The Ethics of Big Data: Why Marketers Should Be Careful About Consumer Privacy
Big data is here and it is here to stay. Despite several controversies surrounding the application and apparent misuse of big data, organizations continue to tap into all sorts of customer information to gain valuable insights on customer behavior that will enable them to deliver the right message at the right time.
Big Data Benefits Businesses and Consumers Alike
It is a well-known fact that big data can help businesses in a variety of ways. Aside from helping businesses gain an in-depth understanding of their target customers’ behavior, having swaths of data can also be useful in assessing business’ performance, improving their efficiencies, and increasing their profit potential. What’s there not to love about it?
On the other end, big data also benefits consumers by improving products and services, providing enticing deals, enriching the overall customer experience, and making consumers’ lives better and easier.
Big Data Helps Provide Better Products
Big data can be used to improve existing products. Companies mine data to discover how consumers are using their products, how they feel about them, and what needs to be improved. The result? Better products that suit your needs and budget!
Improving Customer Experience
Companies use several ways to obtain the information they need to improve the overall customer experience. For example, they can collect customer feedback by monitoring various online channels (social media, online reviews, email surveys, community forums, brand mentions, etc.) or by offering a prize or a gift for sending one.
According to a survey conducted by Walker Information, Inc., a customer-experience consulting firm based in Indianapolis, customer experience is expected to overtake product and pricing as the key brand differentiator in 2020. It also indicates that 86% of buyers are willing to pay extra for better customer experience. Another study indicates that 1 in 3 customers will leave a brand after one unsatisfactory interaction, while 59% will walk away after several negative experiences.
Providing Better Deals
Why do you think you received an email coupon for something you want to buy for the past few months? Was it just coincidence or sheer luck? No. You can thank big data for it.
Making Lives Better and Easier
Big data can play an even bigger role than what the average person imagines. To illustrate, the healthcare industry uses big data to develop personalized care for developing new treatment options while the banking sector uses it to provide personalized banking solutions, prevent errors, and uncover illegal activities.
Big data is also extensively used in other industries, including:
Planning more efficient routes for commuters and decongesting traffic
Communications, Media, and Entertainment
Creating content for different target audiences and measuring content performance
Interpreting seismic or climate data and developing environmental protection measures
Big Data: By the Numbers
Big data is huge and is still getting bigger! Here are some interesting big data facts and figures every marketer needs to know.
- By 2022, businesses and consumers are expected to save USD 1 trillion a year through the internet of things (IoT). (Grazziti)
- Businesses using big data saw an 8% increase in profits and a 10% reduction in overall costs. (Entrepreneur)
- 99% of organizations believe that big data is essential for marketing success (Chicago Analytics Group) but unfortunately, 88% of all the data collected is not being used by companies. (Forrester Research)
- Data-driven organizations are 23 times more likely to acquire customers, 6 times more likely retain customers, and 19 times more likely to be profitable compared to their peers. (McKinsey Global Institute)
- 79% of enterprise executives agree that companies that do not embrace big data risk losing their competitive edge. (Accenture)
The Ethics of Big Data: Are We Using It Responsibly?
Big data plays a vital role in each of our lives, and has an especially useful application in mining and predicting customer behavior. Not surprisingly, countless organizations are adopting a “more is better” philosophy. The more data we have at our disposal, the better it would be for our bottom line. Sounds good, right? Well, not necessarily. As Peter Parker’s Uncle Ben once told him, with great power comes great responsibility, and big data is no exception.
While having tons of customer information may be incredibly advantageous for digital marketers and business owners, there is a growing concern regarding the ethical use of big data for marketing and advertising purposes. Are you using big data responsibly or are you abusing the power that is in your hands? If you’re not sure of your answer, it’s time to ask yourself these questions.
- How do you decide which information will help you achieve your marketing goals, and how do you know when you have collected enough of it?
- How do you draw the line between the ethical and unethical use of big data and how do you make sure you don’t cross it?
- Have you instituted measures to protect customer information and privacy?
As digital marketers, we are responsible for using the data we have collected in a way that will not exploit the vulnerabilities of our customers and unethically manipulate them into making decisions.
We need to draw the line between what is ethical and what is not and be accountable for our actions and decisions to prevent undesirable potential outcomes.
We don’t want the name of our companies being listed alongside names like Cambridge Analytica. Enough of that.
Taking Matters into Our Own Hands
To say that data mining all around the world elicits negative media attention is a grave understatement. The business community is busy collecting data that will help them sell their products and services, raising consumer concern along the way. People are especially worried about how organizations will use their personal identifiable data and if this information can somehow be used against them, especially if it happens to fall into the wrong hands, or at the very least, to unsanctioned organizations who have obtained their information from third-party sources.
Thankfully, the European Union and the United States have laid down the foundations of data privacy regulations through the General Data Protection Requirements (GDPR) and the California Consumer Privacy Act (CCPA). These laws aim to give individuals control over how their information is being used by requiring businesses to implement new policies and procedures that will ensure the privacy and security of personal information.
Google and Apple are also adding options to protect the privacy of their users. Google gives its users ample control over their account by allowing them to set their desired privacy settings while Apple allows its users to download all the personal information collected by the company.
As marketers, we can also do something to address the issue. We can help put ethics back into our marketing practices and play our part as responsible guardians of data. How do we do that? Here are some practical and doable ideas on how you can use big data while upholding customer information and privacy.
Provide your customers with maximum transparency and choice. Your privacy policies should clearly state how you use and share customer information.
Instead of mining additional data that may potentially expose individual customer identities and behavior, marketers should aggregate data and create algorithms based on that data to identify patterns. When you are making decisions based on groups rather than individuals, it’s less invasive for any one part of the group.
Adjust Your KPIs
Success can be measured in a number of ways, not just by acquisition, engagement, and conversion alone. Think outside the box and shift your focus toward achieving goals that are geared toward promoting a healthier brand experience for your customers, stakeholders, and the community.
Champion the Cause
Encourage your organization to review current business practices to ensure compliance with GDPR principles. Even if you operate outside the EU, there is a great chance that a similar law may eventually be imposed in your region, so why not lay down the foundations for ethical business practices right now? Aside from upholding your moral obligation for your customers and the community, championing the cause will improve your brand image. It is clearly a win-win situation for everyone involved.
Partner up With Companies That Share Your Ideals
You can be defined by the company you keep, so choose your partners accordingly. If you want to advocate the privacy and security of customer information, don’t work with companies that may compromise these sensitive data.
Secure Your Network
Our customers entrust us with their private information, so it is our responsibility to keep their data safe. Human data is a precious commodity and some people will do everything to get it from you. Don’t let that happen. Preventing data breaches, whether via social engineering attacks or sophisticated cyberattacks, is key to avoiding harm to the people whose data we have.
Big data isn’t going anywhere. It’s simply too useful to do away with. But marketers need to be confident that we’re using our data to be a net positive in the world, rather than a harmful force. By being ethical and responsible with the data in our possession, we can ensure that the world of big data will work for everyone.