Data Use by Brands Is Misunderstood—and It’s Time for Brands to Speak Out

Consumers see distrust and intrusion, brands see improved consumer experiences

Even before the pandemic forced more of our day-to-day lives online, people were becoming more conscious of the use of their data. In addition to this, more critical voices are calling it an unnecessary intrusion that offers people little value in return.

That suspicion is at least partially the result of widespread confusion.

A Pew Research poll showed that 81% of Americans believe the potential risks of data collection by companies outweighed the benefits. Yet at the same time, 59% said they had little or no idea what companies do with the data they collect. A 2019 report on global attitudes about data use found that 78% of respondents believe that businesses benefit more than consumers. The public is not convinced it’s getting a fair deal.

These suspicions are largely unwarranted and spoil all participants in the marketplace—both the ethical and the unscrupulous—with the same brush. This perception threatens not only the system that keeps much of the internet free of charge but also the high-value relationships brands have established with their customers.

Advertising is the lifeblood of the internet, and the internet is increasingly the lifeblood of the advertising industry. This relationship is critical to brands, which spent more than $355 billion on digital advertising last year and are projected to spend $460 billion per year by 2024.

If we don’t educate the public, widespread confusion will remain.

It’s in our interest as marketers to explain how accountable data sharing is beneficial to the public. Brands have largely ceded this ground to the tech oligarchs, letting them define a conversation about our digital lives placing them at the center. If we don’t educate the public, widespread confusion will remain, and tech platforms will seize the relationships with our customers.

It’s fairness, responsibility and ethics

With scandals like Cambridge Analytica still influencing public perception, it’s understandable that most attention would focus on bad actors. This viewpoint has generated a narrative that data usage violates consumer privacy.

It’s the wrong frame. Using data to provide better products or services is not solely a matter of privacy. People every day provide information about themselves to other parties, often because they expect to get value in return. If people clearly see the link between information shared and the benefit provided, they are more confident their data will be used ethically.

The term “data-sharing” itself may be part of the problem, conjuring up unflattering yet inaccurate ideas about companies collecting data and sharing it freely with anyone. The reality is different. Accountable market participants keep data highly secure, work only with ethical organizations and only license data under specific and limited terms.

Much, if not most, of the information brands collect about their customers, particularly first-party data, is general in nature, freely given and supports the relationship. It’s third-party data collectors—platforms, cookies, data brokers or others—that are in question. And it’s this part of the data marketplace that matters most for competition, innovation and growth for the 99% of businesses that are not the Fortune 500.

The term “data-sharing” itself may be part of the problem, conjuring up unflattering yet inaccurate ideas.

The solution lies in practical privacy legislation that transparently defines standards for all players. Currently, laws allow tech companies a great deal of independence in how they use data behind their own walls. A common set of standards that makes collectors, users and sharers of data accountable for ethical data practices would put power back in the hands of people and weed out players that are either unscrupulous or that don’t add value to the ecosystem.

How to trust brands with your data

In short, we need to build public trust. We need to show how data-enabled advertising dramatically improves the consumer experience online, a case brands are best positioned to make because their customers are more inclined to trust them. (The same cannot be assumed to be true for the big tech platforms.)

How to effectively communicate this:

  • Use friendly messages, such as “This service is free because you shared important information with us. Thank you.”
  • Be transparent about how you use data. Communicate with an ongoing campaign rather than just a one-time task. Otherwise you risk letting third parties own the narrative.
  • Seize this opportunity to connect directly with customers. Explain what you stand for, the value you offer your customers and why you belong in their lives. That trusted relationship will encourage users to say yes when asked to opt in, ultimately giving them a better experience across the whole web.

It’s our job to make this clear to the public. Data-enabled advertising is good, and all parties get value from it: brands, people and platforms alike.