Market Survey

Marketing Data and Consumer Privacy: What Your Customers REALLY Think
February 26, 2014

Overview
Big data is a big story in the marketing world: Marketers now have access to a wide range of consumer insights that they couldn’t access even five years ago. In just five years, the scope of consumer insights that marketers are able to access has evolved, by way of comparison, from a small pair of field binoculars, to the Hubble telescope. However, with this eye-in-the-sky, limitless availability of insights, there comes an unprecedented threat to consumer privacy – not least from the perspective of the consumer. And it comes as little surprise that people are guarded about sharing their data.

Contents
I’m a Marketer. Trust me. Consumers Aren’t Using Privacy Features TRUST: It’s the name of the game Conclusion • Methodology • Infographic • Demographics

Analytics Social Documentation eCommerce Language Campaigns Web

Market Survey – Marketing Data and Consumer Privacy: What Your Customers REALLY Think

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Executive summary
As marketers look to connect the dots between sales and offers, online and offline, they need to remember that big data is really about people – collective and individual behaviors, families, homes and lifestyles. This report is the latest in SDL’s series of original research to look at how a newly-empowered consumer is fundamentally changing industries and brands. The goal in our original research is to uncover this consumer’s behaviors and expectations as they relate specifically to individual industries, and more importantly, open up insights on how brands can optimize their customer experience to increase engagement, revenues and loyalty. We surveyed more than 4,000 consumers in the United States, United Kingdom and Australia. We uncovered their thoughts and insights about how marketers use data, how they protect consumer privacy, and how consumers perceive the use of their personal information.

It’s not just data; it’s personal; marketers need to exercise respect for privacy and use caution with consumers’ data if they ever hope to retain consumer trust.

In this report you’ll find insights including the following:
• • • • • Consumers are worried about marketers using their personal data. Marketers need to be transparent about how they use data. Smartphone and WiFi technology may help track behaviors, but consumers want to know the benefits of why they are being tracked. When consumers understand the value and see the incentive, they are willing to exchange data. Social media and big data still remain an enigma.

We believe you’ll find this report actionable and that you will be able to apply the perspectives we provide. As always, we welcome your feedback on what marketing trends we can uncover for you in the future.

Market Survey – Marketing Data and Consumer Privacy: What Your Customers REALLY Think

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I’m a Marketer. Trust me.
Brands have quite a challenge on their hands when it comes to gaining consumers’ trust regarding personal data. SDL’s new research shows that consumers worry about how marketers use their personal data. In fact, 62 percent of global survey respondents said they worry about personal information being used for marketing. In the United States, 65 percent of respondents worry compared with 59 percent in the United Kingdom and 64 percent in Australia. These results suggest a culture of resistance to sharing such data online. Reasons for consumers worry include the fear of the unknown – what is going to happen to all that personal data? Given the high profile media stories about identity theft, data breaches and privacy issues with large, trusted companies, as well as all of the reports regarding government agencies tracking data, consumers are more aware of data and privacy issues than ever before. This media coverage is potentially fueling a backlash against brands that want to provide relevant offers and promotions to their customers. Brands have the opportunity to be part of the conversation by being transparent in not only how the data is collected, but also how the data is used. Brands need to seize the opportunity to communicate with their customers proactively to reduce the risk of damaging trust in the brand. It’s also worth noting, as one might expect, that older consumers are more likely to worry about data and privacy issues than younger consumers. In the United States, 59 percent of consumers between ages 18 and 29 worry about data privacy compared with 71 percent of consumers between ages 45 and 60. Likewise, in the United Kingdom, only 48 percent of consumers between the ages of 18 and 24 worry, compared with 63 percent between the ages of 45 and 54. The numbers are closer in Australia with 60 percent of younger (18-24 years old) consumers worry about data and privacy, compared with 66 percent of older consumers (45-54 years old). Because consumers worry about how data is being used they are relying on consumer protection agencies to monitor how brands use their personal data. In the U.S. and the U.K., many consumer protection groups focus on regulating the terms of bank loans, credit card and other financial transactions, leaving consumer data relatively unprotected. In Australia, 80 percent of respondents expect consumer protection groups to monitor how brands use personal data. This might be a direct result of the Australian “National Privacy Principles” regulation that controls how businesses must handle personal data.

SDL’s research discovered that nearly threequarters of global respondents expect consumer protection groups to monitor data usage by brands.

Respondents are worried about personal info being used for marketing 62% 65% 59% 64%

Global

US

UK

AU

74% of respondents expect consumer protection groups to monitor how brands use personal data 74% 71% 73% 80%

Global

US

UK

AU

Market Survey – Marketing Data and Consumer Privacy: What Your Customers REALLY Think

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Of those that have a smartphone, 76% of global respondents aren’t comfortable with retailers tracking in-store movements thru smartphone and WiFi.

Consumers Aren’t Using Privacy Features
“Do Not Track” technology lets users opt out of tracking by websites, including analytics services, advertising networks, and social platforms. At present few of these third parties offer a reliable tracking opt-out, and tools for blocking them are neither user-friendly nor comprehensive. Much like the popular Do Not Call registry in the USA, Do Not Track provides users with a single, simple, persistent choice to opt-out of third-party web tracking. SDL research suggests that while consumers are worried about how their personal data is being used, they aren’t opting out of website tracking. In fact, nearly three-quarters of global respondents (72 percent) rarely or never use “Do Not Track” features. This could be a reflection of the low adoption rate of the technology overall. In addition, consumers may not realize this technology is even available to them. When examining the relationship between the consumer and tracking behaviors and purchases, some brands and retailers are looking to incorporate the use of mobile technology as well. A few well-known retailers have explored using smartphone and WiFi technology to monitor a consumer’s behavior in a physical store. Marketers are looking to learn more about merchandise layout in the store and other physical attributes that are a challenge to understand. While this use of technology is still in its infancy, marketers looking to deploy it must help consumers understand why it’s being used and how it can benefit them. SDL research also discovered that retailers and brands are not showing consumers the benefit of tracking behavior and purchases. More than half of all global respondents don’t prefer when stores keep track of purchases to help give promotions and discounts that match preferences. This suggests that marketers aren’t using this information in a manner that is helpful and relevant to the consumer. Marketers need to improve their approach and ensure that compelling, meaningful promotions are offered to the correct consumer segment.

Respondents rarely or never use “Do not Track” or “Incognito” features 72% 71% 72% 72%

Global

US

UK

AU

Of those consumers who have a smartphone, 76% of global respondents aren’t comfortable with retailers tracking instore movements through smartphone and WiFi - simply because they are not aware as to WHY they are being tracked 76% 82% 74% 76%

Global

US

UK

AU

Market Survey – Marketing Data and Consumer Privacy: What Your Customers REALLY Think In addition, SDL research discovered that consumers rarely read a website’s privacy policy before making a purchase. Nearly twothirds (65 percent) of global respondents either rarely or never read a website’s privacy policy before making a purchase. Given the length of privacy policies (and the legalese) that they are written in, many consumers have given up trying to make sense of the complex policies. Again, consumers trust the brand to respect privacy and protect data. Brands need to protect this trust and continue to communicate how data is collected, stored and used. However, in Australia, 44 percent always or often read it. Australia’s behavior may be an indication of the age of the ecommerce industry in the region. Given geographic isolation and high online shipping costs, many brands are just beginning to navigate the ecommerce process.

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Respondents don’t prefer when stores and brands keep track of purchases to help give promos that match preferences 55% 49% 49% 51%

Global

US

UK

AU

Respondents rarely or never read a website’s privacy policy before making a purchase While consumers are concerned about their personal data being used by marketers, they aren’t as concerned about protecting their credit card information when shopping online. Nearly 60 percent of global respondents don’t use a specific card or bank account that is only for online purchases. 65% 63% 70% 56%

Global

US

UK

AU

Respondents don’t use a specific card or bank account that is only for online purchases This shows that consumers trust brands to offer secure checkout process and to safely use their credit card information. In Australia, 53 percent of respondents do use a specific card. It’s suggested that the rate is higher in Australia because the digital economy is younger there than it is in the United States and United Kingdom. 58% 59% 63% 47%

Global

US

UK

AU

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While consumers are choosing which brands and companies to do business with, 57 percent of global respondents said they don’t choose to do business with brands and companies that use personal information to make their experience better.

TRUST: It’s the name of the game
SDL research revealed that consumers reward trusted brands with personal data. Nearly 80 percent of global respondents are more likely to provide personal information to a trusted brand – a brand they have purchased from before. As an example of a trusted advisor, retailer Amazon.com has earned consumer trust by fostering relationships with consumers by helping them make decisions through recommendations of items based on past purchases, user reviews and ratings and suggested complementary purchases. Amazon consumers also have several choices for building a personal bond with the company, including creating user profiles, writing reviews and adding products to wish lists. Brands that use digital marketing activities must understand consumer views on data privacy, including what they consider private and what personal information consumers are willing to exchange with a brand. Consumers own the power in the relationship. They have the ability to choose what information they share so brands must offer compelling reasons to share this data. This is another wake-up call for marketers. Consumers aren’t seeing compelling reasons to share their information; they expect to receive a positive customer experience regardless of whether a brand has their personal information. Consumers’ expectations are high and brands need to leverage whatever information they have about the consumer to show them a superior experience that builds trust and loyalty. This is not to say that consumers don’t want to share ANY information with brands and retailers. In fact, consumers find value in sharing personalized information in exchange for information that is relevant and useful to their daily lives. Consumers are willing to participate in a transparent exchange of their personal data with brands. Of the items that consumers are willing to share, gender, age and income top the list. However, name of spouse, lists of family and friends and Social Security numbers are items that consumers won’t share with brands. The trick is to learn what data your customers are willing to share and then act accordingly.

Respondents are more likely to provide personal information to a trusted brand 79% 80% 75% 87%

Global

US

UK

AU

Respondents don’t choose to do business with brands/companies that use personal info to make experience better 57% 58% 60% 52%

Global

US

UK

AU

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It’s worth noting that in the United Kingdom, nearly one-third of respondents said that they wouldn’t share any of the information with brands. Of the information that U.S. respondents would share with brands/ stores to receive personalized offers US Gender Hobbies Marital Status 62% 52% 43% Of the information that U.K. respondents would share with brands/ stores to receive personalized offers UK Marital Status Date of Birth Gender 43% 38% Of the information that Australian respondents would share with brands/ stores to receive personalized offers AU Gender 64% 52% 52%

Date of Birth 37% Marital Status

Respondents would give up personal info to a brand for loyalty programs In establishing that trust, brands must help consumers understand what they are receiving in exchange for their personal information. Nearly half of global respondents would give up personal information for a loyalty program. When marketers are clear about how the information is being used, which helps build trust. Likewise, consumers can choose how to participate when they know all of the facts. Global US UK AU 49% 50% 45% 54%

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Respondents would give up personal information for free products and services 41% 44% 35% 50%

And brands need to offer more than just free products and services. Many consumers feel like there is no such thing as free – they assume there must be a catch. SDL research saw that only 41 percent of global respondents would give up personal information for free products and services. Marketers should understand that sweepstakes, give-aways and free promotions aren’t great for consumers who aren’t motivated by free things. Marketers can be more effective and save marketing budgets by focusing on building that trust. In return, consumers will be more attached and loyal to a brand. In addition to sharing information directly with a brand, consumers now share personal information on social networks and through word of mouth. Marketers are looking to leverage this online landscape to effectively reach their customers. However, marketers should realize that consumers aren’t necessarily sharing more information through social media that they are through traditional marketing programs. Of those who use social media, 55 percent of global respondents don’t share more information about themselves on social media than share with brands or stores. Brands aren’t making inroads in social media. Consumers aren’t accepting brands as part of their personal network. Once again, brands need to offer a compelling reason to share personal information.

Global

US

UK

AU

Of those who use social media, respondents don’t share more information about themselves on social media than share with brands or stores 55% 55% 55% 57%

Global

US

UK

AU

Market Survey – Marketing Data and Consumer Privacy: What Your Customers REALLY Think

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Conclusion
As marketers, you understand the importance of using customer insights to offer more relevant promotions and discounts to your customers. But now, you also understand that customers want to protect their data. This SDL research illuminates that unless brands are trusted and provide consumers with the way to control how their data is used, they will not have a valuable role in the digital ecosystem.

As you use customer data for your marketing needs, consider the following:
• • • • Is your brand communicating clearly to customers what they will receive in exchange for their data? Are you using the data to make the experience better for your customers? Do you have the right offers and discounts for your audience? Are you offering a compelling reason for customer to share data with you?

By using customer data judiciously and protecting the privacy of your customers, your brand will create loyalty.

Methodology
SDL conducted an online survey that looked at the Data and privacy preferences of consumers in the United States, United Kingdom and Australia. Third party survey companies conducted the survey on behalf of SDL. The survey respondents were not aware the survey was conducted by SDL.

Market Survey – Marketing Data and Consumer Privacy: What Your Customers REALLY Think

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I’m a marketer…trust me Who really should protect your personal data?
Respondents are worried about personal info being used for marketing

Global – 62% US – 65% UK – 59% AU – 64%

74%

of respondents expect consumer protection groups to monitor how brands use personal data

Global – 74% US – 71% UK – 73% AU – 80% Global – 76% US – 82% UK – 74% AU – 76%

Are Retailers Tracking Your Every Move? Are Consumers using Do Not Track Features?
Respondents rarely or never use “Do not Track” or “Incognito” features

Global – 72% US – 71% UK – 72% AU – 72%

76%

Of those consumers who have a smartphone, 76% of global respondents aren’t comfortable with retailers tracking in-store movements thru smartphone and WiFi

Do Promos Match Preference? Do Website Privacy Policies Really Work?
Respondents rarely or never read a website’s privacy policy before making a purchase.

Respondents don’t prefer when stores and brands keep track of purchases to help give promos that match preferences.

Global – 55% US – 49% UK – 59% AU – 51%

Global – 65% US – 63% UK – 70% AU – 56%

Consumers and Brand Trust
Respondents are more likely to provide personal information to a trusted brand

Consumers Prefer to Take it Personally
Global – 79% US – 80% UK – 75% AU – 87%
Respondents don’t choose to do business with brands/companies that use personal info to make experience better

Global – 57% US – 58% UK – 60% AU – 52%

What Consumers will Give to Get
Respondents would give up personal information for free products and services

How Does Social Media Play a Role in Data Privacy

Global – 41% US – 44% UK – 35% AU – 50%

Global – 55% US – 55% UK – 55% AU – 57%

Of those who use social media, respondents don’t share more information about themselves on social media than share with brands or stores

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Demographics
US Demographic Age Range 47% 53% 21% 26% 29% 23%

Male 55.9%

Female 44.1%

18-29

30-44

45-60

60+

UK Demographic

Male 46.9%

Female 53.1%

Age Range

14.45% 24.20% 21.25% 19.85% 20.25%

18-24

25-34

35-44

45-54

55+

AU Demographic

Male

Female

Age Range

11.60% 20.50% 22.40% 23.20% 22.30%

18-24

25-34

35-44

45-54

55+

Market Survey – Marketing Data and Consumer Privacy: What Your Customers REALLY Think

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SDL Customer Experience Cloud
Optimize the future of your customer experience with a complete, integrated and easy to deploy technology solution
SDL Customer Experience Cloud (SDL CXC) is an integrated technology platform that enables companies to deliver seamless, data-driven experiences to customers at every point of the buying journey – across all channels, devices and languages. 72 of the top 100 global brands use SDL technology to provide superior customer experiences. SDL Customer Experience Cloud is made up of seven best of breed solutions that focus on every aspect of your customer experience: • Analytics • Social • eCommerce • Campaigns • Web • Documentation • Language. To learn more about SDL Customer Experience Cloud, please visit www.sdl.com/cxc or contact us at: sales@sdl.com

SDL (LSE: SDL) allows companies to optimize their customers’ experience across the entire buyer journey. Through its web content management, analytics, social intelligence, campaign management and translation services, SDL helps organizations leverage data-driven insights to understand what their customers want, orchestrate relevant content and communications, and deliver engaging and contextual experiences across languages, cultures, channels and devices.

For more information, visit www.sdl.com
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