Consensus Advisors: Will the NSA Scandal Make Consumers Unwilling to Share Personal Info?

Discussion
Jun 24, 2013

Through a special arrangement, presented here for discussion is a summary of a current article from Consensus Advisors, a boutique investment and advisory firm specializing in the retail industry.

"You have zero privacy anyway. Get over it!"

That line was famously delivered 14 years ago by Scott McNealy, CEO of Sun Microsystems in the earlier days of the battle over consumer privacy and the internet. But, the revelations by Edward Snowden have added a sinister take on the issue and also opened up an overdue discussion about privacy in the digital age and the potential for abuse.

The concept of "Big Data" runs through almost everything we brush up against today, from international politics and dealing with terrorism to domestic law enforcement and on down to the more humble concerns such as marketing to consumers. As consumers in the 21st century, we leave a digital trail through smartphone app usage, internet browsing and electronic purchases. The mere use of social networks like Facebook opens a window onto who you are, what you like and, more importantly to businesses, what you have the potential to like.

Building a digital trail can be a boon—you might receive truly useful product suggestions from Amazon as you navigate its site or find your Google searches subtly directed in such a way as to make them better and more efficient. While it can be almost creepy, like targeted banner ads popping up on totally unrelated websites are reflective of that one website you only looked at once, generally, the personal customization of your digital experience is seen as a feature and not a bug.

For retailers, the quicker they discern your desires and then satisfy them, the more successful they will be. And even though it may not be wise, at some level we trust that the retailers we frequent, no matter the sales channel, will use the information they gather about us in a responsible manner and not share it with every entity that comes knocking without taking the trouble to get a warrant.

The debate on the NSA's ‘eye in the sky' is a healthy one. However, I do know that it is too difficult for the average consumer to effectively manage their digital trail, because the pace of technological change is simply too great and the means of collection are so ubiquitous as to be imperceptible.

It can't be helped—data is the byproduct of daily life and, when properly culled, it is incredibly useful to governments and businesses alike. The drive to collect it is not going to go away, even if Congress passes new laws.  Wherever you go, whatever you do, whatever you look at, desire, think about, express or post to a blog, you'd do well to remember, the eye in the sky is looking at you.

You might as well have a nice day, the world will know, one way, or another.

Will revelations about NSA surveillance techniques affect consumer willingness to share data with businesses? Do you suspect consumers will be more or less comfortable with marketing based on their digital trail?

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19 Comments on "Consensus Advisors: Will the NSA Scandal Make Consumers Unwilling to Share Personal Info?"

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Cathy Hotka
BrainTrust

Of all the revelations over the past few weeks, perhaps the most shocking is that Americans apparently don’t care that Uncle Sam is combing through their communications records. At first glance, at least, it would appear that everyone’s reaction is a big collective shrug…but many of us who lived through the sixties are reconsidering our online profiles.

Bryan Pearson
BrainTrust

I think what worries consumers the most is their lack of control in the process, especially when combined with the fact that they don’t really know what companies are doing with the data.

According to LoyaltyOne’s own research from 2012, only 42 percent of 2,000 American and Canadian consumers said they trust businesses. Of them, 79 percent said they are concerned about how much of their personal information is being held by others, and 77 percent are worried companies share their information without consent. Of consumers who distrust companies, those figures are 92 percent and 87 percent, respectively.

But the most troubling figure to me is that among all consumers, 78 percent said they do not feel they receive any benefit from sharing their personal information. That is up from 74 percent in 2011.

You can download the complete report at http://www.loyalty.com.

Dr. Stephen Needel
BrainTrust

I’m predicting a backlash, especially when we figure out that our information benefits the collector, not us so much.

Ralph Jacobson
BrainTrust

No long-term effects with this at all. Consumers will gladly give all their information if you make the offer compelling enough! Remember the dance club in Spain that offered to implant personal data RFID chips in patron shoulders if they wanted priority access to the club?

Paula Rosenblum
BrainTrust
I’m with Cathy Hotka, and we’ve discussed this at length. It’s one thing to re-target me with creepy and annoying ads. That’s intrusive, but essentially harmless. I don’t worry about that too much. But the notion that the government is capturing who I’ve called, the web sites I’ve visited, and (ultimately) where I’ve gone is really disconcerting. Let’s be clear. If the NSA was any good at using this Big Data, the Marathon bombing would never have happened. And even without the Big Data, if the NSA was any good at “reading the tea leaves” 9/11 wouldn’t have happened either. However, when you combine this data with the propensity to target “certain groups” like the IRS did, it becomes very problematic. I know in the J Edgar era, the FBI had files on half my generation. And he too had very specific targets. The biggest “victims” in all of this is not going to be retailers, it’s going to be CLOUD-computing companies. When data streams are being read, and when the government can demand data from companies like Microsoft and Yahoo, it gives one pause for thought. Why would I put my corporate data out in the cloud? My personal… Read more »
Ken Lonyai
BrainTrust

No—overall, there will be no real effect in the long run. Just as all the Facebook data/privacy policy revelations/changes saw moments of outrage and users abandoning ship, the impact of this over time will amount to nothing. There was also the Occupy Wall Street fervor and then continuous data breach stories, still, the public overall is willing to accept the loss of privacy and imposition on their rights by big entities, for the convenience shared data brings them.

While there is a cerebral debate over privacy and constitutional rights going on, cash registers and “buy now” buttons keep on keepin’ on.

Seth McLaughlin
Guest
Seth McLaughlin
3 years 11 months ago

I think we’ll see different behaviors from different consumer segments. Some consumers will become more vigilant with their privacy (i.e. Baby Boomers), and some consumers will not worry (i.e. Millennials).

It appears Europe is in front of the U.S. on legislation that protects consumer privacy. High profile cases like the recent NSA disclosures will likely speed the progress of privacy protections.

Joan Treistman
BrainTrust

The revelations and reporting about NSA surveillance practices will definitely get more people realizing the enormity of personal data that is out there for marketers as well as the government. Consumers don’t realize there are many occasions when they didn’t give their okay for personal data to be collected. Instead there may have been an opportunity to opt out, but it might have been vague or opaque and they just didn’t realize there was a choice, much less the consequences.

There’s a huge difference between being watched and being intentionally manipulated. And I believe as the dialog shifts to how much personal data is available to marketers and how marketers use consumers’ personal data to influence their subsequent buying decisions there will be outrage.

We keep talking about transparency. There’s no escape for consumers and citizens when it comes to leaving a digital trail. However, marketers must prepare themselves for how consumers will react when they become aware of what is being done with the data they collect and use. I think this is where the discussion on surveillance will lead to vocal protest.

Gene Detroyer
BrainTrust

The difference between Google, Facebook, Amazon, et. al. collecting personal data and the NSA doing so is the Google, Facebook, Amazon, et. al. can’t arrest and prosecute you.

There are plenty of instances of the government mishandling information to the detriment of innocent citizens. Just think about the stories of something as simple as the “no-fly list’. Be assured, it gets a lot worse than that.

Citizens, stop complaining about privacy intrusions from companies that you’re willing play with and start worrying about privacy intrusions from a government that doesn’t ask your permission.

Ed Rosenbaum
BrainTrust

As a business owner and an everyday citizen, I am concerned on both fronts. Not that I agree in any way whatsoever in what Mr. Snowden did. I am concerned that my freedom of speech and possibly my business information is capable of being violated. Paula said she was “out of the dangerous demographics.” I too am out of that window. But my business is in the clouds. I want and need to know it is secure. I now do not have that feeling of security.

Roger Saunders
BrainTrust

Whether government reflects or leads the way in terms of privacy isn’t the issue of the day for consumers. The Snowden and NSA techniques are overreach of “Big Brother” that Orwell shared with us in his 1949 book entitled 1984. The consumer will see that as part of the “spy game” the world has in place.

However, privacy in regards to personal information is a significant issue for a good portion of the population. That concern will spill over into marketing topics. If marketers get egg on their face in a manner similar to the incompetence of the NSA, the sharks will swim, and nip at the heels of their marketing and financial programs.

Integrity and common sense is called for from marketers on these privacy issues. We seem to have recognized and accepted the fact that government lacks these characteristics.

David Livingston
Guest
3 years 11 months ago

I think most Americans realize there is nothing they can do about it. If I have someone’s name and a general idea of where they live, I can obtain their detailed life history by the end of the day. If I can do that, anyone can.

Lee Kent
BrainTrust

There have always been ways to get information if information is wanted, however, with Big Data around, we can at least be comforted in knowing that the data is actually right. I know, I know…but what I’m saying is that the data that is ‘out there’ is the real thing, as long as it is not interpreted incorrectly.

Therein lies the problem to me. When the data is not interpreted correctly and you are found to be receiving calls from people on terrorist lists, unbeknownst to you, what if any recourse is there?

I do not think we care so much about marketing information or the creepy banner ads, etc. It all comes down to what happens when I am singled out for something. What is my protection or assurance then?

Lee Peterson
BrainTrust

Most consumers we talked to about this were ambivalent. The attitude was along the lines of, “I have nothing to hide, they’re going to be bored.” And it’s not like we haven’t been sharing data for years now, so, if you DO have something to hide, you’ve probably already been arrested!

My instinct on this topic is that although the ‘it’s no big deal’ mentality has been expressed, you’re definitely going to think about it a little more the next time some on-liner asks you for something. Maybe they should pay us for giving information up…that would change the game.

Carlos Arambula
BrainTrust

The NSA issue was eavesdropping. I believe consumers know the difference and have a comfort level on the type of information they want to release to businesses.

Craig Sundstrom
Guest

Short answer: no; longer answer: the scenario is exactly bassackwards. The revelations didn’t make people less willing to share data, but instead a long history of sharing data made the revelations unexciting (to most of us at least).

The unasked (here) question: SHOULD people be less comfortable? For the clueless types who post videos of their illegal/cringe inducing antics on YouTube, the answer is likely “yes.” For the rest of us, it’s hard to say, since few—if any—of us know exactly what’s collected or how it’s used (or misused). But I find the “get over it!” attitude discomforting, whether it’s the glib remark of Mr. McNealy, or the more elaborated observations of Mr. Scotti.

Li McClelland
Guest
Li McClelland
3 years 11 months ago

I’ve been doing some informal (as opposed to scientific) research on this, particularly among younger people, as the issue of digital privacy has been of great interest to me both personally and professionally for quite some time. Obviously it is too early to form conclusions about any lasting effects, but anecdotally I will posit that the age and clear passion of Snowdon (he just turned 30) has made the issue more real and attention grabbing and thought provoking to Millennials that if he were, say, some boring 60 year old balding grey hair doing the leaking.

James Tenser
BrainTrust

I may be a silly optimist, but I harbor hopes that the present controversy over Snowden’s leaks and NSA surveillance will lead to a more open public policy debate that will ultimately benefit us all.

The accumulation of personal and corporate data in online servers may well be an irreversible trend. The web is fully embedded in our society. Manipulation of behavioral information by marketers and government agencies is probably inevitable. It is in the public interest to recognize this and set some boundaries.

The number one issue of concern, I think, is the asymmetry of data. We should be automatically suspicious of any policy of secrecy. I don’t believe there is a natural right to privacy, nor is it a practical standard, but I do believe we all should have a basic right to know exactly what they know about us.

What would readers think of a new constitutional amendment designed to ensure transparency of big data practices by government and private entities? Call it the Data Visibility and Reciprocity Amendment, or “I’m watchin’ you watchin’ me.”

gordon arnold
Guest
One of the best kept “out in the open” secrets in the Information Technology ( IT ) industry is exactly how vulnerable the average consumer’s personal information is. The same is true for legitimate corporations and governments. When they are informed about their information security, the descriptions of security methods and measures are often put forth so as to create the impression that all is well for them and their privacy. As we see in the example disclosed in this discussion, stolen information can come from trusted corporate employees taking easily concealed documents. The ransom from the networks of illegal off-shore organizations and or governments is very high and there is no shortage of takers. This type of theft is accountable for almost all of the stolen vital information. The odds of any American citizen never being effected by identity theft are almost nil. And we as a society of individuals are losing $ billions of dollars to this controllable mess. The two most common methods of removing information are e-mailing files and copying files to a disk or removable drive. Eliminating these possibilities in concert with the use of live monitored VPNs and very thin clients would greatly reduce… Read more »
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