April 18, 2018
6 min read
Opinions expressed by Entrepreneur contributors are their own.
In the past year, research has revealed the negative health effects of social media and its negative impact on our society. Facebook has been heavily criticized for its laissez-fair handling of personal data, which has led to questionable privacy and data collection practices by social media networks and big data firms like Cambridge Analytica. A report from TRUSTe/National Cyber Security Alliance (NCSA) found that 92 percent of Americans worry about their privacy online while only 31 percent understand how companies share their personal information.
Consumers may have mostly ignored the details of privacy policies for years, but now that the negative consequences of those practices have hit people’s newsfeeds, consumer, investor and lawmaker confidence is eroding. The U.S. experienced the most extreme loss in trust ever measured from 2017 to 2018, according to Edelman Trust Barometer. Trust in U.S. institutions dropped from trusted (68) down to distrust (45). As a marketer what should you do?
The Edelman Trust Barometer reports that 80 percent of U.S. consumers chose to buy from companies they trust, and 68 percent would recommend those companies. Yet, 63 percent would not buy from a company they don’t trust, and 58 percent would criticize those companies to friends and colleagues. A survey of food brands by Label Insight found that 94 percent of consumers are more likely to be loyal to a brand when it commits to full transparency, and 73 percent are willing to pay more for that transparency. As a marketer, you cannot afford to lose trust in your brand, and social media is a large contributor to brand trust.
Nobody likes a tradeoff.
Your customers don’t really want to trade information about themselves for better deals. Research by professors Joseph Turow, Michael Hennessy and Nora Draper found that marketers were incorrect in assuming that a majority of Americans give out information about themselves as a tradeoff for benefits they receive. The researchers found that marketers have been living under a trade off fallacy. Only 21 percent of Americans agreed that getting discounts, free services or better services for collecting online information is a fair tradeoff. In fact, 72 percent of Americans believe that what companies know about them from their behavior online can hurt them.
Time for an institutional audit.
Since this social media shakeup, now is a good time to take an audit of your own practices. What data do you collect? Is all of it necessary? Is the information you collect from your customers a fair trade for the discounts or services you provide? How long do you keep that data? A Deloitte study found 93 percent of consumers believe they should be able to request a company permanently delete data. Are you selling or providing access to third parties? What are they doing with that data and what are their practices and policies?
Researchers Lorrie Faith Cranor and Aleecia McDonald calculated how much time it would take to read all of the privacy policies an average internet user encounters in a year. They found it would take 76 work days, or 15 work weeks, to complete. A Fairer Finance survey found that the small print for some companies now runs more than 30,000 words. Seventy-three percent do not read all the fine print, and of those who do, only 17 percent say they understand it. Are you making it easy for your consumer to understand what you collect and how you use it?
Don’t be creepy.
Just because Facebook offers targeting based on 98 personal data points does not mean you have to use them all. An InMoment report of U.S. consumers and brands found that 75 percent of consumers find most forms of personalization creepy, and 22 percent would leave a brand after a creepy experience. Being creepy is having a negative effect. The Deloitte study found a 10-point drop in 2017 for willingness to share personal data in exchange for personalized advertising — from 37 percent to 27 percent. Is your personalization too personal?
Don’t throw the baby out with the bathwater.
The one thing we shouldn’t do is get rid of social media and internet marketing completely. Psychology Today reports that social networking and the internet have positive benefits when used to communicate with family and friends providing social support that benefits people’s mental health. A Time, Inc. survey found nearly 90 percent of respondents like custom online content as a way for brands to engage with them, and two in three have greater trust in that content than traditional advertising. A Stackla survey found 86 percent of people say authenticity is important when deciding what brands they like and support. Consumers engage with brands when there is an authentic value exchange from consuming the content. Is your online and social media strategy focused on the positive benefits of delivering consumer value?
Consumers want relationships with brands online, but if we are to earn their trust, we must make efforts to give them more control over that relationship. If we don’t, we are most likely in for even more crises and new government regulations like the European General Data Protection Regulation (GDPR), which takes effect in May.