline Stance Against Consumer Data Sharing, Government Snooping and Terrorism.” AppleInsider.com. Apple Insider, 27 Feb. 2015.
  6. Douglas, Jim. “Identity Thieves Steal $5 Billion from IRS.” WFAA.com. WFAA, 7 Apr. 2015.
  7. Smith, Jack, IV. “Ello Raises $5 Million More in Funding, Redesigns Entire Site Front to Back.” Observer.com. OBSERVER, 2 Apr. 2015.
  8. “FBI, Justice Department Ask for Greater Access to Encrypted Data.” CBSNews.com. CBS News, 8 July 2015.

 

steve dodd Steve Dodd is an enterprise software/services sales professional with a solid record of achievement. He currently holds the position of SVP business development at Effyis – dba BoardReader and Socialgist – Global Social Media Content Access, where he is responsible for new business sales, partner growth within existing base, and sourcing of new content providers. Steve is also the principal consultant at Muirfield Consulting where he helps emerging technology companies launch new products, enter new markets and arrange funding sources.
DSC_7465* Yashna Malhotra worked in marketing PR and social media before starting graduate school. She also worked in fundraising and resource mobilization for Save The Children India. Yashna also pursued a postgraduate degree in marketing management from the Welingkar Institute of Management in Bombay.

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