From data tsunami to data disaster!

27 Aug 2015
00:00

This is not a good time for data. After years of convincing ourselves that data in all its glorious forms was going to be the savior of all digital businesses, recent events have proven that it could be quite the opposite.

The widespread collection and re-use of any data we could get our hands on was going to be particularly valuable in addressing and improving the so-called customer experience.

Big data was touted by all and sundry as the panacea for curing all our ills – from churn reduction, to increased customer spending, detailed customer profiling to an individual level in real-time and, as a result, a happy and loyal customer.

Many of the arguments in favor of massive spending in data storage, reprocessing and analysis were fed by the revelations that online behemoths like Google, Amazon, Twitter and Facebook were making big money from this very data – some from their own use of it, others by selling it to eager buyers keen to learn the innermost secrets of existing and potential customers.

We even assumed that customers would be willing to trade their own personal information or allow us to deluge them with marketing attacks in return for free services. We soon learned that the only ones willing to cut a deal were the ones that didn’t have the money to buy what was being offered in the first place. That’s why they opted for the “free” service in the first place.

A recent survey by the Annenberg School for Communication, University of Pennsylvania, went as far as saying that marketers were “misrepresenting a large majority of Americans by claiming that they willingly give out information about themselves as a tradeoff for benefits they receive.” To the contrary, the survey revealed most Americans do not believe that “data for discounts” is a square deal.

The findings also suggested, in contrast to other academics’ claims, that Americans’ willingness to provide personal information to marketers cannot be explained by the public’s poor knowledge of the ins and outs of digital commerce. In fact, people who know more about ways marketers can use their personal information are more likely rather than less likely to accept discounts in exchange for data when presented with a real-life scenario.

Instead, the findings support a new explanation: a majority of Americans are 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. The study revealed that more than half do not want to lose control over their information but also believe this loss of control has already happened.

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. Moreover, 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.”

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