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Privacy, data ethics and the ‘seismic shift’ in consumer trust

By Contributor
Thu 4 Aug 2022

Article by Cheetah Digital senior solutions consultant Miles Toolin.

Aussie consumers have low levels of trust for advertising, but will pay more to purchase from a trusted brand, a new report from Cheetah Digital reveals.

What can marketers do to keep up with this seismic shift in consumer expectations where hyper-personalised relationships with brands are the only way forward? This question – and more – was unpacked in a recent Cheetah Digital-hosted webinar I was a part of, alongside an expert panel of guests, including: Arktic Fox founder and director Teresa Sperti and The Point of Loyalty CEO and founder Adam Posner.

Social media’s erosion of trust 

According to Cheetah Digital’s new Digital Consumer Trends Index, 67% of consumers in Australia do not trust the advertising they see on social media platforms. And more than half (63%) don’t trust social media platforms with their data.

Arktic Fox founder and director Teresa Sperti doesn’t find the results surprising at all. “Over time, there has been an erosion in the level of trust for social platforms,” she points out. “As a whole, this has led consumers to be increasingly wary about the information they provide on these platforms and how their data is being utilised.” 

She credits this erosion of trust to a couple of things. First, consumers are concerned about the social impact these platforms have on society; and secondly, consumers are worried about the approach that’s taken to harvest their data.

A recent Washington Post poll finds that, of all the large tech companies, social platforms like Facebook and Tiktok have the lowest level of consumer trust. In fact, 72% of Internet users rated their level of trust in Facebook as “not much” or “not at all” to responsibly handle their personal information and data on their Internet activity. And roughly six in 10 distrust TikTok and Instagram, while slight majorities distrust WhatsApp and YouTube.

This decline in trust mirrors Cheetah Digital’s findings to a T. “From a data privacy point of view, consumers’ expectations are changing broadly,” Sperti adds. “Consumers are less trusting of brands when it comes to providing data. They don’t believe brands can be trusted to protect personal data or utilise it effectively. As a result, we’re seeing a wave of greater skepticism from consumers as a whole.”

The Point of Loyalty CEO and founder Adam Posner agrees, pointing out the disruptive aspect of social ads. “The ads interrupt and are, oftentimes, irrelevant. But even more, they’re invasive. That aspect of social ads feels creepy, which works to erode consumer trust as well,” he says.

It’s ironic when you consider that social platforms emerged as a way to drive engagement with the audience. Since it’s moved into a sphere of profit over people, they’ve moved further from their reason for existence. 

“These days, it’s all about monetisation of the platforms. As they’ve increased the amount of advertising, consumers have become bombarded with all kinds of messages,” Sperti says. “It’s become hard for consumers to decipher what’s ‘fake news’, if a product is quality or if they’re potentially being taken for a ride.”

Posner brings up the idea that, on these platforms, the consumer is essentially the product. “It’s a real awakening,” he says. “Consumers are realising that if they’re the product through their data, then that means they’re valuable. So, naturally, they’ve become even more protective over their data.”

It seems what that’s creating is a data economy as a consumer. We’re going to see a shift to a value exchange where the platform says give me your data, and I’ll give you something to make it worth your while. That’s when social platforms will start regaining consumer trust.
Sperti adds, “Customer expectation is changing. The brands that are going to win moving ahead are those that have earned the right to effectively communicate, earned the right to be entrusted with data and are able to retain the right to utilise that data. And a lot of that comes back to control and consent.”

Meanwhile, Cheetah Digital’s report also shows that email still reigns supreme when it comes to driving sales, beating paid social and display advertising by up to 228%. “The statistics don’t lie. We’ve gone back to the future of marketing, in a sense. In light of all the creepy advertising, marketers are going back to the basics of building a brand. And that’s putting the spotlight back on email."

Email continues to be a trusted channel. At least 90% of consumer brands have emails and it’s widely accepted. So it’s a great foundation and super effective for marketers.

Creepy cookies, data ethics and the ‘comfort level’ of sharing personal data

The death of the third-party cookie is imminent. And for consumers, it won’t get here a moment too soon. According to Cheetah Digital’s report, a staggering 69% of Australian consumers think product recommendations from cookie tracking or similar is creepy, not cool. And while only around one in 10 (13%) Aussie consumers will miss cookies and think they make for a better experience; the number of marketers who will miss them is likely a lot more. 

And in a world that’s increasingly focused on automation, it can be challenging to bring in the human touch. But it’s essential because that’s what consumers demand. In fact, according to Cheetah Digital’s report, 52% of Australian consumers are willing to share personal data to feel like they are part of a community. And more than half (56%) of Australian consumers feel frustrated when they receive irrelevant content or offers.

“We’re increasingly moving into an era where data ethics is more than optional, it’s critical,” Sperti says. “That means brands must go further than simply focusing on privacy compliance. They have to put customers in the driver’s seat with their data. 

“That’s going to be a significant shift for brands after an era where they once mandated how customer data would be used. It’s not sexy, but brand reputation will be tied to how brands operate around data, and data ethics is going to be paramount.”

I couldn’t agree more. Data ethics plays heavily into data strategy as a whole too,” says Posner, before asking if anyone could remember the last time they actually told a brand what their preferences were. And for the most part, they couldn’t. 

And brands haven’t done a good job at educating consumers about the value of providing data. “The challenge has been that many brands have promised that if customers provide their data, then the brand will provide a great personalised and seamless experience,” Sperti asserts.

“That’s never come to fruition, though, because many brands haven’t worked out a way to execute it. As we move into an era without third-party cookies, people will begin to realise the value of brands having their data, such as those curated experiences.”

Posner adds that expectations bring responsibility. “Customers are saying, ‘I’m giving you all of my life with my data, use it to add to my life; don’t use it and abuse it.”

Loyalty, trust and the value exchange

The findings in Cheetah Digital’s report signal a new era of relationship marketing. 63% of consumers are willing to pay more to purchase from a trusted brand. Almost half (40%) of consumers in Australia are more likely to take part in loyalty programs compared to last year.

And 24% of consumers left their favourite brand because they didn’t feel valued as a customer. 

In today’s competitive landscape, brands are finding it increasingly challenging to maintain loyalty and build strong relationships, Sperti says. Even more, many marketing teams are pushed to do more with the same resources. It’s the perfect storm, keeping their relationship marketing strategies stagnant and transactional.

“Many are still very transactional and predominantly focused on delivering business outcomes rather than providing real value to the customer,” she points out. 

“Value exchange is so important. Yet it still feels like much of the activity that brands are driving to market is about what they want the customer to do and what outcomes they’re looking to achieve as opposed to truly understanding what it is that the customer wants.”

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