Annalect Q2 2013 Online Consumer Privacy Study

Americans’ Concerns About the Privacy of Online Information Jump in the Wake of NSA Disclosures

Introduction
In 2013, Annalect launched a longitudinal study to track the pulse of consumer awareness, understanding, sentiment, and response to online privacy. Q1 results shed light into the need for consumer control and education to help consumers feel more secure about their online privacy, and the unexpected similarities in response across age groups. The finding is particularly noteworthy for advertisers, as trusting Internet users are twice as likely to accept targeted ads compared to concerned Internet users. In addition, the Q1 results identified implications on how marketers approach digital advertising. With 61% of consumers stating that they typically do not download content that requires personal information, it is becoming more important for marketers to focus on the value-exchange of their digital and mobile advertising as consumers are increasingly aware and savvy about managing their online privacy. The Q2 publication of Annalect’s Online Consumer Privacy Study was initially intended to extend on the first quarter’s findings; however, the early June news of the National Security Administration’s PRISM program (an attempt to track American’s online behavior) led this analysis down a more focused path. As such, this quarter’s report extends into July to capture an extended view into the impact of the story that unfolded throughout June. Three national online surveys were conducted from May - July 2013 with a combined sample of 2,100 adults, age 18+, who use the Internet at least once a month. Respondents were representative of the U.S. online population. Findings reveal the news of NSA’s practices have had a substantial effect on Internet users’ perception and behavior surrounding online privacy. Results show increases in Internet users’ concern about online privacy, however, that concern had mild influence on consumer behaviors. Future releases of Annalect’s Online Consumer Privacy Study will reveal whether news of NSA’s PRISM program has lasting effects.

Summary of Findings:
• The percent of Internet users who rate themselves as either “concerned” or “very concerned” about their online privacy increased by 20%, (June: 48%; July: 57%). This jump is largely from unconcerned Internet users becoming concerned—not from the normal vacillation found among neutral Internet users. Second quarter results saw jumps in the percent of Internet users who self-report taking action to manage their online privacy compared to Q1—these jumps persist into July. o The percent of Internet users who adjust their browser settings (22% in Q1, 36% in Q2, 38% in July) o Deleted and/or opted out of mobile tracking (14% in Q1, 23% in Q2, 21% in July) o Adjusted location-aware settings on a mobile device (13% in Q1, 21% in Q2, 19% in July) These findings coincide with actions taken by Internet users in July in direct response to the NSA PRISM program. o 37% of concerned Internet users have taken some form of action o Even 27% of non-concerned Internet users have taken some form of action Education and control remain important barriers to facilitating trust among Internet users. Among those users who rate themselves as concerned about their online privacy in Q2: o 48% feel they do not know enough about how their information is collected in used—this is consistent with Q1 results (51%). o 61% do not feel that they have control over how their personal information is used—this is also consistent with Q1 results (66%).

For more information, visit us at www.annalect.com.
© 2013 Annalect | An OmnicomMediaGroup Company

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Increased Consumer Concerns Over Online Privacy
The revelations of the NSA’s programs to collect “nearly everything a user does on the Internet” began on June 5, 2013, with the publication by the Guardian of the story based on leaked documents by a former CIA employee. Two weeks later, while the NSA story was still young and the government was still denying it, June data being collected for Annalect’s Online Consumer Privacy Study showed that consumers were twice as likely than not (48% vs. 23%) to be concerned about the privacy of their online information, which is consistent with May’s data (50% vs. 23%). Now, after seven weeks of daily disclosures about the formerly-secret programs and concessions by the government that many of the programs exist, the percentage of Internet users concerned about their online privacy has jumped in July by 19% to 57% (vs. 48% in June).
Percent of Internet Users Level of Concern Over Online Privacy Very Concerned Not Concerned 35% 30% % Respondents 25% 20% 15% 10% 5% 0% May Jun Jul Concerned Not At All Concerned

According to July results, Internet users are now increasingly more likely than not (57% vs. 16%) to be concerned about the privacy of their online information. More than half of “concerned” (53%) Internet users actually described themselves as “very concerned” about their online privacy. It is important to consider the source of fluctuation among concerned Internet users. Whereas fluctuations earlier in the year seem to reflect a natural vacillation among neutral users, the July increase appears to be a result of previously unconcerned Internet users becoming concerned.

When asked about their response to the NSA’s Base:total monthly respondents (n = 700) collection of their online information, nearly oneQ: How concerned are you about the privacy of your online information? third (31%) of Internet users said that they took actions to protect their online privacy such as editing social media profiles, blocking cookies, or using different search engines. The results are more revealing when contrasting by levels of concern, with 37% of concerned users and 27% of unconcerned users taking action. While it is expected that concerned Internet users would be more likely to take some form of action to protect their online privacy, it is noteworthy that over 1 in 4 Internet users who rate themselves as not concerned about online privacy still take some form of action to manage it. This finding suggests that there may be two groups of unconcerned Internet users—those that are not concerned about online privacy because they know how to manage it, and those that are not concerned because they are unaware of its relevance and implications. Future releases of Annalect’s Online Consumer Privacy Study will explore this dynamic.

For more information, visit us at www.annalect.com.
© 2013 Annalect | An OmnicomMediaGroup Company

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Actions Taken In Light Of The NSA PRISM Leak (July 2013) % Respondents 0%
Disabled Browser Cookies Edited Social Media Profile Researched Ways to Protect Privacy Use Different Search Engines Use Default Privacy Recognition Modes on Browsers Thought About Changing Services Thought About Changing Phone Companies or Communication Services Added Encryption Services to Devices and/or Email

5%

10%

15%

20%

Concerned Unconcerned

Base: “Concerned” respondents (n = 402); “Unconcerned” respondents (n = 115) Q: From the following list, please indicate what you have done in light of the NSA PRISM leak? Please select all that apply. (July 2013)

Education & Control Remain Key Issues
Second quarter results reinforce the need for increased consumer education around how information is collected and used. Of concerned Internet users, roughly 48% feel they do not know enough about this area, whereas three in five Internet users do not feel that they have control over how their information is collected and used. This lack of control may in part be tied to a lack of understanding, and additional steps to educate consumers about data practices may go a long way in making Internet users feel more in control around how their data is used.

What This Means For Advertisers
The increase in the percentage of Internet users who are concerned about their online privacy is significant for the advertising industry as well. Users that describe themselves as concerned about the privacy of their online information are nearly twice as likely as those who describe themselves as not concerned (31% vs. 18%) to take action in response to these concerns, such as opting out of targeted advertising and/or deleting or blocking cookies on their computers and mobile devices. In addition, as noted above, 27% unconcerned Internet users still take some form of action to protect their online privacy. If these trends continue, and Mozilla implements its plan for its Firefox browser to block most third party cookies by default later this year, the ad industry’s ability to effectively use third party cookies for marketing purposes will decrease. This, in turn, may necessitate the need for the industry to develop other means to quantify digital business practices.

For more information contact info@annalect.com.

For more information, visit us at www.annalect.com.
© 2013 Annalect | An OmnicomMediaGroup Company

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