Consumers Suspicious of Sharing Personal Data with Companies

October 20, 2011

A whopping 88% of U.S. and Canadian consumers say they believe companies are primarily collecting personal information for their own benefit, nearly that many (85%) are often concerned about how much of their information is being held by others, and 74% don’t believe they benefit from sharing information according to an October 2011 survey from LoyaltyOne.

And even though 52% of survey respondents said they believe their information is being used to provide better service, only 9% strongly agree that this is the case.

This represents a very healthy skepticism on the part of consumers and shows that between the spread of internet safety messaging, and being burned by companies, has shifted the perception of average citizens towards sharing information. According to the survey, nearly one in three (32%) consumers has been notified their personal information was stolen or compromised.

Expectations for benefits are low

The survey also found that less than half believe that sharing their personal information will give them benefits like receiving tailored offers, advanced information, communications targeting their interests, easier purchasing processes, and preferred treatment or product improvements.

Companies beware

It would seem that consumers are tiring of the constant request for personal information by companies. Nearly a quarter of surveyed users (23%) say they have chosen against making a purchase due to uncertainty over how a company would use their personal information, and this percentage jumps to 30% of respondents who have received notification of a data breach and to 37% among respondents who have actually been negatively affected by a data compromise.

What consumers are doing to avoid information exposure

To limit the amount of information shared when general respondents do make a purchase, 41% say they pay with cash – this behavior jumps to 52% among those compromised by a data breach. 43% (jumps to 55%) say they refuse to provide a salesperson with their information, and 12% (jumps to 25%) say they have canceled memberships or opted out of loyalty programs.

Unfortunately, it doesn’t look like the survey asked about another common method for refusing to provide personal information – many people simply fake information in any field that’s not tied to billing or their address (hard to get the goods if you fake these). It would have been interesting to learn how many users go this route as I suspect the percentage is fairly high.

The data presented through this survey presents a very compelling argument for companies to provide real benefits in exchange for information, quit asking for information they don’t absolutely need, and to better protect information from data breaches. We’ll see if they take heed, but I’m not holding my breath.

Linda


Social Networks Ad Revenues up to $4 Per User – Kids Need to be Ad-Literate

February 26, 2011

We need internet companies to be successful and make money, so the news that Deloitte believes the average revenue per user (ARPU) of social networks will reach $4i this year is great news – if users are ready for the responsibility.

Deloitte’s findings also estimate social network membership will reach about 1 billion users worldwide this year, meaning total social network ARPU should equal around $4 billion.

Applying this projection to Facebook would mean that with their base of 500m active usersii , the company should be seeing $2 billion in ad and other revenues this year.  Internet companies also generate revenues through selling virtual goods, and some types of user information, and so on, but the vast revenue comes from selling advertisers access to consumers using the company’s sites, and nowhere is this truer than on social networking sites.

Social networking publishers were responsible for 34% of online display ads viewed in the US during December 2010, according to a new white paper from comScore.

ComScore’s data also shows that in 2010, US internet users received a total of 4.9 trillion display ads- up 23% from 2009.

Given their market share, it isn’t surprising that Facebook.com delivered the highest volume of display ads with more than 1 trillion ads in 2010, setting an all-time record for ads delivered.  (To put this in perspective, if there are half a billion active Facebook users, and ads were distributed equally, then each user would have been served 2,000 ads over the course of the year, or roughly 5 ½ ads per day.

Compare that to Yahoo Sites, which ranked second with 529.4 billion ads, followed by Microsoft Sites with 243.9 billion ads, Fox Interactive Media with200 billion ads, and AOL, Inc. rounding out the top 5 with 130 billion ads.

Given the sharp rise in advertising, are our kids prepared?

It’s no secret we’re surrounded by advertising on TV, radio and the internet, busses, playgrounds, buildings, clothing, and – if some legislators get their way – ads will even begin appearing on government buildings and online sites.

Unfortunately, we aren’t doing a great job of teaching our kids to be savvy enough to distinguish hype from truth, emotional marketing vs. product marketing, or a scam vs. a legitimate offer. Few youth are able to consistently answer the three basic questions of: Who’s behind the ad? What are the actual claims of the ad? And what is the ad asking of me?

Kids aren’t prepared to match wits with the battalion of psychologist being deployed, not to sell the product, but to build an emotional connection with the target audience.  In an age of constant connectivity and increasingly sophisticated means of advertising, the old concerns over subliminal ads where images of popcorn were hidden in movies have become downright quaint.

Several years ago, a PBS “Frontline” show called “The Persuaders,” examined how advertising significantly shifted approach in the lead up to the new millennium going from “what the product does and why this product is better” to “emotional branding” I need this product as part of my life/lifestyle.  Though it aired first in 2004, it remains shockingly relevant and is a great show to watch with your kids to start a discussion about how to evaluate the advertising messages you receive.

Last year, to address some of the issues around advertising, the Federal Trade Commission created an online interactive educational game called Admongo to teach kids critical thinking skills. In the game, kids gain points for identifying ads and understanding the motivation behind them. It’s a game that’s good to play together with your kids as I think parents will struggle to navigate the game, so kids can navigate and parents can talk about the concepts as the game progresses.

Keep the conversation going. Consider using everyday ads you come across as conversation launchers with your kids, the more you give them practice with a variety of ads – commercial, political, cause driven, and so on, the better skilled and savvier they’ll become.

Linda


i “Technology, Media & Telecommunications Predictions 2011″


Felt Spammed by Retailers in the Two Months before Christmas? You’re Right.

January 22, 2011

Major online retailers in the US sent 4.6 email promotions to each of their customers in just one week in the lead up to Christmas last year according to Chad White, research director at Responsys and author of the Retail Email Blog.  In the 8 weeks leading up to Christmas, these companies averaged just over 4 emails sent to each customer each week.

If you’re like me, you had half a dozen or more stores each spamming you with 32 emails over the two month period.

And, if you’re like me, it was a real irritant to have to clear so much junk out of your inbox.

I actually got to the point that I began ‘unsubscribing’ to every site that sent more than one email per week, as the only means of reducing the ‘noise’.

After the Holiday rush, I’ve complained to the retailers that hounded me and let them know it is rude to spam good customers. If the spam bothered you too, lend your voice and be heard. With any luck the message will sink in before the run up to the 2011holiday season and we’ll all have one more thing to be grateful for.

Linda


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