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Building a healthy and transparent data economy

(Image credit: Image Credit: Pitney Bowes Software)

Marketing may be about strategy, tactics, audiences, creative, campaigns, technology, data and the associated legislation. But ultimately, marketing has been and always will be about the customer. After all, without that individual, marketing is irrelevant. Without the customer saying ‘yes’, there is no business. At this time of fragmented technology, exponential data growth and in the form of GDPR, the biggest sea-change in data legislation in more than a generation, where better or more important to orientate ourselves than around the customer?

Recently, the DMA in partnership with Acxiom conducted a comprehensive survey of UK consumers exploring public attitudes towards privacy. It showed that the steady shift in societal attitudes towards data exchange has continued to advance. The number of people in the UK who claim to be concerned about the issue of online privacy has fallen from 84 per cent in 2012 to 75 per cent just five years later. Among 18-24 year-olds, concern with online privacy fell to just 58 per cent, down from 75 per cent in 2012. At the same time, almost two-thirds of consumers are now happy with the amount of personal information they share with organisations. All of this, despite ‘data stories’ that will continue to appear for as long as we all create and use data; we businesses and consumers alike.

The vast majority of people have no fundamental objection to sharing their personal data. Indeed, over half are prepared to engage in data exchange so long as there is a clear benefit for doing so, while a further quarter show little concern with sharing personal information altogether. Just 25 per cent of UK consumers show an unwillingness to engage with the data economy.

Overall, there is clear evidence of a maturing data economy, with significant consumer awareness and acceptance of the use and role of data exchange in modern economies. However, the level of comfort demonstrated with exchanging personal data with industry is lower and an indicator that becoming more aware and accepting of the data economy may not necessarily lead to proactive and positive engagement. Indeed, a challenge for the industry will be how to capitalise on the positive consumer attitudes highlighted in this report and ensure that customer engagement with the data economy does not end with a sense of reluctant acceptance.

Promoting a healthy data economy

In order to promote a healthy data economy in the UK, it will be crucial to ensure that potential benefits derived from data exchanges are communicated clearly to consumers. The DMA-Acxiom research shows that the majority of people believe that sharing personal data still benefits companies more than it benefits them. Moreover, a significant proportion of people claim that they would be willing to pay for online services such as email and social networking sites that are traditionally free of charge, owing to the data-driven advertising model.  Of course, claiming willingness to pay is different to signing up to pay. And how much is too much, £5 or £25 per month, for your favourite social app is not yet known.

The current state of the data economy would benefit from some adjustment to create a sustainable model, most fit for purpose in the years ahead. Beyond clarifying the benefits received from data exchanges to all parties involved, it was also found that people want greater control over data sharing processes, and opportunities, and place high emphasis on trust and transparency when it comes to deciding which businesses to entrust their information to.

Challenges for the current data economy

However, this acceptance of the data exchanges is not all encompassing. Take for example, the rising interest in ad blocking technology. A third of respondents had already used ad blocking technology, while a further 41 per cent would be interested in doing so. Only 12 per cent showed no interest in using ad blocking in the future. The use of such technology would enable consumers to put any unrest with the current value exchange model into more direct action.

And yet, today, there is a UK consumer base that is more open to engage with the data economy than not. Increasingly, consumers see their personal information as an asset that they can use to negotiate for better deals and offers; a sentiment that is prevalent across age groups. The rise of the ‘Consumer Capitalist’ continues to advance. The number of people who view their personal data as an asset has increased to 56 per cent in 2017 – up from 40 per cent. Moreover, 61 per cent of 18-24 year-olds view their data in this light – suggesting younger generations see clearly their data as a valuable, exchangeable commodity. What is less clear at this stage is what practical models exist or may develop to enable consumers to use their data this way.

In a hyper-busy world, will consumers really spend precious time trading their data? Will consumers be able to make enough money to make this worthwhile? Will we really be able to create a world where data only flows if the consumer gives their consent? Unlikely, given that consent today is just one of six legal grounds for processing. Research continues into personal information management systems but many practical obstacles remain. It would seem the focus should be on consumers getting transparent value from the current data exchange rather than hold out for a data utopia that may never happen.

Control remains key and building trust is paramount

The desire among UK consumers for greater control over data collection and usage remains significant. While 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 clear majority (86 per cent) still hold this ambition.

Another fundamental to building a healthy data ecosystem is establishing trust so that people feel comfortable with sharing their personal information. Being able to get higher value goods for lower prices as well as receiving free services and products in return for sharing personal data, are considerations, but secondary.  Organisations have traditionally focused on establishing corporate trust, but once this foundation is in place, there is a growing opportunity to engage consumers with a growing range of trust-based value propositions. Consumers need to enjoy high levels of transparency over how and why their data is being collected and to what end as that demystifies the marketers’ use cases and increases trust. Consumers will continue to show an interest in data, in our data-dominated world and trust with transparency go hand in hand with making it a world that works for both the consumer and marketer alike.

Incentives for data sharing

UK consumers are showing growing appreciation and receptiveness to a range of incentives that go beyond direct financial reward. For example, we’re witnessing growing numbers in the UK who believe that they receive an improved service from companies in return for their personal data.

The proportion of respondents that indicate they would engage in data exchanges with companies in return for rewards and offers has increased. The fastest growth has occurred among the more indirect rewards such as personalisation, recommendations and access to exclusive events and content.

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

The report provides a pragmatic and optimistic outlook for the future data economy in the UK. So long as businesses remain transparent and responsive to people’s needs and expectations, the country’s data economy should continue to benefit businesses and importantly, consumers like you and I.

Jed Mole, Vice President Marketing, Acxiom
Image Credit: Pitney Bowes Software

Jed Mole
Jed Mole, Vice President Marketing at Acxiom. Acxiom enables people-based marketing everywhere through a simple, open approach to connecting systems and data that drives seamless customer experiences and higher ROI.