Consumers Want a Discount If Marketers Are Using Info for AI

As the role of artificial intelligence grows, it’s probably no surprise that Americans’ wariness about the technology is growing just as quickly—if not faster. Consider the results of a handful of studies and surveys released this summer alone. CNBC’s All-America Economic Survey reported that 69% of Americans suffer from “AI anxiety.” Two workers out of 5 now worry that AI will take away their jobs, according to the American Psychological Association. A Gallup poll revealed that 79% of Americans don’t trust corporations to use AI responsibly. And according to research published by the think tank Artificial Intelligence Policy Institute, 76% believe that “artificial intelligence could eventually pose a threat to the existence of the human race.” Now comes another body of research that delves into Americans’ feelings about AI’s role in advertising. The upshot: They’re not exactly thrilled about that, either—but most of them will warm to it if they get something tangible in return. That uneasy feeling In August, customer experience consultancy UserTesting reached out to 2,000 adult consumers and discovered that suspicion over AI prevails, especially when it comes to its use in targeted advertising: 70% of respondents expressed concerns over their privacy, 72% fretted over how their personal data was being used—and 56% felt anxious about it being used specifically by marketers. Anybody that is wary of AI utilizing their personal data is blissfully ignorant of the fact that has already been happening.Ryan Coyne, CEO, Starboard Of course, marketers have depended on data for decades. Dry-goods merchant Aaron Montgomery Ward developed a mailing list of prospective customers to send out his first catalog in 1872. Postal mailings based on data about past shopping patterns emerged in the 1980s. A decade later, the nascent internet allowed retailers to focus on likely shoppers by crunching data drawn from where they clicked online—a strategy that coalesced in 2007 with Facebook Ads. These activities didn’t rouse fears on the scale we see now, so why is AI different? “AI does really great with processing large amounts of data and finding patterns in it that humans just are not going to—this is where people get a little bit freaked out,” said Lija Hogan, principal, enterprise research strategy for UserTesting. Consumers' anxiety over AI doesn't have as much to do with data, per se, Hogan explained, as it does with AI’s ability to make predictive judgments based on that data. AI Watch: Weekly Updates on the Latest Generative AI News Yet here’s where things take a curious turn. Despite consumers’ prevailing concerns, UserTesting’s research found that shoppers will readily hand over personal data so long as they get something back for it. The vast majority of shoppers in the survey—87%—said they’d disclose personal information “if it saves them money.” Getting to know you What sort of data? More than half (52%) said they’d share their birthday, 43% will share the name of a spouse, and more than a third (34%) will even hand over their Social Security number. Some bits of information evidently felt too personal to part with—allergies, for instance. Fewer than a quarter of respondents (24%) said they’d be comfortable divulging that medical condition, and presumably the existence of similar maladies. And yet the lure of a bargain was still strong enough that 36% of respondents admitted that they’d hand over the names of their kids if they were offered a discount while shopping. But if 72% of consumers feel anxious about how their personal data is being used, how can those fears be squared with the 87% of people who’d trade personal information for, in essence, a coupon? Hogan chalks this dichotomy up to two factors. First, many American households could genuinely use a discount right now. According to Bureau of Labor Statistics data released on Sept. 13, the consumer price index has risen 3.7% over the last 12 months. Wages have stagnated over the same period, however, reducing those households’ real spending power. In a survey from Monster.com released earlier this year, 81% of workers said that their paychecks have not kept up with the rising cost of living, and 75% said they were “more mindful” of the money they’re spending. “Inflation matters,” Hogan said, pointing out that a 10% discount on a purchase may not be incentive enough for many of us to surrender personal data—“but for those for whom it really does matter, it matters.” Second, Hogan suggested that ecommerce itself has normalized the practice of disclosing personal information—an address and a cell phone number at minimum. Brands have “started to train people to disclose certain information in order to just transact,” she said. “And that extends to when we're being marketed to.” The exercise of power Consumers’ nervousness over AI and personal data also suggests that the public’s understanding of technology lags the technology itself. The fact is that whatever consumers are afraid AI might do, it’s probably been doing already. “Anybody that is wary of artificial intelligence utilizing their personal data for someone else's benefit is blissfully ignorant of the fact that that has already been happening,” said Ryan Coyne, CEO of digital media company Starboard. “If you have participated in any transaction online—ever—all of your data is now for sale,” he continued. “It does not matter who you are, what you bought, where you're from or anything about you: You are 100% for sale online. I could buy everything about you in one second—and that was the truth in 2015.” Resetting the Client-Agency Relationship to Benefit Future Leaders Even so, as AI puts increasingly powerful tools in the hands of marketers, Hogan suggested that brands might want to consider being more transparent about how they wield that power. If UserTesting’s study makes clear that consumers are uncomfortable about AI-driven marketing, it follows that the brand that’s upfront about its methods might win something that’s just as important as consumers’ business—their trust. “As we're in this space where people really don't know what's coming next, we have to deepen the conversations that we're having as brands, as designers, as product managers, marketers, to understand what people feel comfortable with,” Hogan said. “How do we disclose what it is that technology is capable of delivering in a way that's approachable and understandable for people—and do it in a way that engenders trust and confidence? There's an ethical responsibility that we have as creators of these technologies and strategies to say, how should we proceed and do it in a way that is guided by feedback from real people?”

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Americans Don't Like Advertisers Using AI on Them—Unless They Get a Good Deal Out of It

New survey illustrates mixed feelings when intelligent machines do the marketing

Robert Klara

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Robert Klara