The cost of privacy

My email this morning included a message from Hertz describing their new fleet of BMWs. I don’t rent from Hertz anymore and the emails they continue to send are mostly reminders that my driver’s license has expired, which was some while ago. But why the BMW pitch? Europe-3220193_960_720Perhaps because in 2009 I treated myself to a BMW 3 series rental in Ireland which was great fun on the winding roads of the Dingle Peninsula and Ring of Kerry? Maybe they have a long memory? Or maybe the fact that I currently drive a BMW somehow found its way into my profile?

In any case, it reminded me of Pew’s recently released study, “Americans and Privacy.” A few relevant findings:

  • 72% of US adults believe that all or most of what they do online is tracked by companies.
  • 79% are either very or somewhat concerned about how their personal data is being used by those companies.
  • 59% say they understand very little or nothing about “what companies do with their data” and only 18% say have a great deal or some control over their data.
  • 28% say they benefit a great deal or somewhat from the data companies collect on them and 81% say “the potential risks outweigh the potential benefits.
  • 75% say there should be more “regulation of what companies can do with their customers’ personal information.”

I could go on, but I think these few examples make the point: the US public is beyond fed up with daily and routine violations of their privacy. They are especially concerned about the amount of personal information about them collected by social media companies (85%), advertisers (84%), and the companies they buy things from (80%).

The old saying, “On the Internet nobody knows you're a dog,” is no longer a thing.

The sad reality is that most, although not all of this data collection and reuse is legal, at least in the US, and that’s not likely to change anytime soon. One frequently cited reason for not taking privacy and personal data protection more seriously is that it just costs too much.

Earlier this year the Information Technology and Innovation Foundation (ITIF) released a study, “The Costs of an Unnecessarily Stringent Federal Data Privacy Law.” By way of definition “unnecessarily stringent” means something similar to the GDPR or CCPA. And the report estimates that such a privacy regime would cost the US economy about $122 billion (sometimes they say “billion” but the tables say “million”) per year, or $483 per US adult. (By way of comparison, that’s more than 50% of what we spend on electricity every year.)  So what are those costs?

Around 10% would go to Data Protection Officers and upgraded data infrastructure,  two major areas of complaint about the GDPR. But the lion’s share, 85% of the total, would go to  two areas: Reduced Access to Data and Lower Ad Effectiveness.

In the case of the former, privacy requirements such as express consent, data minimization and purpose specification will reduce data sharing. In one of my favorite sentences in the report the authors write, “Unfortunately, opt-in requirements frame consumer choices in a way that leads to suboptimal data sharing because most users select the default option of not giving consent—for a number of irrational reasons.” So best we stop asking.

As for Lower Add Effectiveness, the report tells us that “Targeted advertising is beneficial to consumers and businesses.” Such advertising allows businesses to be more efficient and increase sales. “Consumers benefit by gaining more utility from relevant ads.” More utility?

Sadly, I hear similar arguments from within market research in the form of complaining about the cost of compliance as GDPR goes global.

One of my favorite lines in the old CASRO Code of Conduct is this one: “Since research participants are the lifeblood of the research industry, it is essential that those approached to participate be treated with respect and sensitivity.” I worry that we’ve lost that sense of respect for those whose data we rely on, whether when collecting from them directly or harvesting their data from the cloud. Online panels have led to us thinking of respondents as a commodity and our increasing reliance on big data sources has caused us to stop thinking about them as people at all. In the privacy debate they are an abstraction in a one-sided cost benefit exercise.

There are recent surveys that show those people who are our lifeblood don’t think very highly of us these days. They don’t trust us with their data any more than they trust social media networks or advertisers and, whether rational or irrational, they are less and less inclined to cooperate with research requests. This is not a good thing, to say the least. It’s important that we figure out sooner rather than later whose side we are on.

A bad survey or no survey at all?

For a whole lot of reasons that I won’t go into online privacy suddenly is front and center, not just in the research industry, but in the popular press as well. The central message is that people are “concerned,” but about what exactly and by how much, well the answers there are all over the map. One of the few clear things about this whole debate, if that’s what it is, is the ongoing misuse of online surveys to describe what is going on.

I am hard pressed to think of anything sillier than using online surveys to help us understand attitudes about online privacy. Think about it. You have a sample of people who have signed up to share their personal behavior, attitudes, and beliefs in online surveys. What in God’s name could possibly make us think that these online extroverts, this sliver of the population, could possibly represent the range of attitudes about online privacy among “consumers” as generally alleged?  MisinformationIf ever there was an example of an issue where online is not fit to purpose, this is it. Yet these surveys are churned out weekly, generally to serve the commercial interests of whoever commissioned them, and often widely cited as some version of the truth.

To quote H. L. Mencken, “A newspaper is a device for making the ignorant more ignorant and the crazy crazier.” Sometimes it feels like online surveys serve a similar purpose.


"Is it legal?" is not enough

I just posted a link to this Computerworld article on my Twitter feed, but I think it's so important that I have decided to mention it here as well. The article describes the dangers brands are beginning to face with over aggressive big data and data mining practices. The key point is that it's not just about what is legal, but that consumers are can also be sensitive to what they view as privacy violations and over aggressive marketing.

These are extra legal areas where codes of conduct developed by industry and trade associations have traditionally protected both research agencies and their clients from public backlash. It has become fashionable in some quarters to argue that these quaint notions are holding back market research and providing an opening for new entrants to realign the competitive balance in the industry. This is a good reminder that respect for consumers never goes out of fashion.

If You Need to Know What’s Legal, You’re Already on the Losing Path

This is the second and final post from Michael Link on location.

Privacy and ethics concerns in research are not new, but they have taken on considerably higher visibility in our 24/7 news world as researchers test the bounds of new measurement approaches. At a recent symposium on Leveraging Location hosted by Nielsen, a panel of legal experts provided some thoughts in this area on issues researchers are encountering today. Their insights went well beyond location data, hitting on aspects that involve many of us working with data from the public. (Obligatory warning: I’m not a lawyer; these are simply my observations and interpretation of the discussion). Three broad lessons caught my attention:

First and foremost, start with the respondent/consumer, understanding and acting in accordance with their expectations. How data are collected and the insights generated should be readily apparent to the “average person.” If your starting point is “the law” or “what is legal”, you’ve already put yourself in a hole. Laws and regulations provide a base -- a bare minimum, what the public demands is often much more. As researchers we should operate within the reasonable expectations of the majority of the public, yet not necessarily feel constrained by folks on the extremes.

Second, to lead in innovation you cannot be afraid to have your name in the paper and receive negative comments. In essence, as one panelist put it “get comfortable not being comfortable.” Pushing the envelope involves a degree of calculated and real risk. If your organization likes to keep a low profile and acts with alarm at the first half-dozen negative emails received, then you might want to take “innovation leader” off of your long-term business strategy. Note that Rule #1 above is still in effect, so setting expectations accordingly and having a good grasp of the potential risks is imperative.

Third, time is an important and often under-appreciated dimension of attitudes towards privacy and ethics. These are not static features of our society, but rather evolving concepts. What may have been unthinkable a few years ago (using a smartphone as a “virtual wallet”) now seems commonplace. Likewise, certain aspects of data collection in this digital/organic data era that seem unreasonable to the public today (and hence, would be good to avoid) may become more readily accepted with time and incremental exposure. The trick to innovating, of course, is knowing when the time may be right. To this there is no clear right answer, but the public (and the press) will let you know if you have chosen unwisely.  

New survey says everybody has a price

Like many people in this business I've been thinking a lot about data privacy these last few weeks. So when I see a headline from Research-Live come into my email saying, "Half of consumers willing to share their data, says survey," I wonder what's up because it doesn't quite gel with other data I'm seeing. On close examination it's only 45% and there are other hedges as you go down through the piece.  Most importantly, the right verb for the headline probably is "sell" rather than "share." It turns about to be not terribly earth-shattering despite noble attempts by the sponsor and spokesperson for the company that did the work to make it sound special.

The real issue for me is not the numbers; it's whether I should believe any of what this piece says. I would like to know at least something about how this research was done beyond the N and the countries where people were interviewed. Was it online? How was the sample drawn? Who provided it? How were the questions worded? Was their weighting? And so on. I spent a few minutes searching the web for more info, but all I got was more links to the same unhelpful press release.

SalesmanI don't mean to be singling out the good folks at Research-Live. This stunning lack of transparency is now commonplace in virtually all media channels. Online has made it possible for pretty much anybody to do a survey, whether they know or care about what they are doing or not. The web is awash in press releases with exciting findings from surveys, often with zero detail to help the reader understand whether those findings have any real meaning or are just cherry-picked from a bullshit survey. All of this is one more reason why the public has such low regard for surveys and why late night comedians can create an immediate giggle in their audience by saying, "There's a new survey out today . . ."

As it turns out, there is another survey on the same topic and with a similar finding:

According to the survey, 57 percent of consumers are willing to share additional personal information, such as their location, top five Facebook friends' names and information about family members, in return for financial rewards or better service, while 54 percent would even allow this data to be passed on to a third party, under the right conditions.

No details on the methodology used for this survey either. And I'm not going to jump to any conclusions just because the survey was released on the same day the sponsor announced a new suite of online data management and analytic products.

But I wonder whether the survey asked about throwing grandma in to get a better price?