August 28, 2019

Promise of Personalization Has Little Impact on Consumer Willingness to Share Data, Study Reveals

Dive Brief:
  • Consumers are less likely to share their data this year than they were in 2018, according to a new study by the Advertising Research Foundation (ARF) shared with Marketing Dive. The annual report is the second from the group examining shifts in consumer attitudes toward digital privacy.
  • The findings revealed that respondents' willingness to share their home address dropped 10 percentage points, while personal email address dropped 7 percentage points and first and last names were down 6%. Consumers surveyed did not change their mind much about sharing personal data, even if a brand offered to use that information to better personalize their advertising experience.
  • When it comes to privacy policies, those surveyed said they understand why marketers use data for targeted advertising. However, many claimed they didn't know technical industry terms associated with the tactic, such as "pixel tags." ARF's research also revealed that there is not a consensus around terms such as local storage, server logs, first-party data and third-party data.

Dive Insight:

ARF's latest findings could throw some water on marketers' confidence in the viability of transparently targeted advertising efforts. Many in the industry have assumed that consumers welcome the value exchange of data collection, where giving away personal information leads to more tailored campaigns, as long as that exchange is clearly communicated to the user upfront.

However, ARF's research suggests that consumers continue to be cagey about doling out their data, even when they know it will lead to more personalized experiences. Willingness to share something as general as email addresses has declined compared to the year prior, though growing skepticism shouldn't be surprising on the heels of several major corporate data breaches.

Last month, a hacker was able to access 100 million Capital One credit card applications and accounts, marking one of the largest data breaches in history, according to CNN. A 2017 Equifax data breach exposed the personal information of 147 million people, leading to a $425 million settlement. And Facebook was fined $5 billion in its massive debacle that illegally exposed the personal data of millions of people and used it for political marketing purposes in 2018.

Some states and regions are working to ramp up consumer privacy protections through legislation, including California, the EU and Nevada. GDPR took effect in Europe last year, and the California Consumer Protection Act, which has received criticism from the major ad trade bodies for being too general, will become law in 2020. Nevada also recently passed an amendment to its online privacy law making it mandatory for companies to let consumers opt out of the sale of their personal information.

The introduction of tighter regulations on data privacy could seriously impact marketers' personalization efforts, according to ARF Chief Research Officer Paul Donato.

"It is also worth exploring in more detail, why the American people do not see the value in sharing data to improve personalization of advertising messages," Donato said in a press statement. "In spite of that, more relevant advertising is one of the few reasons the public would consent to share their data."

Copyright 2019 Industry Dive. All rights reserved. From By Dianna Christe.

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