by Kevin Scott, Deputy Editor
With consumer perceptions of data tarnished by recent high-profile data breaches, the industry must come together to ensure the positive benefits of data are being communicated and illustrated effectively. This is the only way to create a healthy data culture in the UK. But how can marketeers deliver on this essential development?
Establishing how to educate consumers in the positive role that data can play in their lives remains a huge challenge for the industry, particularly with the negative connotations that have arisen relating to EU data protection legislation and recent high profile data breaches. Now, a new report from the DMA has highlighted trust and consumer control as key drivers for building a healthy data culture in the UK to benefit both consumers and business.
The ‘Data privacy: what the consumer really thinks 2015 report’ was independently produced by Future Foundation for The DMA, in partnership with Acxiom and what is clear from the outset is that building trust is the single biggest consideration for data and insight-driven marketers. Illustrating the positives of data is key to this.
The report, which was last published in 2012, reveals that as many as three quarters of people claim that recent news headlines regarding data breaches have heightened their awareness of the security of their personal information.
What the industry must do is ensure understanding grows at a comparable rate to awareness. This does seem to be working as there is a slow migration from Data Fundamentalists (who are unwilling to provide personal information) to Data Pragmatists (those who make decisions on a case by case basis) and those unconcerned at all about what happens to data about them.
One stand out statistic however, looks at perceptions over who benefits from personal data exchanges. Of those interviewed, 80% believe that businesses are the main benefactors, with just 14% saying consumers are best-served – this rises to 23% among 18-24 year-olds, illustrating that millennials are more in-tune with personalised marketing.
In total, 38.9% ranked trust in an organisation as the top consideration, almost four times the next most popular choice, which was free services and products (10.1%). Building that trust is paramount.
Jamie Turner, CTO, PCA Predict and Triggar believes that integrating solutions such as predictive verification on web forms and in applications indicates to the customer that you care about the quality of the data in your systems while insinuating that you will continue to maintain these standards.
“When businesses need to collect personal data such as contact details, validation tools at the point of data entry can go a long way to instil consumer trust,” he says.
Sarah Hooper, Planning & Communications Director at Amaze One believes transparency is key. “It is a very overused word, but transparency is what’s needed,” she says. As an example she highlights preference centres on websites. “Trust me as an individual consumer and give me the tools I need to navigate my preferences,” she says.
It may indeed be an overused word, but there’s a reason it comes up time and again. “Transparency is central to creating a positive data culture, in which consumers trust businesses to use and store their information ethically,” says Jane Frost, CEO, Market Research Society. “Trust is founded not just on compliance with regulation but on the whole ethical way companies handle personal data, wherever it is used in the supply chain.”
This is the crux of the challenge the industry faces. At a fundamental level, the perception of data must continue to change and that change must be accelerated by stakeholders. People must be treated as people, and the industry must recognise and respect consumer beliefs while working to highlight the benefits of data exchange. Chris Combemale, DMA Group CEO says: “Without trust, brands will not grow. They must look at the way they deal with consumers and their data, and take their privacy concerns seriously.”
Marketers must treat data with the utmost respect. “We’re told that the company we’re transacting with will only share our data with ‘trusted partners’ and this seems like a reasonable arrangement but in some instances these ‘trusted partners’ turn out to be any company willing to pay the right price to get hold of our data,” says Simon McLaven, Director at The Ark. “Most of us have become slightly anesthetised to the process and accept it as the inevitable cost of accessing more and more sources of products and services – but there are limits and you can’t ignore the fact that the company in initial receipt of your data has committed a breach of trust.”
McLaven adds that if offending companies get away with one or two mild indiscretions they might be encouraged to push the boundaries further. “We’ve come across several instances of marketeers mailing households of the newly bereaved because they didn’t take the trouble to check a particular name against a Deceased suppression file,” he says. “Worse still, we’ve spoken to a number of quite senior marketing people who wilfully mail the deceased in the expectation that they’ll make a sale from others within the household – i.e. the bereaved. This sort of practice is indefensible and hardly adds to consumer confidence and trust.”
Turner goes as far to say that there is a big confidence gap in organisations when it comes to trusting the accuracy of their own data. For example, in an organisation where bogus email addresses are allowed into the database from an online registration form, it becomes hard for members of the marketing team to trust that data. “People will not want to give up the gut-level decision-making processes they’ve used for years until they are convinced beyond a shadow of a doubt that their data works,” he says.
Turner adds that many businesses continue to rely on analytics and business intelligence to make key decisions without fully trusting their data. “With analytics, you are only going to be as good as the data that goes into it,” he says. “So if you are burdened with incomplete or inaccurate data, fix it first.”
Beyond the obvious drawbacks to an undelivered message, there is the threat of reputation damage when a high bounce rate is reported, which can sow seeds of mistrust for other data records too. Preventative measures and data cleansing are key here – as is maintaining a closer relationship with contact data right from the point of entry.
The importance of clean and accurate lists is not only beneficial for campaigns, but it also helps improve perceptions of the role of data. Value beats volume every time, though this message is not always believed. “The perception still exists that volume is value,” says Hooper. “You might have a list of 10,000 but your offer might be irrelevant for 70% of that list. It just leads to reduced response rates.”
Not only does that lead to money being wasted, but countless consumers have disengaged with a brand for sending out irrelevant offers. That doesn’t just effect the sender of the mail, but over time, it effects the entire industry.
Chris Combemale says that marketers must seize the opportunity to develop a data culture fit for the 21st century economy. “The shifts in attitude suggest consumers are more interested in creating a progressive culture of data exchange,” he says. “Brands need to capitalise on these positive trends and take the lead by nurturing the growing pragmatism and helping create a culture of data exchange that will benefit all.
Ian James, European Managing Director, Acxiom, says that everyone in the industry must come together. “Brands, agencies and industry bodies need to work together to ensure we demystify what we do and deliver transparency and value to the consumer,” he says, highlighting how companies such as The Guardian are leading the way by using infographics and videos to tell customers why their data is important and the value it will bring them.
However, improving overall perceptions can only succeed if a concerted effort is made by the entire industry. One example of good practice being recognised is the FairData trust mark. The Market Research Society helped form FairData back in 2013 in order to help consumers identify companies that could be trusted with personal data. A stringent audit is required of prospective members, which if passed is repeated on an annual basis. The decision to award or deny accreditation is taken by an independent board which reviews the candidate organisation’s practices against 10 key Fair Data principals.
“The accreditation represents an independently audited way that businesses can visibly commit to ethical data use, and in doing so reassure their customers that they take data privacy seriously,” says Frost.
At The Ark, McLaven believes that the answer lies with the DMA and other standard-bearers of data governance best practice, but only if some real rigour is applied. He believes that if the DMA adopted a similar practice to that deployed by Fair Data it would inevitably weed out those failing to uphold good data values and practices. “Those earning and receiving the accreditation would have a meaningful industry Quality badge that would resonate within the industry and with consumers,” he says. “This would help restore some much needed quality control measures and ultimately restore trust amongst consumers.”
He says that not all organisations treat individual’s personal data with the same care and respect. “And yet, outwardly, all members of the DMA are applying the same high quality standards of practice and each earning their right to membership. It shouldn’t just be open to anyone and everyone and take no account of their approach to good data practices. Membership should be seen not as a right but as a privilege which has to be earned. Inclusion should be by way of accreditation, not the payment of a membership fee.”
As the DMA’s Data Privacy study reports, a basic belief exists that consumers do not get sufficient return on the data they provide. Shifting this perception could monumentally change the entire insight-driven marketing industry. In its conclusion the report says: “Action is needed to provide consumers with an enhanced sense of control and autonomy, but more importantly, brands need to work to address the perceived asymmetry in who truly benefits from the current system of data exchange.”
Ensuring that consumers are in control of their data could be the most important element in the next stage of the ongoing evolution of marketing. That starts with understanding how consumers feel about data, with building trust while using data to create meaningful campaigns that visibly drive value.
Around 90% of respondents said they wanted more control of the data they choose to exchange with brands. Interestingly, consumers are also more likely to want overall responsibility for data security, ahead of regulators or industry doing so. “As more consumers strive to manage their own information flow, brands will be expected to offer more flexible privacy options, to provide customers with a greater sense of autonomy over how their data is collected and used,” says the report.
The view of data as an asset is still relatively new, argues McLaven, and he believes that responsibility for the performance of data naturally sits with the marketing departments. However, he also says that pressure to ‘sweat the data’ can sometimes lead marketeers to put sales above good data governance. “They’ll do ‘just enough’ to satisfy DPA regulations and not let good data practices get in the way of hitting forecasts,” he says.
This can clearly have a negative impact on the perception of data. As understanding grows, so too will demands for better control of that data. As consumers begin to accept that their data has an intrinsic value for brands, the relationship between brand and customer changes. Giving control of the data to the consumer is therefore widely acknowledged to be key to improving perceptions. This ‘value exchange’ can be easily understood. As Hooper says: “I know if I want a 20% discount code for a brand I like, I have to give over some details and those details will be used in future campaigns. People are becoming increasingly aware of the value of data exchange. It creates convenience for them.”
This has led to the emergence of a new type of consumer. The so-called ‘Consumer Capitalist’ sees their data as their own to trade. The DMA / Acxiom report has seen an increase from 40% to 52% in people who could be described thus, showing that consumers are more aware of the potential their data has to deliver benefits to them in the digital economy. These encouraging trends show there is an opportunity for businesses to cater to consumer preferences.
Two years ago, Acxiom launched www.aboutthedata.com in the US with a purpose of allowing consumers the ability to see the data held on them and to potentially opt-out of their data being used for marketing or to validate/amend the data. Ian James says of the outcome: “While it could be assumed that people would at best think neutrally of data holders, how consumers acted tells an interesting story.”
What happened is that while 2% of people did opt out (which doesn’t mean they don’t receive marketing, it just means it’s random and less relevant) a surprising 17% amended their data, seeing the value in receiving more relevant and targeted omnichannel marketing.
“While sensationalist press tend only to highlight to consumers cases of miss-targeting, it would seem that when consumers forced to think carefully about it, most understand the value data delivers,” says James.
One positive that came from the report is the proportion of consumers who now expect to exchange information when buying a product online. The rise from 65% in 2012 to 73% today indicates an increase in the acceptance of the very notion of data exchange. However a still considerable 27% of consumers do not expect to have to provide information.
Another major positive is that over half of consumers believe data sharing is ‘important to the future of the UK economy’. And if you want more data, it’s worth noting that 55% of consumers are comfortable with the idea of exchanging data in return for free products.
As Ian James points out, consumers should always have a choice, and transparency – along with simple clear opt-out options – will help them realise the value of that choice. “Used well, in today’s noisy and busy world, data really can help marketers deliver better customer experiences, products and services to customers.”
Key findings of the Data Privacy report
• Convincing evidence of a gradual, long-term shift towards wider awareness and acceptance of data exchange
• Consumers are more accepting of sharing their personal data
• Overall privacy concerns are reducing as awareness over how and why data is collected grows
• Trust continues to be the key element to building a healthy data culture in the UK
• Data is increasingly seen as a personal commodity, to be traded for the consumer’s personal advantage
• Consumers are seeking less abstract, more direct incentives
• Views towards data exchange are volatile and dependent on a variety of factors
• Control continues to be the key consumer ambition
• Brands have the opportunity to develop a culture of data exchange fit for the 21st century economy.