When it comes to personal data, consumers have their price

Does everybody have their price? Despite concerns about data privacy, consumers can be incentivized to share that information, although they won't necessarily be happy about it.

Several recent studies have shown that consumers are willing to give their personal data to retailers and other companies if they get something in return, eMarketer reported. But other research said they are simply "resigned" to the inevitable.

For example, Sentient Decision Science was doing research for Microsoft last spring and asked Internet users what incentives might motivate them to share personal information with brands. Every respondent said they'd do it in return for cash rewards or significant discounts.

Also in the spring, ORC International conducted polling for Kelly Scott Madison that indicated 52 percent of U.S. internet users cited discounts on service costs as an incentive for sharing personal data, with 45 percent saying the same about coupons or discounts. Fifty-nine percent of internet users sampled by Trend Micro reported that they would exchange personal data with companies they trusted in return for money.

While it is well documented that consumers are worried about how their data will be used, companies using the data are also concerned. Results from Marketing Executives Networking Group research, also last spring, showed that 60.6 percent of U.S. marketing executives agreed or strongly agreed that companies were not doing enough to safeguard privacy. This exceeded the 57.9% of internet users who said the same thing.

March 2015 research by the Annenberg School for Communication and Princeton Survey Research Associates revealed that 84% of internet users want to control what marketers learn about them online.

Another Annenberg study—"The Tradeoff Fallacy"—reported that most Americans do not believe receiving discounts in return for their data is a fair deal. For example, 91 percent disagreed, and 77 percent disagreed strongly, to the statement, "If companies give me a discount, it is a fair exchange for them to collect information about me without my knowing." 

Additionally 71% disagreed, and 53 percent strongly disagreed, that "It's fair for an online or physical store to monitor what I'm doing online when I'm there, in exchange for letting me use the store's wireless internet, or Wi-Fi, without charge." And 55% disagreed, 38 percent strongly, that "It's okay if a store where I shop uses information it has about me to create a picture of me that improves the services they provide for me."

This challenges the commonly held notion by marketers that Americans give out personal information as a tradeoff for benefits received. Instead, they are "resigned" to giving up this data. "Resignation occurs when a person believes an undesirable outcome is inevitable and feels powerless to stop it. Rather than feeling able to make choices, Americans believe it is futile to manage what companies can learn about them. Our study reveals that more than half do not want to lose control over their information, but also believe this loss of control has already happened," the Annenberg report said.

"The futility we found, combined with a broad public fear about what companies can do with the data, portends serious difficulties not just for individuals but also—over time—for the institution of consumer commerce."

Further analysis showed that only a small percentage of Americans agree with the concept of trading their data for incentives. "To further question marketers' emphasis on Americans' use of cost-benefit calculations, we found that large percentages of Americans often don't have the basic knowledge to make informed cost-benefit choices about ways marketers use their information," the Annenberg report stated.

Other studies still showed a willingness to share personal data. Research firm Mintel found that 60 percent of millennials would be willing to provide details about their personal preferences and habits to marketers, as opposed to baby boomers, who are much more protective of their information.

A study by the Acquity Group, which is part of Accenture Interactive, reported on the willingness of consumers to trade data from their car in exchange for features of the vehicle that would benefit them. For example, over 35 percent indicated that they would share data if the car warmed and defrosted automatically "depending on my schedule"; over 40 percent said they would share data if the car told them the routes to take that would avoid traffic in a daily commute; and 60 percent said they would share in exchange for one free maintenance session.

"Despite concerns with security and privacy, consumers incentivized with coupons or helpful information are open to sharing data with third parties, such as brands, manufacturers, friends or family," the Acquity report said. "Forty percent of consumers are willing to share data from their wearable devices with retailers or brands in exchange for coupons, discounts or information."

For more:
-See this eMarketer article
-See this Annenberg study
-See this Mintel press release
-See this Acquity press release
-See this Acquity study

Related stories:
Apple's Cook promotes privacy, government Pay functions at summit
At summit, President orders cybersecurity efforts, PCI applauds
The untold story of the Target data breach
Target's $19 million breach settlement with MasterCard falls through
Industry group issues engagement, data privacy guidelines

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.