The data bubble is surely waiting to burst

When consumers finally grasp the scale of personal information being harvested and what brands can do with it, things are going to get difficult.

For all the talk around GDPR, data scandals and breaches, there is still a lot about personal data that we, as consumers, don’t get. The fact that most of us are willing to click "accept" on online T&Cs without reading a single word says as much. 

And yet the data bubble is getting bigger every moment. Smartphone ownership is reaching saturation point and already accounts for 87% of mobile phone users in the UK, according to figures from Deloitte. On top of that, sales of smart speakers doubled between 2017 and 2018 in this country and Amazon reported sold millions more Echo devices over Christmas last year.

All of the truly smart features on these devices are, of course, driven by user data.

Given that marketers are so obsessed with data, that’s no surprise. But I suspect consumers haven’t yet grasped the scale of personal information being harvested and what brands can do with it. And when they do, things are going to get difficult. 

We are already seeing devices that seemingly know what their owners want before they know themselves. People are asking if Alexa "overheard" them talking about getting a car and if that’s why they were served an ad for a new vehicle – without realising that their phone probably tracked them walking past a dealership even if the location services function was turned off. Advances in low-power chips mean phones can harvest location data 24/7 without overtly draining the battery.

Meanwhile, Channel 4 has just launched Dynamic TV, which allows different creative to be served across smart TVs and other devices based on user data. And Facebook has repeatedly got into trouble for what some have called its "war on free will" – the echo chamber that simply reinforces our existing views, and all because we’re being served polarised information based on data preferences and "likes" we didn’t even know we were sharing. 

And with the increased use of decision trees across media platforms, we are going to face increasingly tailored messaging based on an individual user’s traits.

What we’re seeing is the dawn of platforms selling data that allows brands to delve further into behavioural economics and understand our behaviours better than we do. Spotify has already partnered Ancestry to create curated playlists based on our DNA – even our music choices are now being based on a hitherto unexplored level of personalisation.

And yet, according to Foresight Factory research, 53% of consumers say they’re unwilling to share any personal data with brands.

The backlash is surely coming. 

And, in some places, it’s already here. France’s data regulator, CNIL, has just fined Google €50m (£44m) for breaches of GDPR. That might just seem like a slap on the wrist to a company of that size, but I suspect it heralds more to come. That might mean other regulators getting in on the act or it might actually lead to consumers finally waking up to just how brands know about them.

This has the potential to be a minefield for marketers. People are likely to be infuriated if very personal information – for example, trips to a fertility clinic – is used to decide which ads they see.

This is why so many brands are looking to take the opt-in approach championed by GDPR. For instance, bar-finder app Dusk offers users a free drink in exchange for sharing personal data, while a raft of new companies are starting to allow consumers to monetise their personal data and obtain revenue by sharing it.

But, even in full adherence with GDPR, marketers would be wise to think carefully about how far they take personalisation. People might not be happy to know that everything they do – from walking past a shop to watching Netflix to posting a joke about Donald Trump – is being watched. 

At this year’s Consumer Electronics Show in Las Vegas, Apple made a big deal of its privacy credentials because, I suspect, it knows the bubble is about to burst. Other brands should be just as wary of what’s coming.

Lawrence Dodds is business director at UM London

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