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3 Data Privacy Challenges and 3 Priorities to Consider to Promote a Positive UK Data Economy

  • Jed Mole

    Jed Mole

Created at April 4th, 2018

3 Data Privacy Challenges and 3 Priorities to Consider to Promote a Positive UK Data Economy

How do consumers consider data in 2018 – and what does that mean for the UK’s data economy?

Launched in February 2018, Acxiom and the DMA assessed the state of consumer data awareness and consideration with the third iteration of the ‘Data Privacy: What the Consumer Really Thinks’ report.

From looking at changing consumer attitudes to data privacy and exchange, challenges for the UK data landscape, as well as data rights and responsibilities ahead of GDPR, the report gives an indicator of the data trends and consumer attitudes current in 2018.

So what do consumer attitudes to data look like in 2018? Overall, the findings presented provide an optimistic outlook for the future data economy in the UK:

  • Just over half (51%) of people in the UK now believe the exchange of personal information is essential for the smooth running of modern societies.
  • The number of people who claim to be happy with the amount of information they share rose to 61% in 2017.
  • 69% of UK society continues to view the sharing of personal data as part of the modern economy.

However:

  • Only 41% of consumers are happy for government departments to share personal information in order to enhance the efficiency of public services.
  • Just 29% are happy for businesses to share information with other businesses to provide a more tailored service.
  • Equally, 78% of surveyed consumers believe that businesses benefit disproportionately from data exchange in the UK, while only 8% think that consumers benefit the most.

Clearly, while some positive advancements have been made regarding consumer attitudes towards data, if a majority of consumers currently believe that sharing personal data still benefits companies more than themselves, companies need to double their efforts around transparency and educating consumers around how data does drive a better experience, free services and personalised offers.

3 Challenges for the Current Data Economy

In order to facilitate a sustainable data economy in the UK, it will be crucial that the potential benefits derived from data exchanges are communicated clearly to consumers. However, there are still a number of challenges to solve if the current data economy is to be improved.

Challenge 1: Consumer willingness to pay for services to avoid data sharing

According to the report, a sizeable proportion of consumers indicate that they would prefer to pay for online services so that they do not have to share any personal data.The highest preference for paid services is expressed in TV and movie streaming platforms (35%), music streaming websites (27%) and online news sites (25%). This may be attributed to the fact that these categories already provide (optional) paid subscription models to their users and that consumer responses are, in effect, tied to the status quo.

Indeed, online services which are normally free (such as e-mail, messaging apps and social networks) receive relatively lower preference for paying over the sharing of personal information. However, given that a noticeable segment of respondents state that they would be willing to pay for these services rather than exchange personal information, suggests that the current value of exchange needs to be better communicated to consumers in the UK. Secondly, the extent to which they would be willing to pay requires investigation.

Challenge 2: Significant level of interest in ad blocking

The possibility of a breakdown in the concept of value that consumers perceive to receive from data exchanging, becomes more significant with the rising interest in ad blocking technology. In 2017, a third of respondents had already used ad blocking technology, while a further 41% were interested in doing so. Only 12% showed no interest in using ad blocking in the future.

Here it is important to consider how ad-blocking that stops content being heavily interrupted on a mobile device, is not necessarily the same as all other forms of data-driven advertising and marketing.

Challenge 3: Engaging the Consumer Capitalist

Despite the challenges outlined above, today we also see a UK consumer base that is primed to engage with data economy. Increasingly, consumers see their personal information as an asset that they can use to negotiate for better prices and offers – a sentiment that is prevalent across age groups.

The rise of the Consumer Capitalist, first introduced in 2012, continues to advance. Indeed, the number of respondents who view their personal data as an asset has increased to 56% in 2017 – up from 40% in 2012. Moreover, in 2017, 61% of 18-24 year-olds view their data in this light – suggesting younger generations clearly see their data as a valuable, exchangeable commodity.

Whilst it is encouraging to see consumers taking their own data seriously and while giving consumers more transparency around the data exchange and control will help, we also need to do more to understand what models could actually result in a direct monetary return for consumers when they share their data. The reality today, is their return is mainly in the form of free services (social, email, search etc.) and that many concepts to create paid-data exchanges have not been viable. It’s time to clarify this expectation gap with consumers.

3 Data Priorities To Address to Promote a Positive Data Economy

Given the existing perceived asymmetry outlined above, a number of consumer concerns and priorities need to be addressed in order to establish the foundations ahead of more advanced engagement from industry.

1. Control remains key

Whilst the number of people who state that they would like more control over the personal information they give companies has fallen slightly since 2012, the vast majority (86%) still hold this ambition.

  • The proportion of consumers who feel that they have a lack of control over preventing companies from collecting information about them has increased from 56% in 2015 to 65% in 2017.
  • Similarly, the number of respondents who feel they have a lack of control over the amount of data they share has grown from 41% in 2015 to 55% in 2017.

These findings underscore the importance of providing people with an increased sense of ownership and control over their personal information in order to develop a healthy data culture in the UK.

2. Building trust is paramount

The second precondition to building a healthy data ecosystem is establishing trust so that consumers feel more comfortable with sharing their personal information.

Trust in an organisation is by far the most important factor for consumers in data exchanges. When asked to rank ‘factors that make you happy to share your personal information with a company’, ‘I trust the organisation’ is consistently the top consideration (stated by 58% of consumers in 2015 and 54% in 2017).

Other factors, such as being able to get higher value goods for lower prices, as well as receiving free services and products in return for sharing personal data, appear to be secondary considerations but growing in importance since 2012.

3. Consumers seek transparency

The third foundational factor to promote a more positive data culture with consumers is to provide significant levels of transparency over how and why their data is being collected. The overwhelming majority of UK consumers – 87% in 2015 and 88% in 2017 – indicated that transparency about how their data is collected and used is important to them.

In addition, all factors relating to the enhanced need for transparency have seen growing interest from consumers since 2015. For example, 85% of consumers today place importance in having a policy that allows them to control the types of data they wish to share with a company.

Control, trust and transparency can be regarded as the core hygiene factors – essential requirements that must be met by companies before consumers are willing to share their personal data.

How is the UK Data Economy Maturing?

UK consumers are showing growing appreciation and receptiveness to a range of incentives that go far beyond direct financial reward.

  • Overall, growing numbers in the UK believe that they receive an improved service from companies in return for their personal data, rising from 33% of UK consumers in 2012 to 46% in 2017. (Though opinion varies across age ranges; just 29% of those aged 65+ feel they get an improved service in return for the personal data they give to companies).

We are also observing positive signs of a maturing data economy when we look at the incentives that would make consumers likely to share their personal information with organisations, for example:

  • 53% of consumers today say they would be likely to share personal information in exchange for direct financial reward.
  • 51% would be happy to share personal information in exchange for loyalty points.
  • 50% would be happy to share personal information in exchange for entirely free products or services.

The proportion of respondents that indicate they would engage in data exchanges with companies in return for rewards and offers has increased across all options available in the report. The fastest growth occurred amongst more indirect rewards such as personalisation, recommendations and access to exclusive events and content: in 2017 34% of people claim they would be more likely to exchange their personal information in return for personalised products or services.

Such findings point to a maturing data economy where consumers are becoming more sophisticated and knowledgeable about the range of offers and benefits available within the evolving data economy. For the industry, once the foundational factors outlined above are in place, there is clear evidence of a growing arsenal of incentives that can be used to entice consumers beyond simple monetary exchanges.