In game theory, a zero-sum game is a situation in which each participant’s gain or loss is mirrored by the equal losses or gains of the other participants. Traditionally, the notion of consumer privacy is characterized as a zero-sum game; the more privacy afforded to consumers, the fewer data marketers have to leverage. Conversely, the richer the data set on consumers, the fewer privacy protections consumers can expect from marketers. However, opportunities for marketers do hide behind the current consumer privacy paradigm.
Consumers concerned about their online privacy prompted legislators world-wide to investigate new protections guiding the collection, sharing, and leveraging of personal data. In the United States, the California Consumer Privacy Act (CCPA) has taken the lead by requiring businesses to inform consumers what data they have collected about them and provide a way to purge the date when requested. The customer engagement platform Braze released a study earlier in 2020 suggest that as companies begin to comply with CCPA, they identified new business opportunities associated with providing more privacy controls.
According to the study, nearly all U.S. adults (98%) say that protecting their data is very important, with 98% of parents reporting that it’s important to them that their children’s data is kept private. This is important because consumers have been making behavioral changes prior to any legislation passing. An overwhelming majority (84%) of U.S. adults have decided against engaging with a company because it needed their personal information. And 71% did so more than once—indicating that it is a pattern; consumers will not engage if they feel they need to provide too much of their personal information. Privacy concerns are also causing consumers to walk away from business relationships. Three-quarters (75%) of adults have stopped engaging with a company out of concern for how they might use personal data.
This is not to say that consumers do recognize their data has value and are willing to exchange it for compensation. Nearly all (94%) marketing executives surveyed were confident that they can gain competitive advantages in the marketplace by proactively implementing changes before they become mandatory. One obvious change is to directly compensate consumers. Sixty percent of consumers reported to be willing to share their private data for cash, while 26% would share for product incentives and 21% would share for free content. Marketers are less excited about cash expenditures. Less than a third (31%) of marketing executives feel that consumers should receive cash in exchange for their personal data. They prefer to limit compensation in the form of better shopping recommendations (51%), streaming subscriptions (50%), and product incentives (50%).
Despite the compensation disconnect, this is an example of how businesses can strengthen the relationship between their brand and their audiences by providing more consumer privacy protections. The folks at the CDP Institute think this is important enough of an opportunity to add Privacy to the “4 Ps of the Marketing Mix.”