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New Expectations Emerge Around Data Privacy

In recent years, data privacy has become an increasingly significant issue for people and brands. In the wake of publicised privacy scandals and heavily discussed regulations such as the European Union’s GDPR and California’s CCPA and CPRA, consumers have grown more aware of the importance of protecting their data privacy. Some of the world’s most famous and beloved brands like Apple have even made privacy a key differentiator at the core of their strategy, bringing major attention to this topic.

 

 

According to an iProspect and Microsoft Advertising survey of more than 25,000 consumers in 16 countries, 87% of respondents now believe data privacy is a right, not a privilege, 64% are concerned about the amount of data being collected, and half have already stopped using a service or changed their purchase behaviour due to privacy concerns.

 

Brands cannot ignore these concerns. It is not only a matter of complying with regulations, but also a critical consideration to preserve their image and business over time. Today, an increasing share of marketers understand that data privacy should not be an afterthought of their strategy, with 68% believing they should make proactive compromises in how consumer data is used to build consumer trust (iProspect 2020 Global Client Survey). Although the traditional value for money equation is not obsolete, it needs to be revisited to factor data privacy as a new variable.

 

Finding the right balance in the value exchange between data and privacy is no easy feat.

 

According to our research, marketers generally tend to overestimate the value of the benefits they provide. Half (49%) believe they offer a fair exchange to consumers for the value of their data, while only 37% of consumers agree.

 

However, as illustrated in the below table, marketers tend to underestimate consumers’ motivations to share their data. Interestingly, only 9% of marketers believe helping a company improve products or services is an incentive for consumers, while 44% of consumers believe so.

 

 

These disconnections can create a perceived imbalance in the value exchange, which can result in distrust from consumers or missed opportunities for brands. For that reason, it is important for brands to develop a clear understanding of the specific factors influencing their audiences’ attitudes and behaviours around privacy, and to build upon these insights to adjust the value exchange they propose to consumers.

 

It is equally crucial to keep in mind the consumer perception of the value exchange is not shaped only during transactions. It is the sum of all the interactions people have with the company and is conditioned by the company’s credibility regarding privacy issues. With two thirds of consumers (67%) having little to no understanding about how their data is used by companies, brands that proactively reach out to customers about how they approach privacy can help alleviate concerns, explain the value they deliver in exchange for data, and seize the opportunity to differentiate from the competition. As only 22% of consumers declare they always read privacy policies, regularly educating your customers about your privacy practices in clear and concise language can demonstrate greater attention to consumer privacy needs compared to competitors reaching out sporadically and in legal jargon when they update their policies.

 

To explore further our global consumer research on privacy and value exchange, download the report In Brands We Trust: The Intersection of Privacy and Trust in the Age of The Empowered Consumer by iProspect and Microsoft Advertising.

 

Additionally, brands should not look away from the worst scenarios. No company is fully immune to data breaches, which is why now is a good time to review your response plan in order to be better positioned to conserve or regain your customers’ trust in case of a breach. Assembling a response team, training your employees about the key actions to take in face of a breach, documenting a plan of action and preparing templates to swiftly disseminate communications are best practices to be prepared to respond to a breach transparently and effectively, and doing so, mitigate the damage.

 

Building trust is a long-term endeavour and protecting data privacy is an integral part of it. As such, data privacy should underpin every action brands take today and tomorrow.

 

This article is excerpted from the report Future Focus 2021: Brands Accelerated.

Download it now for key insights on how brands can make the most of brand and performance to accelerate their growth.