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Data Security and Privacy Concerns Impacting What People Buy, Where They Do Business
New Edelman survey reveals mounting ramifications for business and serious consequences when trust is breached

March 7, 2012, NEW YORK – In the wake of several high profile data breaches and privacy incidents, a new Edelman study, “Privacy & Security: The New Drivers of Brand, Reputation and Action Global Insights 2012,” reveals that concerns about data security and privacy are impacting what people buy and which companies they do business with. Data security and privacy are also pressing matters of public policy, with leaders from around the world demanding enhanced protections. From the Obama Administration’s call for a Privacy Bill of Rights to the European Commission’s proposal of new comprehensive rules for the protection of personal data and the Asia Pacific Economic Cooperative’s development of a new privacy framework, businesses now face more scrutiny on these issues than ever before.

Concerns about data security and privacy are not merely theoretical. Around the world, people feel that their personal information is not adequately protected and that companies are unchecked, so it’s no surprise that they are now taking data security and privacy considerations into account when they shop. The study reveals that 70% of people are more concerned about privacy than they were five years ago and 68% feel they have lost control over how their information is shared and used by businesses. These concerns are impacting their decisions at the checkout counter. Individuals are even weighing considerations about security and privacy as heavily as those relating to a product’s design, style, and physical dimensions.

For instance, when shopping for smartphones, nearly one in two people (48%) report that data security is one of the top three factors in their purchasing decision, a consideration that proved important for more people than the style, design, warranty, and size of the product. Data security and privacy considerations are also impacting other purchasing decisions. One in two people buying a personal computer and 42% of those shopping for tablet computers say that data security is among their top three considerations – for the former, outweighing the physical dimensions, style, and design of the device and for the latter, factoring in almost equally. “The message of this study is clear,” said Pete Pedersen, chairman of Edelman’s global Technology practice. “Business leaders must begin to think about managing data security and privacy as a core competency – one that has real potential to affect a company’s bottom line.” The fallout for businesses is not limited to those in the technology sector. Edelman’s industry study also indicates that people around the world are hesitant to do business with any company they perceive is incapable of protecting their data. Nearly half (46%) of those surveyed report leaving or avoiding companies that have suffered a security breach. In the wake of a data breach, individuals are even willing to abandon the companies they trust most. Globally, Americans are the most reluctant consumers to part ways with businesses to which they are loyal, yet one in two say they are likely to change brands after a data breach. The potential for customers to jump ship increases for companies that lack brand loyalty, with 70% saying they would switch providers after such an event. Data security and privacy concerns are also impacting peoples’ trust in business. Shopping and banking are the most popular online activities, and while data security in these industries is important to many consumers, far fewer say they actually trust banks and online retailers to protect their personal information. So, while 92% of people globally consider data security and privacy important in the financial industry, just 69% trust financial institutions to adequately protect their personal information: a 23 point gap. Online retailers fared even worse. While 84% indicate the security of their personal information is important to them

when shopping online, just 33% say they trust online retailers to protect it: a whopping 51 point gap. “This study is further evidence that security and privacy are now business imperatives that must be actively managed by companies and organizations,” said J. Trevor Hughes, the president and CEO of the International Association of Privacy Professionals. “It shows that security and privacy are key drivers in customer loyalty and trust, that if ignored pose a significant risk.” About the Edelman Data Security and Privacy Study The 2012 Edelman Data Security and Privacy Global Study was produced by research firm StrategyOne and consisted of a 15-minute online survey conducted in the United States from January 31 – February 5, 2012, and non-U.S. markets from February 7 – 15, 2012. The survey sampled 4,050 informed publics aged 18 and older in seven countries. About Edelman Edelman is the world’s largest public relations firm, with 63 offices and more than 4,200 employees worldwide, as well as affiliates in more than 30 cities. Edelman was named Advertising Age’s top-ranked PR firm of the decade in 2009 and one of its “A-List Agencies” in both 2010 and 2011; Adweek’s “2011 PR Agency of the Year;” PRWeek’s “2011 Large PR Agency of the Year;” and The Holmes Report’s “2011 Global Agency of the Year.” Edelman was named one of the “Best Places to Work” by Advertising Age in 2010 and among Glassdoor’s top five “2011 Best Places to Work.” Edelman owns specialty firms Blue (advertising), StrategyOne (research), Ruth (brands + experiences), DJE Science (medical education/publishing and science communications), MATTER (sports, sponsorship, and entertainment), and Edelman Consulting. Visit for more information.

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