In their recent The Truth About Privacy study, Truth Central, a think tank of the McCann Worldgroup, found that data practices at Amazon are trusted, but similar practices at other major firms are not. The study concludes that the difference lies in the way Amazon communicates how they will use people’s data, making it very clear that the data will be employed specifically to create a better experience for each person.
At the heart of this amazing brand trust is the recommendation engine that Amazon pioneered and which still serves as a role model. The approach seems to work for consumers who perceive the use of their data as a service, and not a data use in the traditional sense.
It’s working for Amazon’s revenue and for its customers. According to an Advertising Age article, “There is a simple distinction in the consumer mind when it comes to these companies: Facebook and Google are seen to “own” my data, while Amazon “uses” my data.
“The enduring power of sentences like “customers who bought this item also bought” and “recommendations for you” has convinced people that their data is being consistently and simply used for their own good (even if it might be bad for the pocketbook!). On the other hand, when talking about Facebook, Twitter and Google, consumers use language like “taking” and “owning” my data. It’s not that their data is being used today in a way that upsets them; it’s the belief, rightly or wrongly, that it is being stored for some future, unspecified purpose,” the article states.
That seemingly simple distinction holds a lesson for all of us who are aiming to connect with customers in our data-driven society. Certainly it’s true that Amazon, as a marketplace, is in a different business than Google or Facebook or any non-transaction site. That could contribute to the difference in perceived value among consumers. Additionally, not every company out there can presume to be providing a true service through it’s marketing programs.
However, this research aligns with what we know in our own data streams – that the accuracy of data provided for a loyalty program is always significantly higher than that of data offered for marketing purposes. Consumers trust the brand more when there is a service aspect. We also see this truth in apps, where fitness or trading junkies will provide very detailed and daily information to an app by Nike or The Wall Street Journal because the reward is clear: This is a service that will help me in life.
According to the Truth Central study, Facebook and Google are seen to “own” my data, while Amazon “uses” my data. Transparency and positioning make a difference.
People like the value of the Amazon recommendation engine. “On the other hand,” the AdAge article states, “When talking about Facebook, Twitter and Google, consumers use language like “taking” and “owning” my data. It’s not that their data is being used today in a way that upsets them; it’s the belief, rightly or wrongly, that it is being stored for some future, unspecified purpose.”
Ignore the lesson of this study at your own brand peril. To help you assess your own program, DMA will be releasing new Ethical Business Guidelines in a few weeks (February 2014) which will be an excellent time to review all your data-driven marketing practices – and plan for improvement and course corrections this year.