Three-quarters of Australian internet users are more concerned about data security and privacy than receiving personalised services, such as advertising, a national consumer study by market research firm Honeycomb Strategy has revealed.
Nine in ten consumers want transparency around how their personal data is handled, 72 per cent said a company using their data for an undisclosed purpose was a ‘clear misuse’ of their information, and another 34 per cent said they felt using their data to send them personalised offers was ‘improper’.
Data security on social media continues to be a sticking point for users. The study found that brands on social media (72 per cent) and social media companies (70 per cent) are the least trusted with their personal data.
Media publications (65 per cent) are also poorly trusted, but have remained flat in the trust stakes while distrust of brands on social media grew by seven percentage points (see chart below).
Targeted ads were called out as a use of personal data that consumers do not want.
The findings of the study should pique the attention of advertisers that are investing more of their advertising dollars on social media platforms because of their ability to target consumers.
According to data from Statista, global advertising spend in social media platforms is predicted to rise by 11 per cent to $234 billion.
“It’s definitely a balancing exercise and businesses need to understand what data-sharing benefits will be useful to their specific audience. Our report shows that customers want to be rewarded with exclusive offers or sales for sharing their data and they want solid customer service, but they don’t want targeted ads or spam emails,” Honeycomb Strategy managing director John Bevitt said.
“It’s a fine line to tread, particularly where even personalised communication can be seen as misuse. Offering clear, opt-in choice for data collection, along with customisable data sharing options, will help customers feel more secure in sharing their personal information.
“It’s important for brands to communicate the tangible benefits of data sharing to ensure consumers see value and adopt ethical personalised practices across their operations.”
The Brands Beyond Breaches 2024 – A Brand Playbook for Privacy Protection report also shed light on the fall out of the data security breaches at Optus and Medibank.
It found that 36 per cent of customers had switched after the recent Optus and Medibank breaches, and another 30 per cent of Optus customers and 23 per cent of Medibank customers plan on ditching the providers (check out aggregated chart above).
Then the nationally representative sample data is extrapolated, about seven million Australians said they would never trust Optus again and 5 million won’t trust Medibank.
Bevitt said brands need to be transparent, proactive and offer extensive support to maintain consumer trust.
“In today’s world, a privacy breach isn’t just a tech issue – it’s a trust issue,” he said. “And to successfully navigate data privacy, brands need to be proactive, transparent, and prepared. Consumers are looking to partner with brands who prioritise their data privacy, are forward-thinking in how they use and handle information, and are customer-centric with their approach.
“Consumers immediately distrust brands who are misleading or not completely transparent with how they plan to use their data. Sticking to the status quo is not enough. To pull ahead, brands need to do better, by being aware of customer data needs.”
