DDMA Study: What consumers think about data
The DDMA published a research contributes to the social debate on privacy. They investigate which internal and external factors influence this concept, pointing out the implications for organizations’ data propositions and for public education and policy in the field of privacy and data collection. For organizations the most important take-away is, that consumers accept data exchange as part of the modern economy, but do not feel they benefit most from this. 75% of consumers are willing to share data, but 89% of them state that business currently benefits most. This renders a data economy far from sustainable. The Dutch version is available on the DDMA website, and the English on the FEDMA website. Below are some of the main conclusions.
The DDMA report divided consumers in the Netherlands, distinguishing between three basic attitudes towards data sharing:
- 34% are Pragmatist
- 28% are Fundamentalist
- 38% are Unconcerned
Consumers under 35 are more often Pragmatist or Unconcerned, while consumers over 35 are more often Fundamentalists. The digital native of between 25 and 34 is less concerned about his privacy and has a greater sense of control in issues like information gathering and the right to be forgotten, or the choice of certain benefits in exchange for data. Therefore, the report shows that the societal privacy debate is not black-and-white. People are not for or against privacy.
Consumers differ in their concerns about privacy and in their willingness to share data, but generally they find privacy important. However, they don’t always act on it. Trust in technology or its use is relatively low, but people use it extensively. The (user) comfort or the service is decisive in this. It needs to be noted that Fundamentalists use online services relatively less to post/share something (30% never), compared to Pragmatists (20% never) and the Unconcerned (19% never). Moreover, interviewed consumers are sensitive to direct incentives, respondents indicate to (very) likely provide data for: a direct financial reward (41%), free products or services (32%), and discounts on products and services (29%). Only the fundamentalists and people between 55-64 are much less inclined to exchange their data for direct financial rewards.
The Dutch are attached to their privacy (in particular comparing their behavior with the UK consumers). Their concerns about privacy and their sense of an unequal exchange do not (yet) translate into consumer behavior in data sharing. Consumers only trust social media a little bit, but they use them en mass. Here we see a parallel with the debate on climate change. The concerns are real, but everyday behavior is not altered. This is no basis for a sustainable data economy. What stands out is that consumers, in the situations where they do share data but don’t trust the organizations, often don’t have many alternatives available to them. Government and watchdogs should focus on instruments that stimulate competition and level the playing field.
The society intuitively feels that the digital economy leads to fundamental change. At the same time companies are insufficiently able to estimate how these changes will impact economic and social decisions over time. Governments should take this into account when making policies. This should stimulate choice and transparency in data processing. Organizations need to get working on differentiated models for data sharing. They are wise to regularly view their (potential) target groups through privacy glasses. Are they Fundamentalists towards sharing data or Pragmatists? To serve the various groups it is highly recommended to use differentiated privacy settings, where people can easily arrange which data they want to share (perhaps in exchange for certain benefits). Organizations can also review their revenue models. For Fundamentalists it is better to introduce a paid option of a “free” news medium that does not show targeted advertising. For Pragmatists and Unconcerned this is not the case.
For organizations the most important take-away is that consumers accept data exchange as part of the modern economy, but do not feel that they benefit most from this. 89% of consumers say that industry benefits most from the data economy. This is problematic. Organizations need to sharpen their data propositions. The added value of data exchange is insufficiently clear to consumers. Most consumers in this research indicate they expect and understand that organizations collect data to improve service delivery. Organizations need to clarify how they do this. If organizations can’t do so, they may consider other incentives, like discounts. 82% of consumers in this research want more control over data collection.
Other research points towards a lack of information and control over data collection as reasons for sub-optimal decisions by consumers in data exchange. New rules and regulations do not seem opportune, as consumers are not aware of their rights and options under the current Dutch privacy laws. Companies need to take action and give consumers a greater sense of control and autonomy. The DDMA study sees also companies anticipating this by developing dashboards and ‘my spaces’.
