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Summary:

Remember the 1990′s when companies rushed to brand their products as “enviro-friendly” to attract green-conscious consumers? A research firm suggests the same phenomenon could happen in response to how firms handle privacy and personal data.

Protest, green energy, crowd
photo: paintings

As data breaches become a fact of life in the age of cloud computing, new evidence suggests that consumers are seeking out companies that protect their privacy. According to Forrester Consulting, people will choose to give their business to firms with good data hygiene in the same way that, in the 1990′s, they looked for companies with strong environmental records.

Forrester will publish a survey this week in which 62% of people say they would be “not at all likely” to repeat a purchase from a company that shared their personal information with a data broker, and that 37% of them have bailed on an online transaction due to something they read in a company’s terms of service. The study, which was commissioned by analytics firm Neustar, also suggests a growing familiarity with ad-blocking and other privacy tools. Here’s a chart describing 1,069 adults’ browser settings:

Screenshot of browser privacy chart

Forrester concludes that a growing awareness about companies’ use of consumer data will lead them to expect simpler, more graphical privacy policies. The research firm also argues that “misuse and abuse of data will impact profitability” as a result of fines and lost consumer trust. In presenting the study, analyst Fatemeh Khatibloo told reporters that privacy is “the next green movement.” In a series of recommendations, Forrester argues that companies should respond by “stress-testing” their data operations, and turn privacy policies into a marketing opportunity.

So what to make of all this? I confess I’m skeptical. First, given that millions of Americans still use dial-up service to get their internet, can we be sure that most of the country can even define “browser” let alone “ad block plug-in?” And, more significantly, will consumers really ditch companies over what they do with data? After all, Facebook remains pretty popular — even as it cuts data deals to find out what you bought at the local drugstore.

Even if privacy does become the new green movement, that could bring its own downside. Recall, for instance, the spate of “green-washing” that occurred as companies tried to jump on the eco-bandwagon. In the case of data, this may be happening already — popular image site Pinterest touted its “Do Not Track” feature on the same day it announced a plan to massively expand its data collection habits.

In response to these concerns, Neustar’s Chief Privacy Officer, Becky Burr, told me that there really is a bona fide privacy movement afoot. She says it’s driven not just by consumers, but by companies that fret about their regulatory exposure in the US and, especially, in Europe. This is a fair argument. It’s possible that Google, Apple and others will raise their data protection game — if for no other reason than to avoid the fate of companies like Nike or Shell, which (rightly or wrongly) came to be singled out in the 1990′s for the overall sins of their industries.

The Forrester study, which was conducted in March, will be released on Wednesday. It was based on a survey on 1,053 adults “online” (a sample that likely compromises a higher degree of privacy-conscious consumers.)

(Image by paintings via Shutterstock.)

  1. The privacy problem is particularly acute in mobile, because you have your phone with you the whole time, and it knows where you are. The epicenter of concern will be services that collect and store GPS-enabled data about you, like Waze, Google Maps and Foursquare.

    It’s true that many people won’t understand the issues or care about them. But for those who do, privacy will be a showstopper.

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  2. Do the 62% understand that the data sharing they are talking about has been going on since the 1980s and its one of the reasons they get catalogs and offers from companies who they haven’t done business with prior to a purchase but then purchase from?

    The other thing is consumers are purchasing from these offers, and the question then becomes below what threshold – either # of purchasers or % of targeted population – is it inappropriate to share the data or send the offer?

    If people aren’t purchasing at a level that is profitable for all members in the ecosystem, somewhere along the way one of the members of the value chain will pull out and the process will need to be changed.

    Admittedly, new data sources like mobile Internet browsing and mobile location the real privacy issues David J notes in the prior post, but but I have yet to see harms from the sharing of demographic/purchase information with data brokers who use appropriate protections that outweigh the ongoing utility consumers receive from direct mail offers.

    Give such evidence I’ll gladly change my position based on my privacy background, but until it’s proven that the sky is falling my database marketing background demands skepticism.

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