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For the longest time, people have never fully understood the trade-off between their data and the social platforms they use on a daily basis. Thanks to documentaries like The Social Dilemma, more and more people are now talking about this topic, and things are starting to change. More consumers are becoming aware of just how much of their personal data has been collected.
Before diving into where the industry is now and where it's heading, I think it's important for us to briefly look at where the industry came from.
A Brief History Of Consumer Data Collection
Data collection had humble beginnings. When we think of it today, we think of computers, algorithms and cookies. However, data started with a pencil and paper. Businesses like Starbucks used to keep their customers' information and favorite bean combinations written down in a filing cabinet.
In a 2018 MarTech article, Julia Stead — who was the VP of marketing at Invoca at the time — explained that data collection efforts started to ramp up at the beginning of the 1980s. Direct marketers wanted to take their businesses to the next level, and data-based personalization was their way of doing so.
Then, the arrival of the internet changed everything. Brands and market researchers realized that with the advent of the "information superhighway," there would be a constant stream of data coming in that they could collect, analyze and sell.
The Current Landscape Of Consumer Data
Consumer data ownership has reached a point that few people ever imagined it reaching. As a result, throughout the last decade, consumer data has become exponentially more valuable, and the tracking methods of social platforms have become exponentially more invasive. It's getting to the point where these social platforms know more about us than we do about ourselves. When platforms like Facebook, Twitter and YouTube all came out, we were fine with sharing our data with them because we appreciated these platforms being free to use.
Today, however, things are changing. Consumers are not only realizing that their data has value, but they're also becoming privy to the invasive nature in which their data is collected and deployed. Now, they're calling for that to be changed. A recent study by Cisco found that 86% of consumers "care about data privacy" and want more control, 79% are willing to spend time and money to protect data, and almost half of consumers "have switched companies or providers over their data policies or data sharing practices."
Not only are consumers influencing how brands look at data collection with their wallets, but governments are also getting involved. Whether it be the European Union's General Data Protection Regulation (GDPR) — which is the "toughest privacy and security law in the world" — or different laws being implemented at the state level, it's only going to get harder and harder for brands to collect and leverage consumer data.
What The Future Of Consumer Data Privacy Looks Like
As a result of consumers having a better understanding of their data's value and the ways in which it's captured, there are two ways I think this will play out:
1. No more tracking. With consumers and governments pushing for change in tech when it comes to data collection, we could see many brands change their business models to not rely on data as a revenue driver. For example, we could see social networks become pay-to-play, and as noted in Cisco's study, many consumers are open to paying for such changes.
2. Consumers are rewarded for their data. Some consumers — typically younger ones — are OK with their data being collected as long as there's a value exchange for it. As Barbara Herman puts it in this article from R/GA: "Perhaps Gen Z's response to the growing economy of a value exchange around data and privacy will elicit the same reaction from scandalized elders when they learn that this younger cohort's feelings about the loss of privacy thanks to data-mining and scraping by tech companies, brands, and marketers is: 'What's in it for me?'"
At the end of the day, it comes down to ownership and control. If consumers own their data and are in control of how it is used, then everyone is happy. If a consumer prefers that their information be private and not make their data available to brands, that is their choice. However, if that consumer is not as concerned about their privacy, then they also have the ability to make their data available in exchange for some type of value — the level of which they are willing to accept in exchange for their data is up to each individual consumer.
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