eMarketer Webinar: Perspectives on Digital Privacy—Marketers, Consumers, Feds

©2011 eMarketer Inc.

David Hallerman

Principal Analyst

N O V E M B E R 1 7, 2 0 1 1

Perspectives on Digital Privacy—Marketers, Consumers, Feds

Sponsored by:

©2011 eMarketer Inc.

What we’ll look at today…

The main issues: factors driving the privacy debate today and tomorrow

Consumer concerns: what privacy means, and doesn’t mean, for the audience marketers look to reach

Mobile privacy: our in-pocket devices carry particular concerns

Social media: how sharing with friends turns into sharing with corporations, and how that affects marketing

Potential government actions: regulations and laws, in the US and the EU

Ad industry solutions: techniques for dealing with privacy concerns–both today and tomorrow

Twitter – #eMwebinar

Various themes will keep coming up in today’s webinar

The Main Issues

(complex questions, incomplete answers)

The privacy landscape is filled with more questions than answers

Online companies controlling too much personal data is a prime focus of privacy concerns

Grace Liau, senior vice president, VivaKi

“Because consumers have a lack of control, and cannot manage their risk, it almost seems as if their life is in

somebody else’s hands. And I think that sums up what consumers are concerned

about.”

Privacy can be defined as control, and ceding control can lead to trust

Control gives users the ability to…

…reveal themselves selectively

…determine who can collect data about them

…say which third parties can share that data

…limit the devices on which data can be gathered

…define how that data will be used

…regulate how long that data can be retained

…decide to exchange data for transparent value

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Jeff Jarvis, director, Tow-Knight Center for Entrepreneurial Journalism

“It’s not about privacy. That’s the problem here. It’s about a lack of trust.

It’s about a lack of transparency. It’s about

a lack of perceived value.”

Some of the most commonly targeted types of ads are among the least trusted

The vast majority of consumers simply want to know what data is being collected, a form of control

Omar Tawakol, chief executive officer, BlueKai

“Data is fundamentally the

currency that’s making online

advertising grow.”

Control, collection and usage of data is core to the privacy debate

Who owns the data?

Who should control data collection and usage?

Who should be allowed to collect the data?

What types of data should companies collect?

How long should companies be allowed to retain the data?

How should companies use the data for marketing?

How transparent must companies be about ALL of their actions surrounding data collection and usage?

How difficult is it for the average consumer to set up and maintain privacy and data usage settings?

Even if reputable companies work to deal with privacy problems, what about the bad actors (some might be prominent, too)?

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When it comes to data, control and knowledge are essential for at least half of consumers

Jules Polenetsky, director, Future of Privacy Forum

“Marketers often think privacy means they

can’t market to someone, as opposed to responsible data

use.”

Most of the types of data used to improve marketing are used for targeting ads

A majority of internet users would only consent to share simple data: demographic information and their hobbies or interests

Reid Hoffman, executive chairman and co-founder, LinkedIn

“All these concerns about

privacy tend to be old people

issues.”

Is the privacy debate outdated? Or is the concept of privacy simply changing?

Consumer Attitudes About Privacy

(contradictions found here)

Reasons for privacy concerns vary significantly by age

People say they are concerned about privacy, but what is the…

…specific nature of that concern?Their personal information will be exposed?

Personal information will be shared with wrong parties?

They simply don’t trust advertisers or corporations?

They’ll receive unsolicited promotional materials?

They’ll be scammed or exposed to sleazy advertising?

Their data will be hacked? (Especially true with mobile)

Unknown strangers will monitor their online activities?

A basic loss of anonymity?

Being tracked is creepy or somehow unsettling?

They want control over information about themselves?

Twitter – #eMwebinar

Being tracked and targeted turns privacy issues into something that seems more sinister than it tends to really be

Most people know advertisers are targeting them, but may not know why

Internet users are all over the place when it comes to privacy concerns

Internet users regularly contradict themselves about privacy concerns

Scott Meyer, chief executive officer, Evidon

“There is a huge gap between what

consumers say and what they do in terms

of managing their privacy.”

More mixed messages: people don’t click because ads are irrelevant, but worried they’ll be tracked

Jules Polenetsky, director, Future of Privacy Forum

“You end up with this great irony where, in

study after study, users generally have a

negative feeling, but happily consume the sites and services.”

User attitudes about tracking create significant limits for targeting

Most people do not want to be tracked, to have their data collected, or to be targeted (perhaps it’s the language)

Mobile Amplifies Certain Privacy Concerns

(personal and portable)

Privacy is a primary concern among smartphone users

Mobile devices add three wrinkles to consumers’ digital privacy concerns

Personal items: users often see their smartphones as a private space

Location tracking: for many, it’s unsettling for strangers to know where they are at any moment

Ad-supported apps: data-gathering doesn’t use cookies but baked-in, and no transparency of collection or usage

Twitter – #eMwebinar

It’s the unknown that exacerbates concerns among smartphone users

Chris Babel, chief executive officer, TRUSTe

“Consumers are more worried about the

device that’s in their pocket all the time than they are worried about

what’s on their computer.”

Concerns about location services all address some loss of control

Paul Gunning, chief executive officer, Tribal DDB Worldwide

“Some of the legislation talked

about doesn’t address mobile at

all.”

What sorts of data do mobile users think is private?

70% of marketers find mobile privacy issues a challenge, too

Social Marketing and Privacy Concerns

(a vulnerable space)

Most people have some level of concern about privacy on Facebook

If you don’t like that study on Facebook privacy, here’s another (and another)…

Sheryl Sandberg, chief operating officer, Facebook (on November 7, 2011)

“People talk about Facebook and privacy a lot…but it’s because we

lead in this area, meaning that we are the most privacy-focused

place for anyone to share anything.”

Regular changes in Facebook’s privacy settings make control difficult

A majority of users are only somewhat confident about their social privacy settings (over 20% even less confident)

danah boyd, senior researcher, Microsoft Research

“What I find most fascinating in all of the

discussions of transparency is the lack

of transparency by Facebook itself….I

mean transparency in interface design.”

The more people use Facebook, the less their privacy concerns…meaning what?

Jeff Jarvis, author, “Public Parts: How Sharing in the Digital Age Improves…”

“800 million people on Facebook can’t be

wrong or drunk. They’re doing it for a

reason.”

People are more concerned about privacy on Facebook than other sites

Mark Zuckerberg, chief executive officer, Facebook (on November 7, 2011)

“If you look at companies, whether it’s Google or

Yahoo! or Microsoft…they also have a huge amount of information about you. It’s just that they’re collecting that about you behind your

back.”

Senior executives are also concerned about privacy when doing social media marketing

Giving value to an audience for their data is highlighted in the social space

Potential Government Actions

(regulations and laws)

Figuring solutions to the privacy puzzle requires actions from many players

Which players should be responsible for protecting user privacy?

Advertisers and agencies? Online publishers and retailers? Search engines? Trade groups, such as the IAB? Privacy vendors, such as TRUSTe or Evidon? Other ad-infrastructure vendors, such as ad networks? Browser makers? Operating system creators? The government? Users themselves?

Twitter – #eMwebinar

Interesting that “only” 59% of internet users say government should be responsible for protecting their privacy

Omar Tawakol, chief executive officer, BlueKai

“The role of the government is to make people sit up straight

and follow self-regulation and, actually, to prod the industry to

aim for something better than it has.”

Slightly more people of each age group prefer government regulation to industry self-regulation

Few internet users trust the government to protect their online privacy

Jules Polenetsky, director, Future of Privacy Forum

“Increasingly, countries are adopting privacy models that to

some degree reflect the European

influence.”

Scott Meyer, chief executive officer, Evidon

“In Europe this is not about behavioral

advertising. This is about all forms of data collection.”

What the Ad Industry Is Doing

(and other things it might do)

Privacy concerns create uncertainty for the entire digital ad industry

Jonathon Shaevitz, chief executive officer, Maxifier

“Transparency is going to be the only remedy in the long run.”

Two basic ways the ad industry is responding to privacy challenges

Transparency: here is what we’re doing and why we’re doing it

Trade-offs: here is something of value in exchange for your time, attention and data

Of course, transparency itself is a form of value—knowledge and control help create trust

Twitter – #eMwebinar

Jeff Jarvis, director, Tow-Knight Center for Entrepreneurial Journalism

“Radical transparency hands over complete

control to the public–even to the point that they can say ‘stuff it’ to that

advertiser.”

Privacy-enhancing technologies, yesterday, today and tomorrow

Self-regulation methods:

Privacy policy pages

DAA options icon

Do-not-track headersTwitter – #eMwebinar

Jon Leibowitz, chairman, Federal Trade Commision (on November 8, 2011)

“Not every self-regulatory program includes real accountability, but the

ones that do work better and generally are able to avoid a more regulatory

heavy hand from Congress.”

Everyone talks about transparency, but what does it currently mean?

The Digital Advertising Alliance’s advertising option icon symbolizes notification, transparency and control

Grace Liau, senior vice president, VivaKi

“It’s all about notice. Be very transparent about what you do. Offer opt-outs.”

Giving users opt-out control is one type of value exchange for prime data

Paul Gunning, chief executive officer, Tribal DDB Worldwide

“We have to make consumer privacy control an easy

experience and easily explained.”

A central place for managing tracking data appeals to most consumers

Jules Polenetsky, director, Future of Privacy Forum

“We’re ready to be very intimate with services and technology and businesses when we trust that you’re gonna help us–including marketing to us in the

way we want to be marketed to.”

What makes internet users so positive about email ads, and how does that apply to privacy issues?

The value exchange between marketers and the public is most effective when the rewards are transparent, too

About one-third of internet users think privacy invasion is worth it for free things of value

Eric Picard, chief product officer, TRAFFIQ

“Companies that track consumers’ behavior

across the web without their consent, and

without providing them any recognizable value,

should stop.”

Getting value back makes consumers more likely to interact, and thereby share data, with companies

Offline loyalty programs can be a model for online ad targeting

Users find rewards and value to be incentives for sharing personal data

Conclusions

danah boyd, senior researcher, Microsoft Research

“The battle that is underway is not a battle

over the future of privacy and publicity.

It’s a battle over choice and informed consent.”

Chris Babel, chief executive officer, TRUSTe

“How do you make the jump from seeing self-regulation as a threat to ad targeting to viewing consumer choice as a

brand enhancer?”

Privacy Challenges Continue to Evolve. . . Making it Difficult to Optimize Your Marketing Programs

Marketers are increasing the use of customer data to optimize performanceStudies show 2X+ increase in conversion rates for targeted ads

Ad Targeting and other practices have caught the attention of Regulators and the MediaApple & Android respond to public outcry over location tracking

Consumer privacy concerns at an all time high94% of consumers worry about online privacy – and hold a range of players responsible

A range of other privacy challenges are emergingIndustry self-regulationTechnologyChannelsInternational

Privacy Management Ensures Compliance, Protects Brand, and Drives Engagement

2011 TRUSTe / Harris Interactive Consumer Privacy Research•Consumer more likely to click and buy when in control of Online Behavioral Advertising (OBA)

•Favorability to OBA increases significantly when offered control via the DAA Ad Choices Program

PRIVACY

PRIVACY

Customers

Can I trust you with my data?

Are you tracking me?

Customers

Can I trust you with my data?

Are you tracking me?

You need a Privacy Management Strategy!

DATA

DATA

Targeted AdsTargeted Ads

Mobile AppsMobile Apps

Cloud ServicesCloud Services

E-CommerceE-Commerce

EmailEmail

M-CommerceM-Commerce

Social MediaSocial Media

Web / Mobile SitesWeb / Mobile Sites

BusinessesBusinesses

PartnersPartners

PrivacyAudit

Monitoring & Certification

Consumer Tools

TRUSTe Overview

• Leader in Privacy Management Solutions• 14 years of self-regulatory experience• #1 consumer privacy brand

• Over 4,500 clients

• SMB through Fortune 100

• All Verticals

• Comprehensive privacy solutions for all

your online channels

• Web, Mobile, Ads, Cloud

www.truste.com | 888-878-7830

Perspectives on Digital Privacy—Marketers, Consumers, Feds

Questions & Answers

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Presented by:David HallermanPrincipal Analyst, eMarketer, Inc.