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GLOBAL 2016: Rising consumer concerns about data privacy pose existential brand threat

In today’s world, a creepy line can kill a great brand

by Lennart Håkansson
Executive Vice President
Cohn & Wolfe Sweden
Today brands are navigating an unknown minefield where consumer behaviors and attitudes constantly create new and hidden mines. One such mine is being planted and armed as we consider it. Here’s how you can spot it and perhaps avoid it blowing your brand to pieces.
It’s not just publically humiliating hacks, such as the exposing people using the Ashley Madison site to find dates outside their marriages. An intensifying focus and interest is also gaining momentum, not just around how enterprises protect personal data, but also how they use it.
Modern companies will probably have to adopt a “digital sustainability” approach to stay competitive when consumers become more and more aware of the value of their personal data and of how their personal data can be used to draw conclusions about them far beyond what they ever imagined sharing.
It used to be simple: make sure that no one can steal our data, but it’s getting more and more complicated. With the digitalization of businesses and society, a new dimension is very quickly becoming a major factor in brand value. If a brand failed to satisfy public scrutiny of how it treated customer data, personal data and what kind of analysis it does on behavior data, the reaction might cause irreparable brand damage.
This is a new and very volatile dimension for brands, since there are several surveys that indicate that consumers or citizens really do not care if (and to a large extent trust that) their personal information is handled properly. But that might very well change as more and more consumers come to realize the value of the personal information they give away for free and as hacker activity resulting in data leaks become more and more frequent.
Right now we might say: “So, the hackers got my name and address and perhaps my credit card number – big deal, I’ll just block my card and I’m fine.” But when a personal profile is leaked that reveals your sexual preferences, religious beliefs, political views and your “secret friends,” then you may not be fine.
But we are not there yet, even though Facebook is being heavily criticized for how it harvests the information we give away about ourselves to target ads, and alternative social platforms, such as Ello, are trying to operate without ads. My prediction is that three major dimensions will affect brand value and reputation:
First – keeping personal information safe and with only minimal and justified use.
The EU Commission is apparently very concerned about privacy and is this spring presenting a regulation on data privacy (General Data Protection Regulation – GDPR) that will affect every company in Europe and every company that does business with European consumers. This regulation will replace legislation in all the individual member countries and will come into effect two years after being presented (most probably spring 2018).
This regulation is very far reaching. It not only regulates how personal information is to be gathered, stored, handled and erased, but also requires that any major data intrusions or data leaks will have to be reported to the authorities. GDPR will most likely put demands on not just IT-systems but also on organization, products and even business models. And you only have two years to figure it out and adjust.
Second – Not overusing metadata to intrude on personal integrity (staying on the right side of the creepy line)
Big data analysis and analysis of unstructured information is getting more and more into our business reality and most of us have already been intrigued and well serviced by e-shop functions such as “Other persons that have bought what you just put in the cart have also bought this.” By combining technologies such as profiling and collective intelligence a company can predict your behavior, needs and personality to an extent never known before. This is a powerful tool that can be a great service, planner for better society and healthcare predictor that can save lives and suffering. But it’s also “under your skin” in terms of integrity.
Third – making use of automation and artificial intelligence in a responsible, accountable and transparent way.
Artificial Intelligence is nothing new, but there have been major leaps forward in recent years. Enterprises and society are, with more and more powerful IT-systems, moving towards automation and this time it’s beyond simple industrial processes. We will soon have automated decision processes. When we talk to a physician in the future we might very well be talking to an AI-system. When we sit in a future car we will probably surrender control to an AI-system that will control the vehicle through complex traffic situations. And most likely traffic will run smoother with less traffic incidents.
Future brands will have to watch these dimensions just as carefully as present brand watch dimensions such as “sustainability,” “equality,” “ecological” etc. to avoid running into an explosive mine and get your brand values blown to pieces. “Let sleeping dogs lie” is no longer a viable strategy.

Action Points to protect brands on privacy issues

  1. Get acquainted with General Data Protection Regulation being promulgated by the EC and understand in what ways it will affect your company and your brand.
  2. Clearly state for consumers how you handle their data (register, save, analyze and delete) over time.
  3. Create a model for explaining to consumers how you handle meta data and behavioral data and to what extent automatic decision making affects the consumer.

Cohn & Wolfe, a global communications agency, builds brands and corporate reputations through an uncompromising commitment to creativity. The agency’s strategic approach unearths fresh insights leading to communications solutions that deliver measurable success.