Data privacy looms large in the minds of consumers, as it relates to advertising and marketing. In fact, 74% claim to "highly value" their data privacy and will reward brands that responsibly manage their information. That's the headline statistic being shared in "The Person Behind the Data," a recent study from IPG's MAGNA Media Trials and data governance platform, Ketch.
UM Worldwide's Chief Privacy Officer, Arielle Garcia, believes the ad industry's contract with consumers began to unravel as the public's attention started to shift to the unfettered collection and sharing of their data. "It's not the first-party relationship with the property that they interacted with that is of the greatest concern," she explained. "It's the opacity around the sharing of that data with all of these third parties. And that's where we see people are demanding more control."
Her observations are backed up in the study's data. Nearly two-thirds of respondents (64%) said they felt they did not have full control of their data, and 57% agreed that not knowing where data is going or how it is used was a problem. Being able to highlight this breach in consumer understanding and substantiate real business returns for brands that do right by consumers' privacy were key drivers in Ketch's decision to conduct the study.
To unpack how consumers understand data privacy and reward or punish brands for their data practices, MAGNA and Ketch focused on four specific company actions: 1) the amount of data collected; 2) level of transparency in data collection/utilization to consumer; 3) retention period of consumer data; and 4) data sharing with other companies.
The MAGNA and Ketch teams tested these actions in 320 different consumer scenarios across four business sectors: retail, travel, wireless services and finance. The group was able to quantify how different data practices impact consumer trust, preference and purchase intent. Companies perceived as "responsible data stewards" can expect a 23% increase in purchase intent.
What drives that valuation? Principally, how long companies hold onto consumer data drives 52% of purchase intent, followed by the amount of data collected (23%); the level of transparency around data collection (18%), and data sharing practices (7%). Data storage is also a key factor impacting brand trust (40%), while brand preference is more highly affected by transparency (33%) and data sharing practices (31%). These results also varied depending on industry vertical.
Rich with insights from the study, Mediabrands continues to make privacy and responsible data practice a more frequent part of its client conversations as well as an important ingredient in how it develops audiences, strategy and activation.
Garcia sees plenty of room for creativity and innovative partnership opportunities for brands as they navigate new ways to open transparent dialogue with consumers around their data privacy.
Ketch's Head of Solutions and Marketing, Jonathan Joseph, said he was surprised at how important the data privacy issue has become for consumers relative to other shared values. Compared to the 74% who highly value data privacy, slightly more than half of respondents (55%) highly value the issue of sustainability, and 50% feel similarly passionate about diversity and inclusion. "Brands are investing in connecting with consumers around shared values of sustainability and diversity, and they should be doing the same with data privacy," Joseph observed.
Looking forward, both Joseph and Garcia see consumer fatigue on the horizon as more and more brands offer greater access and control over their data privacy options. "Designing streamlined experiences for consumers to control their privacy choices will ultimately become a big part of successful brand interactions," said Joseph. Given the billions of dollars invested in building brands, expect data privacy to loom large in brand communication for the foreseeable future.
The MAGNA/Ketch study, "The Person Behind the Data," surveyed a nationally representative sample of 2,751 people, in two (POV and Conjoint) online surveys and incorporated the feedback from five diversely populated focus groups. The full study can be found here.
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