2014 was a watershed year for data hacking incidents and cyber security breaches. Following in the wake of Edward Snowden’s 2013 leak of classified National Security Agency (NSA) documents to The Guardian, more than 250 million consumers’ personal data was stolen or comprised from a variety of well-known and respected companies.[i] To no surprise, our research findings from that time showed that consumer concerns about the privacy of their personal data increased notably in 2014 over prior years with over 90 percent of US consumers being very or extremely concerned compared to 80 percent in 2012 and in 1999.[ii]

Data privacy remains a hot-button issue, fueled by the 2016 Democratic National Committee (DNC) hacks, controversy surrounding Presidential candidate Hillary Clinton’s private email server, and continued speculation about potential Russian influence in the election results. Could 2017 prove to be another watershed year for data privacy concerns?

Following up on our earlier research, we asked over 8,500 consumers in six markets[iii] (United States, Australia, China, Germany, Japan, and the Netherlands) about their level of concern over the privacy of their personal data, and whether this concern impacts their online and offline behaviors. Our results show that – despite recent high-profile data privacy incidents – consumers’ level of concern has returned to pre-2014 levels: About 80 percent of surveyed consumers indicate that they believe they have lost control over how their personal information is collected and used by companies, a level essentially the same as that reported in both 2012 and 1999.

Since younger consumers have grown up in the digital era, we thought it reasonable to assume they have fewer privacy concerns than their elders. Indeed, when we compared results across age groups, we found that data privacy concerns increase with age but that the degree of difference is not as dramatic as some might think. Consumers aged 55 and older (pre boomers/boomers) have the highest levels of concern, at 85 percent. Those between ages 54-21 (Gen X and Gen Y) have essentially the same levels of concern, at about 80 percent. Gen Z has the comparatively lowest level of concern, at 70 percent, but this is still a relatively high level.[iv]  

Do these data privacy concerns impact consumer behavior? In short, yes. According to our study, although 72 percent of consumers say they participate in market research a couple times per year and a majority of consumers in all age groups feel that the opinions they express will make their experiences with those brands or companies better, refusal to participate in market research has increased over prior years. In fact, self-reported declines to complete surveys increased from 47 percent in 2014 to 55 in 2016. This increase appears to stem from privacy concerns more than lack of time, interest, or incentive, as concerns about privacy was the top reason at 52 percent, compared to lack of time at 18 percent, interest at 17 percent, or inadequate incentive at nine percent.

Our research also showed that consumers are using a variety of protective actions that have implications for companies seeking to engage with them, whether to conduct market research or sell a product. Consumers are becoming more informed (e.g., reading privacy agreements), adjusting the privacy settings on their electronic devices, disabling cookies and deleting specific apps, providing false information on websites, and decreasing their online and offline interactions with certain companies – including not buying their products.

Companies need to take five key actions to reduce consumer concerns about data privacy and increase consumer engagement. These are, in order of importance:

1) Make it easier for consumers to determine what information they do and do not want to share;
2) Increase the transparency of how consumers’ data will be used;
3) Allow consumers to opt out of sharing information;
4) Make privacy policies easier to read; and
5) Provide value for sharing information. 

Discuss these findings with the study's authors at NEXT, May 9-10 in New York.

 


[i] Forbes, “The Big Data Breaches of 2014, “January 13, 2015.  Accessed at:

https://www.forbes.com/sites/moneybuilder/2015/01/13/the-big-data-breaches-of-2014/#12b8d64eefe6

[ii] Consumer Concerns about Data Privacy Raising: What can companies do? (2013), Pingitore, Cavarallo, Meyers. McGraw Hill Global Institute; Data Privacy: Implications for Market Researchers, 2015 CASRO Digital conference, Pingitore, Lykes, Cavarallo.

[iii] United States (n ≈ 1539), Australia, (n≈1345), China (n≈1338), Germany (n≈1494), Japan (n≈1233) and Netherlands (n≈1479) to respondents age 18 and older. Data are weighted to be representative of each country’s age distribution using the respective census data.  

[iv] We weighted the response data to be equal to the U.S. census age distribution to ensure representativeness and generalizability, and grouped respondents by age into the following generational categories: Gen Z = 13-17; Gen Y = 18-35; Gen X = 36-47; Boomers = 48-66; and Pre-Boomers = 67 years old and older.