What is the 'unwritten data contract'?

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By: Wise Marketer Staff |

Posted on March 6, 2013

Data has always been central to what marketing is and what it achieves - or at least what it promises to achieve - but customer data is now higher up the agenda for marketers than ever before thanks to digital technology, loyalty cards, email newsletters, location-based services, search engines, and online shopping, according to Tony Mooney, managing director for Sky IQ.

Consumer attitudes are changing as the social and technological landscape develops, including attitudes toward what information people would happily share, and who they trust with it. A decade ago it might have seemed implausible that online brands would be trusted with personal data by twice as many people as high street retailers but now, according to a recent Sky IQ study, it's a reality.

The company recently surveyed more than 3,000 UK adults to find out about their attitudes toward their personal data, in particular their attitudes on what personal data they reveal through social networking and what they think about giving information to brands. The results have revealed that we live in a very "data aware" society, with the majority of Britons admitting they are regularly thinking about how they guard or give up information about themselves.

How brands use consumer data
The good news for marketers is that most people support an 'unwritten data contract' with brands, in which they get better and more relevant advertising and offers in return for giving up some of their personal information. The majority of people (51%) said they thought this was a useful exchange for both parties, compared to 19% who disagreed.

Furthermore, 77% of the people polled said they are annoyed by irrelevant marketing campaigns after providing their personal data, and 69% said they expect better customer service from companies after providing such information.

This is encouraging for marketers. Consumers are proactively sharing information to improve the communications from brands and the onus on marketers is to deliver the right messages, delivered on the basis of mutual trust.

The organisations which people trust the most
While this is undoubtedly good news for brands and marketers, there is still the potential for trust to be lost very easily. To minimise this risk, brands need to ensure that they constantly prove what value customers can get out of the deal.

Almost four out of five people said that they are careful about what information they give to companies, and two out of five said they have been actively put off using a brand or web site because of its data policy. This raises the prospect of consumers deliberately withholding information from companies that haven't done enough to earn their trust.

Not only does this emphasise the importance of brands in being open and transparent about how a customer's data is used, but it suggests that there's an even bigger opportunity for marketers to build trust if they focus on creating campaigns that feel individualised.

There was further good news for brands as the study found that the number of out-and-out "data refuseniks" (those who actively avoid giving away personal data to brands) is relatively small. Our survey revealed that only one in seven people (14%) refused to have a loyalty card in order to prevent retailers from capturing data about their shopping habits.

By contrast, brands' loyalty schemes and email newsletters are still very popular. The study found that, on average, each British adult is signed up to five or six such loyalty schemes from brands.

What information do consumers give out online?
One of the surprises of our study was the popular verdict on social networks. While the majority of people said they are signed up to a social network, and are giving away more and more information on such sites all the time, many users said they have concerns about how far they can trust them. In fact, only 20% of people said they trust social networks with their personal data, while 46% distrust them.

Yet, in spite of this, the activity people said they were most likely to do was to share photos of themselves or other people online. Over half (52%) of those who use social media had done this on a social media site. And sharing photos online extends beyond just taking pictures of people. One in seven social media users (14%) admitted they had posted online a photo of items they'd just purchased as well.

More alarming, perhaps, was the lack of consumer awareness of privacy settings. One out of three people (33%) with a Friends Reunited profile, and 20% of those with a MySpace profile, couldn't say what their privacy settings were, showing just how challenging it can be to keep on top of what personal information we reveal online, and where, as our digital footprints expand.

The future of brands and data
So where does this leave brands in our data-rich world? The study found that, as long as brands continually offer them value, customers should remain happy to reveal some of their data in return. But it is then each brand's responsibility to use that data to market to their customers on a more personalised level, making the data exchange seem worthwhile and achieving better sales as a result.

But there's one area where this challenge will get more complicated: the world of visual images. The fact that so many photos are shared online - including photos of products people have just bought - poses a whole new set of challenges and opportunities for brands. In order to deliver truly individualised and targeted campaigns, brands need to go beyond just understanding text and numbers to embrace this new visual frontier as consumers express themselves increasingly in non-verbal ways online.

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