Avoiding the Big Data Crisis: Managing Disclosure

By Tom Coyne

There’s no doubt that big data has become more than a buzzword and harbors tremendous potential to transform marketing and communications. Whether you are using data to email your customers or understand their needs and preferences at a minute level, the effect is the same: it is critical to keep in mind the reputational risks associated with its use. It is now clear why Google set “don’t be evil” as its guiding principle; they understood the power of data and how easily it could be used for purposes that may cross that ethical line.

Today, it’s not only brands that are pursuing big data capabilities to flex their marketing muscle; agencies are also getting into the business of big data. Witness the recently proposed $35.1 billion mega-merger of Omnicom and Publicis. The New York Times cites a statement from Publicis chief executive Maurice Lévy acknowledging “technological advancements and the rise of big data were primary reasons for the merger..

The writing is on the wall - to stay competitive, brands and agencies must leverage big data; if you’re not already doing so, it’s just a matter of time. The total big data market is on pace to exceed $47 billion by 2017, and two-thirds of companies will launch a big data project in the next 12 months.

However, while the rush is on to build the power of big data capabilities into marketing efforts, with this power comes a Pandora’s Box of consumer privacy concerns. According to global analyst firm Ovum, reported by GigaOM, only 14 percent of consumers surveyed worldwide believe Internet companies are honest about how they exploit personal consumer data from tracking online. So, while the business benefits of big data are clear to companies, the benefits are far less apparent to consumers, resulting in strong public reactions and undesirable consequences.

A case in point is Nordstrom’s recent foray into customer tracking. The retailer set out with the best intentions - to better understand its customers and optimize their shopping experience, but instead suffered negative blow back from consumers who felt the company had overstepped its bounds.

The program made news with a Seattle TV station reporting the following:

Some shoppers were unsettled to hear that venerable Seattle retailer Nordstrom was tracking customers in its stores via Wi-Fi signals from their smartphones - Nordstrom said the program ended in May, in part due to customer complaints received after the practice was made public.

Many consumers saw it as a violation of their privacy, as did these two shoppers who were quoted by the media:

“I don’t like people that I don’t know being able to know where I am,” said Seattle shopper Maryann Juvera. “It’s a little bit of a violation and it makes me feel distrusted,” added shopper Janine Cashin.

The moral of this story is that while you may be thinking primarily about how to harness the power of big data and operationalize it to the company’s benefit, it’s just as important to consider how you will convince consumers that it’s also in their interest.

As reputational defenders and stewards of your brand, CMOs and Chief Communications Officers must ask themselves this: how will our organization’s use of big data benefit consumers, either in improving the product, or improving customer service and experience? And, most critically, how are we going to communicate that benefit to consumers? If you have an answer to those questions, you’re on the right track to managing the reputational risk associated with big data.

Each industry will face its own unique challenges and, of course, will need a customized approach. There are, however, some universal steps to creating guardrails for your approach to big data that will protect your organization from being tagged big brother by consumers:

• Develop a Big Data Ethics Policy. The best way to manage such a controversial issue is from the top down. A company-wide policy that clearly and coherently details the organization’s position and approach can prevent reputational damage and possible privacy suits in the future. Be ready for difficult discussions on transparency and disclosure, as you will find that some of your existing practices may already be out-of-bounds and therefore hard for leadership to disclose. Look for opportunities to provide security: who has access to collected data? How do you store it? How long will you retain records? A complete perspective will help instantiate a genuine feeling of trust internally and externally.

• Educate Your Employees. From IT to marketing to the C-Suite, the issue of crossing the line can easily become an issue. Invest in the effort to educate and train your company to understand the responsibility of big data, and to keep Google’s principle of “don’t be evil” always top of mind. This is an opportunity to have every level of employee aware and engaged to support your policies.

• Permission Isn’t Always Enough. Never share data without getting the consumer’s permission. But even those who opt in to share their data may not be happy about how it’s being used. Make sure when you receive their permission you are clear about how and why it is important for providing a better service or product. You can put permission in your consumers' hands by allowing them to revoke access through data management preferences or using third-party registration options like Facebook and Twitter to enroll customers.

• Don’t Step Over the Line. Knowing a hotel guest’s pillow preference because you know what the customer bought at a retail store could easily be seen as intrusive and scary. On the other hand, remembering a request from a previous visit would be seen as surprisingly thoughtful and delightfully considerate. Don’t overstep from big data to big brother.

Big Data: The Next Chapter in Corporate Social Responsibility? With big data comes big responsibility; so why not put a real stamp of ownership on it by adding it to your corporate social responsibility strategy, and being transparent via your corporate social responsibility report? Leaning forward on this issue by making it a priority and being transparent could be just the thing to show consumers - and others - that your organization takes big data seriously, and that you have a strategy in place to use it wisely.