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Researchers debunk marketers’ claims that Americans are cool with trading their data

Jun 07, 20156 mins
Data and Information SecurityMicrosoftSecurity

Americans are not fine with trading their privacy, their data, for discounts and 'free' services, but are resigned to lack of control over their data.

You know those reports citing surveys that found U.S. consumers are fine with having their personal data collected so long as giving up that data means consumers get discounts? Well, that’s a bunch of bunk perpetrated by marketers who are opening up Americans to exploitation, according to a new report from the University of Pennsylvania’s Annenberg School for Communication.

After surveying 1,506 American adults, the researchers said in their report, titled “The Tradeoff Fallacy” (pdf), “By misrepresenting the American people and championing the tradeoff argument, marketers give policymakers false justifications for allowing the collection and use of all kinds of consumer data often in ways that the public find objectionable.” When that is “combined with a broad public fear about what companies can do with the data,” it “portends serious difficulties not just for individuals but also—over time—for the institution of consumer commerce.”

The researchers said their findings support a new explanation; not that Americans are cool with having their data collected – so long as they get a discount or it’s for a free service like email – but that “a majority of Americans” are actually “resigned to giving up their data—and that is why many appear to be engaging in tradeoffs. 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.”

For example, when asked, “If companies give me a discount, it is a fair exchange for them to collect information about me without my knowing,” 91% disagreed with that; 77% strongly disagreed. Instead of being OK with the tradeoff:

  • 71% disagree (53% of them strongly) 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.”
  • 55% disagree (38% of them 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.”

Only 4% agreed or strongly agreed with the three propositions above, showing that despite what marketers spew as survey results showing consumers are fine with tradeoffs, the fact is that “only a very small percentage of Americans agree with the overall concept of tradeoffs.” However, “a large pool of Americans feel resigned to the inevitability of surveillance and the power of marketers to harvest their data. People who are resigned do not predictably decide to give up their data.”

Many Americans simply don’t understand just how deep the personal-data-collection rabbit hole goes. Below are some of the statements that surveyed Americans were asked to score as true or false.

Although it’s shocking “how little people know about what happens behind the screen,” the survey reveals “most Americans do not believe that ‘data for discounts’ is a square deal.” When it comes to personal data collected by companies, the researchers found that “58% of Americans are resigned to not having a say in these activities—that they do not want to lose control over their information but also believe their loss of control has already happened.” In fact, “41% of Americans are not only resigned, they hold a dark concern that the basic dynamics of the emerging marketplace will cause them injury—and that they cannot control it.”

To add further to their stores of knowledge, increasing numbers of physical stores install tools that use Wi-Fi, Bluetooth Low Energy, ultrasonic and other technologies to identify individual customers’ presence, track their movements, offer them personalized coupons or other messages, and link that information to everything else they know about them.

Enormous is what the researchers called the amount of information marketers have already collected. They mentioned a Forrester Research estimation that “database marketing firm Acxiom has about 1,500 data points for each of over 500 million active internet users.” Another 2014 Forrester report “looked to not-too-distant circumstances where marketers would routinely make decisions based on ‘a customer’s circle of social relationships and influencers…sensor data [from in-store technologies], streaming real-time data, acquired data [from firms such as Acxiom]…anything’.”

In the not-too-distant future, companies may well merge the category “sports fan” with dozens of other characteristics about an individuals’ eating habits (at the ballpark, for example), income, number and age of children, house value, vacation habits, mobile-tracked locations, clothes-shopping habits, and media-use patterns to create profiles that dub them winners or losers regarding certain areas of shopping and the advertisements related to them. For reasons they don’t understand, people may see patterns of discounts that suggest they are being siloed into certain lifestyle segments. Certain advertisers may support their media habits but not, perhaps, to the extent that advertisers support neighbors or co-workers. The individuals will vaguely understand that their profiles are the cause, and they may try to change their behavior to get better deals, often without success, all the while wondering why “the system”—the opaque under-the-hood predictive analytics regimes that they know are tracking their lives but to which they have no access—is treating them that way.

The report adds, “When 3 of every 5 Americans are resigned to lack of control over their data relationships with marketers, when 2 of every 5 are both resigned to marketer control over their data and worried that the control can hurt them, and when people with knowledge are actually more likely rather than less likely to be resigned, we have a problem. “

The researchers suggest using the name-shame-praise approach to get corporations to be more transparent about how they use personal info. Additionally, you should advocate for the right to see your profile and scores and to know how it is used since companies analyze and predict future behavior based on those hidden profiles. As long as it stays hidden, “the potential for unwanted marketer exploitation of individuals’ data remains high.”

Without access to this information, individuals will continue to feel disempowered and disrespected by companies. Moreover, the very institution of consumer commerce may be threatened in ways that damage the broad canvas of American life.

ms smith

Ms. Smith (not her real name) is a freelance writer and programmer with a special and somewhat personal interest in IT privacy and security issues. She focuses on the unique challenges of maintaining privacy and security, both for individuals and enterprises. She has worked as a journalist and has also penned many technical papers and guides covering various technologies. Smith is herself a self-described privacy and security freak.