Online data privacy has been a hot topic since the introduction of the EU ePrivacy Directive in May 2012, but no-one could have predicted the impact the new rules would have on consumer opinion.
The latest findings from a survey conducted by Toluna, in conjunction with digital marketing intelligence company Ghostery, have revealed that almost two years on from the implementation of the Directive – consumers have a much stronger opinion (positive or negative) than ever before, demonstrating a far greater awareness of online privacy.
60% of UK consumers more worried about privacy
Concerns around the area of online privacy have become more widespread over the past 18 months, with almost three in five (60%) UK consumers reporting they are more worried about their online privacy than they used to be, a significant increase from 45% in 2012.
The latest study was undertaken with the aim of exploring whether consumers’ attitudes have changed and compared current attitudes to a similar study undertaken in April 2012 shortly before the ePrivacy Directive came into effect.
Honesty is the best policy for customer retention
Transparency in online tracking and data collection has a substantial impact on consumer opinion, with a large majority (84%) of UK consumers now having a more favourable opinion of companies who are honest about online data collection.
This is a considerable increase from the 54% who agreed with this assertion before the Directive came into effect, and indicates that brands can no longer afford to keep their data collection activities under wraps if they wish to attract and retain customers.
The favourable opinion gained from data transparency also leads to an increase in commercial opportunities, with 75% of UK consumers more likely to purchase goods or services from a brand that is open and honest about data collection. Again this proportion has increased significantly from 2012 when fewer than half of consumers (48%) felt this way.
Interestingly, in the US, where brands are governed by different privacy legislation, these trends are even more marked. In fact, 86% of consumers state they have a more favourable opinion of brands that are open about data collection, and 78% state that this honesty would make them more likely to buy from those brands.
Manners cost nothing
It’s easy to get caught up in a fast-paced world of red tape, rules and regulations, and forget to extend customers the courtesy of asking whether they mind their data being collected, or what happens to it afterwards.
Consumer attitudes to online data collection are distinctly improved if they have been asked beforehand whether their data can be stored and used. More than three quarters of UK consumers (77%) agree they would have a more positive opinion of a company that asked permission to collect or use personal information about their online activities.
Also of interest is the fact that many consumers admit they recognise the benefits of data collection.
60% happy with targeted communications
In the UK, three in five (60%) state they are happy for companies to use data they have collected to show them relevant offers, discounts and loyalty bonuses, provided companies are transparent and give individuals control over their data.
Over half more satisfied by advertising relevancy
Just over half of consumers believe that they will be more satisfied if they receive a good service (53%), or if brands use personal data to show them relevant advertising (52%).
Customers who receive relevant promotions feel as though their data is in safe hands because it means the brand has carefully reviewed their data first before deciding upon the type of content they send out, according to just over half of UK consumers (54%).
Despite the general noise around online privacy over the past few years, it is surprising how few consumers are actually aware of the specifics of the ePrivacy Directive, which requires companies – by law – to give notice of their website cookie practices when a person visits the website and to obtain the visitor’s consent (in the UK consent can be implied). Consumers are more likely to be aware of the general furore around ePrivacy than the specifics of the Directive itself. Fewer than two in five UK consumers (40%) claim to have a good understanding of current online privacy rules, while 29% admit to a lack of understanding. In the previous study undertaken in 2012, a slightly higher proportion of consumers (43%) were aware that the new rules were about to come into force, but by 2013, the proportion of consumers aware that the Directive had been introduced the previous year fell to 39%, illustrating a decrease in specific awareness of the changes.
These findings strongly suggest it is the perception that a brand or company is being honest about their data collection – as much as proven transparency – that is likely to win consumer favour with many consumers basing their evaluation of a brand’s data collection on their interactions with the company.
Although the majority of consumers have a favourable opinion of brands that are seen to be honest about online data collection, few can actually give a specific example of such a brand. In the survey the largest proportion of mentions for a single website or brand was Amazon, which was quoted by 16% of UK consumers as being a positive example of sensitive data collection and usage. This was also the brand most commonly cited in the US (15%).
While the intention of the ePrivacy Directive was to give consumers more control over the storage and use of online data, the degree and speed of its impact on consumer opinion has been unexpected. At a time when many brands are pursuing customer-centric business models and prioritising the lifetime value of its customers, being open and honest about online data collection has become a necessity. Asking consumers for permission to collect data about them, allowing them to opt out of non-essential data tracking, and being open about the way in which data is used, are vital to win consumer trust, increase loyalty. Those that do will ultimately gain the upper hand.
This survey was conducted in November 2013 among 1,000 adults (18+) selected from among those who have agreed to participate in Toluna surveys. Figures for age, gender, education, income, employment, and region were weighted to bring them into line with their actual proportions in the online population. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. The same study was also conducted in the US.