Consumer Attitudes Toward Data Exchange
We humans create a lot of data – on the order of about 2.5 quintillion bytes each day according to a recent report by Domo. While it’s a boon for data-driven marketers, it can be difficult to balance more personalized and relevant messaging with the growing consumer desire for privacy.
As marketers, we know that every post, like, visit, purchase, favorite, swipe, match, abandoned cart, cookie, download, share, comment, search and click collectively generate breadcrumbs of data that over time merge together to build a rather complete profile on who you are, your likes, dislikes and who you surround yourself with. But the average Internet user may not be aware that this is happening, or worse – they learn of it in the wake of a negative news story on the latest data breach or a targeting strategy gone awry.
Savvy consumers know that their data is valuable, and they are willing to share it – under certain conditions. Namely, when the data collector is transparent about its intended use and/or when there is the promise of a relevant value exchange (like special promotions and offers). Take, for example, the Japanese coffee house Shiru Cafe which offers free drinks to university students in exchange for personal data that is then shared with corporate sponsors. The café is cashless; the only way to order anything is by registering on the café website. Despite a reportedly thriving business overseas, the concept didn’t work in the US, where Shiru shuttered its operations after less than two years due to insufficient sponsor support.
But Shiru highlights an interesting new world in which companies and brands must consider a ‘mutual consent contract’ where each side has an equal and symbiotic urge to uphold their end of the transaction. The company would be enticed to safeguard the given data and the customer would receive a product, service or financial compensation in exchange (as opposed to settling for the current data harvesting practices in use today). The data collection needs to be thoughtful – 69% of respondents to a recent Accenture poll indicated they would not do business with a brand if their data usage was invasive – and its storage needs to be secure. As the need for personal digital governance continues to grow, a new market will emerge that allows individuals to more readily manager their data. And perhaps even get compensated for it.
"Rather than consumers having to set privacy preferences with individual content providers (i.e. Google, Facebook, etc.) who then control the data and access on a micro level, what if consumers each set their privacy preferences on a macro level and were individually compensated for their own data and resulting message exposure."
- Michael Solomon, The Media Audit
The concept of an all-in-one, blockchain driven “PII Marketplace” may still be years away, but there are companies today trying to help specific industries tackle this idea. Health Wizz is one such company trying to help consumers take back control and monetize the use of their medical data. Leveraging the Ethereum blockchain, Health Wizz allows people to aggregate and organize their medical data and convert it into a digital asset that can be shared privately and securely for rewards points.
For marketers, it’s imperative to consider the value exchange when designing data capture and use plans. Are you collecting information that will materially improve the consumer’s future experience with your brand? Are you working within the latest regulatory guidelines, such as the General Data Protection Regulation in Europe and/or the growing body of guidelines in the US like the California Consumer Privacy Act?
"Many consumers are willing to share their location data with marketers in exchange for some type of value”…“Others may want to reduce data sharing but don’t know how. Regardless, it’s likely that consumers will demand more control over their data in the future.”
– Yory Wurmser, Location Intelligence 2019 report
It is no longer satisfactory to capture various data points about your customers to store in the hopes of utilizing it later. Smart data strategy, activation and attribution must now be at the forefront of a marketer’s mind. As customers push to be rewarded for their personal data, marketers must have the agility to recognize what data points will provide maximum utilization and pivot to strategies that not only provides the greatest ROI for the brands, but also the customer. Interested in taking the next step towards designing a data capture and use plan for your brand? Contact us.