News & Views

Privacy in Perspective (and Numbers)

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Only a few years ago, conventional wisdom held privacy to be an outdated concept that had no place in a digital world. However, as has become very clear in recent months, privacy has made a comeback, albeit in somewhat altered form, and it is now more important than ever.

In order to investigate what the changing definition of privacy means for marketers, Contagious teamed up with global insight and brand consultancy Flamingo to conduct qualitative research across the US and the UK.

Contagious also worked with research partner James Kennedy to conduct quantitative research of a nationally-representative sample of 2,000 people in the US, and the UK.  

A full report, ‘Privacy in Perspective', will be provided to Contagious subscribers later this year, however a summary of the key research findings follows:

• Privacy has become a mainstream concern. 49% of respondents in the UK and 57% in the US say that protecting their online privacy is something they invest time and money in.

• A third (33%) of people in the UK have stopped using a product or service because they were worried about how it was using their personal data. A further 48% say they would consider doing so.

• In the US, 42% of people have stopped using a product or service because they were worried about the way it was using their personal data and another 40% would consider doing so.

• 30% of people in the UK and 44% of those in the US would be willing to pay something in exchange for total confidentiality when buying products or services online. Of these, those in the UK would pay an average of 21% extra while those in the US would pay 25% extra. In both countries the younger generations are more likely to be willing to pay something.

Key Themes/

1. Demographic Differences

Young people are most concerned about privacy and are creating new definitions of privacy to turn it in their favour

It is a common misconception that ‘young people don’t care about privacy,’ but it’s becoming clear that quite the opposite is true. Our research demonstrates that millennials and post-millennials are considerably more concerned about privacy than other generations and this is manifesting itself in how they interact both with their peers, and with brands.

Millennials and post millennials see the internet as a social tool, that can be used to build their brand. It is a two way process in which they both create and consume. Gen X and baby boomers see the internet as a utility for transacting business and finding information.

They are increasingly aware that their information has value, and brands regularly trade in it to their advantage. But there is a disconnect between the value people place on their information and brands who trade in it. They are demanding a fair exchange and want to negotiate the terms to mutual advantage.

• Millennials are 28% more likely to switch products or services because of privacy concerns than the rest of the population.

• 54% of people aged between 18 and 34 in the US have stopped using a product or service because they were worried about the way it was using their personal data. This is compared to 42% of the general population and 33% of people over 55.

• 48% of people aged between 25 and 34 in the UK have stopped using a product or service because they were worried about the way it was using their personal data, for example. This is compared to 33% of the general population and 30% of people aged 55-64.

 

 

Privacy is becoming a luxury good in the UK

High earners in the UK are more confident in their ability to protect their information online, and more likely to switch services because of privacy concerns.

• 78% of those with an household income (HHI) of over £90k in the UK think they have some or total control over their personal data, compared to 57% of the general population.

• 64% of those with an income over £90k in the UK believe it is possible for their information to remain completely anonymous compared to 35% of those with a HHI of under £30k and 28% of those earning between £30-60k.

• 68% of those with a HHI over £90k in the UK have stopped using a product or service because of privacy concerns compared to just 30% of those with a HHI under £30k.

• 63% of those earning over £70k in the UK would be willing to pay something in exchange for total confidentiality when buying products or services online compared to just 25% of those earning £10-30K.

 

 

2. Control and Context

Privacy manifests itself over a spectrum – it is about freedom, control and choice

People realize that their data is co-owned, that once something is shared it is out of their control. There is a desire to create and connect but they have increasingly little choice over how it gets shared and distributed. The balance of power is unequal. The dilemma is: how do you become secure without abandoning the internet? Therefore privacy means: freedom, choice, and control. Freedom to create and consume what I please, choice to share it (or not) as I please and only with whom I intend, and control over how it lives on.

• We’ve become accustomed to our every move being tracked, and no longer expect anonymity: Only 35% of people in the UK and 28% in the US expect that it is realistic for any information about themselves online to remain completely anonymous.

• As one millennial in the qualitative research put it: ‘I have to accept being tracked online: shopping, emails, social media etc. It's never going to change and will probably only increase.’

• The fact that we’re used to our information being tracked, doesn’t mean we like it. 49% of respondents in the UK and 57% in the US say that protecting their online privacy is something they invest time and money in.

• People also have very different privacy expectations in different contexts. ‘I think there's a big difference in terms of the expectation of privacy between Netflix and Gmail,’ explained one Gen X male we interviewed as part of our research. ‘Obviously it makes sense to me that Netflix is going to have a record of what DVDs I've watched. But it is off-putting to see a targeted ad based on an email I have sent -- it makes me think my email is being read by someone.’

3. The Impact on Brands

Privacy concerns are beginning to affect how we interact with brands

The current debate around privacy means that most businesses are now well aware that privacy is something they must address. Nevertheless, there is still a misguided view amongst some marketers that while privacy is something they need to be seen to care about, it is not really going to affect their bottom line.

However, as our research makes clear, privacy is already affecting how people interact with brands.

• Our research found that 42% of people in the US have stopped using a product or service because they were worried about the way it was using their personal data and another 40% would consider doing so.

• In the UK, 33% of people have stopped using a product or service because they were worried about how it was using their personal data. A further 48% say they would consider doing so.

• In some instances we’re even willing to pay a premium for privacy. 30% of people in the UK and 44% of those in the US would be willing to pay something in exchange for total confidentiality when buying products or services online. Of these, those in the UK would pay an average of 21% extra while those in the US would pay 25% extra.

• Young people are even more willing to pay a premium to ensure their privacy. In the UK, 45% of people aged 18-34 would be willing to pay a premium in exchange for total confidentiality when buying products and services online. This compares to 30% of the population, and 22% of people aged 45-54. 25-34 year olds in the UK would pay a privacy premium of 30%. Meanwhile, those aged 34-64 would only pay 18% more.

 

Conclusion /

As this research makes clear: privacy concerns are already beginning to encroach on how consumers interact with brands. Understanding what privacy means to modern consumers, and learning how to navigate privacy concerns, should be a key priority across every business.

For a full report on Flamingo’s findings, please click here https://flamingogroup.box.com/s/6e569xtalna9ojz9t1gn

About the research

Qualitative research was carried out by Flamingo, a global insight and brand consultancy. Research was conducted through an online community of 40 people, 10 each from four generational cohort (Post Millennial, Millennial, Gen X, Boomer) in the US and UK. This was followed up by eight in depth face to face interviews.

Quantitative research was carried out via online surveys conducted by Opinium in March 2014. A nationally representative sample of 2000 people was surveyed in each of the US and UK. 

www.flamingogroup.com

www.opinium.co.uk

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