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CONSUMERLAB
Consumer
privacy in
an online
world
An Ericsson Consumer Insight Summary Report,
February 2012
introduction
Ericsson ConsumerLab has done
research during the past year on consumer awareness, attitudes and behavior when it comes to privacy, trust and
security when using the internet. The
report Consumer Privacy in an Online
World, covering internet users in US,
India, UK, Germany and Sweden, looks
into the challenges that internet poses
to consumers’ privacy and seeks to
understand people’s expectations of
over-the-top services, internet players
and operators in
this regard.
Point of departure for the report is the
continuous evolution of social media.
More and more people are sharing personal information on social networking
sites on a daily basis. A driving force
behind this development is the smartphone gaining popularity worldwide,
making sharing even more convenient
and accessible wherever you are. In the
long term – given that in the networked
society there will be more than 50
billion connected and communicating
devices – privacy will become increasingly important.
trust
On an individual level trust
is a prerequisite for business
success in the online space
According to the International Data
Corporation (IDC), there will be an
estimated 35 zettabytes (35x1021 –
35 followed by 21 zeroes bytes) of
digital records worldwide 2020. This
suggests that it will become even more
important for people to safeguard their
privacy. But although awareness is
increasing, conclusions from the study
which forms a basis for this report
clearly shows consumers still lack a
sense of urgency.
privacy
Privacy harm is caused
when producers misuse
consumers’ personal information, either by own fault
or if third parties somehow
manage to breach the
safeguards
sharing
The act of sharing can
primarily be defined as
the individual’s allowing of
selected others to access
their personal information
Ericsson ConsumerLab –
The Voice of the Consumer
Ericsson ConsumerLab is a knowledge-based organization,
our main offering is insight. We have more than 15 years’
experience in consumer research, which involves studying
people’s values and behaviors, including the way they act and
think about ICT products and services. We provide consumer
insight to influence strategy, marketing and product management within the Ericsson Group. Our knowledge helps operators develop attractive revenue-generating services.
We gain our knowledge through a global research program
based on annual interviews with 100,000 individuals in more
than 40 countries and 10 megacities – statistically representing the views of 1.1 billion people. We use both quantitative
and qualitative research, and spend hundreds of hours on
in-depth interviews and focus groups with consumers
from different cultures. Our research includes general
market and consumer trends and in-depth insights into
specific areas.
To be close to the market and consumers, Ericsson
ConsumerLab has team members in most of Ericsson’s
market regions. Being part of the Ericsson Group gives us
a thorough understanding of the ICT market and business
models. This broad knowledge is unique and is the basis
for our credibility and integrity. We see the big picture,
understand where the individual fits in, and know what this
means for future trends and services.
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
www.ericsson.com/consumerlab
2
GROWING
AWARENESS OF
PRIVACY CONCERN
Sharing has become a daily habit
In a connected world more and more
data will be shared online. Consumers are already sharing tremendous
amounts about themselves on social networking sites like Facebook,
Google+ and Twitter, as well as on local
sites such as Orkut in India. As much
as 63 percent in the survey say they
log on to a social networking site on a
daily basis. Many spend hours every
day connected to others through social
networks online.
It is fair to say sharing has become
a daily habit – and that it is social
networking sites that have paved the
way. While new technology is pushing
the envelope, consumers are quickly
adapting and adopting these new and
easy ways of displaying themselves
online. And it is not only people who
normally consider themselves to be
outspoken about their private lives
out in the real world who are sharing
intimate details on the internet. Individuals are becoming more and more
open and are inviting people to events
which they would not have invited them
to before the era of social networking.
People are saying they are being more
open and sharing more information
now than they would have ever considered or expected just a couple of years
ago. Social networking sites are evolving to be more than just a fun pastime
– they are becoming tools people use
to shape their own identity.
Demand for privacy services
will increase
In the light of these new habits of
sharing – how important is privacy for
consumers? On the contrary of what
one might expect, experts say that
nothing indicates that consumers’
wish for privacy is diminishing. Ryan
Calo, director of the Consumer Privacy
Project at the Stanford Center for
Internet & Society, argue that experience is everything when it comes to
trust and privacy concern. In the past,
our privacy was “protected” by default,
since it was complicated in practice
to obtain information on one another.
Today, when there is tons of information about us easy accessible online,
privacy concerns will surge if we land
up in situations in which our privacy is
threatened. According to Ryan Calo,
better legal protection for privacy is
needed, but he is also convinced there
is a market for commercial services
that protect consumers. He sees a
growing demand in this area.
“People will pay more for
something if they can buy
it from a site that they perceive has better privacy. So
you can use the market to
compete over these things.”
Time spent on social networking sites
>3 h/day
Several times/week
1-3 h/day
Once/week
<1 h/day
More rarely
Never
Base: 3818 internet users in US, UK, Germany, Sweden & India.
Ryan Calo primarily works with a concept
entitled “privacy by design”, the idea that
applications, websites, etc., should be
designed in a way that consumers understand what they are doing – and how
their personal information will be used.
— Ryan Calo
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
3
Social media usage
increases awareness
When asked a direct question – all
consumers say privacy is important.
But when comparing with other issues
and needs a slightly different picture
emerges. A majority of the consumers
in the survey are conscious about privacy issues online – but only a minority
is very concerned.
However, among younger respondents
– who also are on social networking
sites the most – the number is much
higher. More than 4 out of 5 between
the ages of 20 and 24 say they worry a
lot about their privacy when using the
internet. This suggests the usage of social networking sites in fact increases
privacy concerns.
Consumers who are using location
based services to check in worry more
about their privacy online than people
who don’t use these features. Sharing
your location with your smartphone
thus increases the awareness of possible privacy harm among its users.
At the same time a lot of people feel
uncomfortable about sharing their current whereabouts with others in their
social network.
Privacy online not a key
concern – yet
Even though the awareness of online
companies using consumer data for
commercial purposes is growing, there
still is little change in behavior when it
comes to sharing information online.
Consumers trust the system and con-
venience prevails as long as no harm
on a personal level is inflicted.
Despite the fact that consumers are
aware of threats and issues, they
either don’t think they will get in jeopardy themselves, or they simply think
the benefits of the internet outweighs
the risks of being subjected to
privacy harm.
The awareness of privacy issues is
increasing, but there is still no sense
of immediate urgency.
Attitudes towards different statements on a scale from 1 to 7
where 1 means “I don’t agree at all” and 7 means “I agree completely”
I don’t agree (1–2)
Middle (3–5)
I very much agree (6–7)
My family is more important to me than my career
To me, it is important to stay up-to-date with news and headlines
It’s important to me to always be reachable wherever I am
To me it’s important to be able to access the Internet wherever I am
I worry about my privacy when using the Internet
Even when I can afford them, I’m not willing to pay much for new technical gadgets or services
I spend a lot of time organizing and planning my and my family’s activities
I’m constantly on the lookout for the most high-tech products avaliable
Carrying the latest model of moblie phone gives a good impression to others
The design of a mobile phone is more important than its features
0%
100%
Base: 3818 internet users in US, UK, Germany, Sweden & India.
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
4
not connecting
the dots
People claim to be aware that companies have the right to use their
information – no less than 80 percent
think online companies can access
and use their personal data for commercial purposes. Yet they fail to make
the connection between their personal
information, for example in emails, and
the targeted ads appearing on their
screens. As many as 54 percent in the
survey answered they would share
less if they received personalized ads
about something they discussed in an
email. This is curious considering that
for example Gmail automatically scans
emails to add context-sensitive advertisements to them.
Joseph Turow, professor of Communication at the University of Pennsylvania’s Annenberg School of Communication, expresses it as consumers
not connecting the dots. They do not
understand that their personal information is being used in a way that they
themselves find unacceptable.
He argue people in general are not
aware of what data mining means,
whereby a company can get a complete picture of you from all of the fragmented pieces that are out there on the
web and use it, for example, to tailor
ads to fit your profile on a social
networking site.
“People know they’re
being followed, but they
really don’t understand what
data mining is. They don’t
understand the links that
take place, the connections
of the dots and all of that.
And when that is brought
to their attention… They
get concerned.”
— Joseph Turow
Do you think the
following companies
can access and use
your personal data for
commercial or other
purposes?
Share of respondents who say
they know or believe companies can do this.
Social networking sites
86%
Online companies
80%
Internet service providers
75%
Mobile phone operators
75%
IP telephony and chat providers
73%
Government authorities
73%
Operating system providers
Financial institutions
Individuals not acquainted with you
72%
65%
64%
Base: 3818 internet users in US, UK, Germany, Sweden & India.
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
80%
of all people sharing
information on social
networking sites are
selective with whom
they share personal
information
Base: 3818 internet users in US, UK, Germany, Sweden & India.
5
Consumers trust the system
There is a belief in the market as
benign and self-regulatory – and
people think companies would ask for
permission before using any personal
information. They reason that producers need to – and are expected to –
behave; otherwise they would
go out of business. Trust is thus a
prerequisite for the interdependent
relationship between producers
and consumers.
The study also shows that consumers
are most concerned about other individuals getting access to their personal
data – not commercial companies. The
government and financial institutions
are also a greater cause for concern
than companies. Like one study participant from Sweden said:
”If it’s only companies [that can access
your information], you don’t have to be
careful about how you use your
smartphone.”
People think they already
have protection
When it comes to safeguarding their
privacy online and on their mobile
phone, people tend to believe they
are already protected. For example,
22 percent in the survey are under the
impression that they have an antivirus
app installed on their mobile phone,
and 1 out of 5 respondents claim they
have an app or service that lets them
surf the internet anonymously, leaving
no trace.
What would make you share less on the internet on a scale from 1 to 7 where 7
means “It would severely affect my behavior? Share of respondents who answered 6 or 7.
If there were no laws protecting my personal
information online, making it accessible to anyone
55%
54%
If someone I know was a victim of Internet fraud
53%
If the government sent me a letter asking me to stop
downloading copyright content
47%
If I received a text message from a store,
offering me a discount, just as I was passing
If I started a new job that required
a more professional demeanour
42%
28%
— Andrew, 28, US
26%
If my friends stopped sharing information online
None of the above
“I mean if people like
Google and Yahoo! and
Skype had access to my
conversations, I think
they’d probably get a
good laugh.”
64%
If I received a sales call offering me a product or a
service I had just searched for on the Internet
If I received personalized ads on my computer, containing
offers for something I had discussed in an e-mail conversation
12%
0%
70%
Base: 3818 internet users in US, UK, Germany, Sweden & India.
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
6
Coming
reinstatement
of the walls
As sharing has become an invaluable
part of people’s lives, users on social
networking sites are at the same time
becoming more and more conscious
of what they share and to whom.
Your digital image is turning out to be
increasingly important in a connected
world where your identity to a large
extent is shaped online.
Consumers’ sharing behavior is to
a great degree determined by what
is considered socially acceptable,
which in turn is evolving with time.
People are least inclined to share
personal information about their medical records or financial situation, while
music playlists, religious beliefs and
current mood are seen as safe to share
with everyone.
3 out of 5 respondents in the survey
say they would be very concerned
about sharing family photos or video
“The things we share
with our friends we don’t
share with our parents.”
— Abbas, 18, India
“I think the market for
reinstating the walls that
we used to have – where
there were our friendfriends and our workfriends and our other
kinds of friends – is
coming back.”
clips from family vacations online if
they had no control over who could see
them. These results show how important user control is when it comes to
sharing. On social networking sites,
friends are sorted into different groups
to decide who gets to view what –
some don’t get the full story.
What is socially acceptable to share,
or not, differs between markets. In
India, users on social networking sites
are hesitant to upload any information
regarding their romantic relationship
status – if they are not married. In the
US, young people worry they will not
get into law school if they are showing
themselves off as irresponsible online.
Susan Freiwald, Professor at University
of San Fransisco, is predicting a need
to “reinstate the walls”. Users will want
to – and expect to – have full control
over their digital image online.
— Susan Freiwald
What would you be concerned about sharing online if you had no control over who could see it?
Base: 3818 internet users in US, UK, Germany, Sweden & India.
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
7
low awareness
of mobile
threats
The mobile phone is the most private
media device that you have. It can be
lost or stolen, and is therefore vulnerable to privacy harm. At the same time,
smartphones are considered to be safer than computers by most individuals.
Smartphones are not seen as actual
computers – people do not worry much
about getting viruses on their phones
today. But since the importance of the
mobile phone is increasing, consumers are saying they are willing to pay in
order to feel it is protected. 36 percent of the respondents in the survey
answered they would like to get an
application for their mobile phone that
protects it from viruses and intrusion.
Privacy not top-of-mind when
downloading apps
Consumers rarely reflect on security
when downloading applications for
the smartphone. People seldom, or
never, refuse to download an app just
because it wants access to the phone
address book or GPS. Neither do they
consider the company behind the
app – people tend not to care about
brand name when choosing what app
to download. When asked, a low price,
user ratings and recommendations
from friends are equally important as
privacy issues and brand name.
How would you grade the importance
of the following when choosing which
app to download?
Share of respondents who answered 6 or 7 on a
scale from 1-7 where 7 means “Very important”.
A low price
The type of information the
app wants to access
Recommendations from
my friends
51%
50%
48%
That it’s from a brand I trust
48%
User ratings
47%
Base: 3818 internet users in US, UK, Germany, Sweden & India.
Perceived use and demand for mobile phone protection services
36%
Yes, I already have it
No, but I would like to get one
No, and I’m not interested
22%
23%
Base: 3818 internet users in US, UK, Germany, Sweden & India.
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
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Opportunities
in a connected
world
Which company do you
trust the most?
Share of respondents who trust at
least one of the following types of
companies the most.
Trust the most
Base: 3818 internet users in US, UK, Germany, Sweden & India.
In the ICT industry, there is an unanimity that privacy issues will grow in importance. The continuous evolution of
social media, and the growing number
or devices used accessing the internet
in the network society, will put privacy
high on the agenda.
Facebook turned out to be the least
trusted brand, consumers across all
markets tend to see operators as more
trustworthy than other players. Operators are therefore well-positioned for
providing privacy and security services
when the need comes.
More and more sensitive information
will be stored on more and more open
platforms as company unique systems
will be too expensive and cumbersome
to use. Thus, hackers – illegal as well
as legal – will be able to access and
compile data into severe and possibly
harmful combinations. People and
companies will get hurt and there will
be a power struggle between good and
bad forces to have the smartest system
to protect or to break data.
Privacy – a hygiene factor
In a near future, privacy will become a
hygiene factor for consumers. Users
must understand what they are doing
– and how their personal information
is being used. Systems and services
holding consumer information must be
privacy and data protection compliant
right from the start – this should not be
bolted on afterwards.
Operators trusted as guardians
of privacy
As awareness turns into concerns,
consumers will realize that they will
not be able to manage all their privacy
handling themselves. They will need to
find a trusted provider that can help
them safeguard their privacy online.
In the survey, the respondents got to
choose which brands they trusted
the most and the least respectively
in terms of privacy concerns. While
However, consumer awareness and
concern are lagging in relation to industry activities and technical development. Online privacy will thus not likely
be a consumer driven issue, but rather
an industry driven one.
Willingness to pay for security
and control
Today there is an opportunity for
companies to brand themselves as one
who would never misuse any personal
information. Though, in the future,
branding yourself as safe will most
likely be a hygiene factor rather than a
competitive advantage.
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
9
Willingness to pay for security
and control
By looking at the survey results, it is
obvious there is a growing consumer
demand for services protecting mobile
phones from viruses and intrusion, as
well as for apps and services that let
the user be in control.
Martin Ortlieb, Google, foresee that
companies handling consumer data
will need to be transparent and to let
people be in control over their own
personal information.
“Giving access to
those settings is the
way to make it easy for
people to be in charge
of what data is being
stored. I find that if you
don’t let people know
this, and you’re not very
clear on your policies,
that can make people
very suspicious.”
— Martin Ortlieb
Apps and services that let you know
who has access to your personal information online, as well as let you control
your information being shared and
stored online, are considered worth
paying for according to the respondents in the survey. 36 percent would
want to pay for an app or service that
lets you know who has access to your
personal information. 36 percent would
also want to pay to browse the internet
anonymously, and 24 percent say they
are willing to pay for the ability to erase
selected personal information that is
stored online.
Opportunities in a connected world
1. “Personalized
offerings”
E.g. discount based on interest/usage
2. “KNOWLEDGE &
CONTROL offerings”
E.g. let consumers know who has access to their
personal information
3. “Protection
offerings”
Protection against e.g. intrusion and virus
4. “hygiene level –
privacy by design”
Branding
Personalized offerings
At the same time, consumers feel it is
okay for companies to gather information about them as long as it is considered beneficial. This can for example
be achieved by offering consumers
targeted and personalized ads. People
overall tend to appreciate targeted
ads – likely because they would prefer
it over the alternative of spam and
uninteresting advertisements. This is
especially true if they are financially
compensated for letting companies use
their personal information for commercial purposes, for example by receiving
discounts or coupons in return.
44 percent of the respondents in the
survey say they would consider receiving discounts and offers on products
or services based on their personal interests a positive aspect of companies
accessing their personal data.
“If it was between not
having Google and
Google advertising – I’ll
take Google advertising.”
— Lindsay, 27, US
Still, it is essential that the consumers
feel they are behind the steering wheel.
An intuitive user control is needed,
and furthermore, consumer trust must
never be violated. While people say
they consider receiving discounts and
offers based on their personal data the
most positive aspect of companies accessing their personal information, they
feel most negative towards receiving
personalized ads based on what they
share on social networking sites.
People also tend to be pragmatic when
it comes to these matters. As one
respondent from the US said during a
focus group interview:
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
10
Positive aspects of commercial companies using
personal data
Discounts and offers on products/services
based on my personal interests
44%
Discounts and offers on products/services
based on my gender, age group, zip code etc.
34%
Discounted calling plans in exchange
for accessing my personal information
34%
Discounts and offers on products/services
based on my current location
34%
Discount coupons based on my
personal surfing/calling habits
31%
Free online services in exchange for
accessing my personal information
Discounts and offers on products/services based
on my income span, my sexual orientation etc.
Personalized online ads based on the information
I share on social networking services
29%
21%
18%
Base: 3818 internet users in US, UK, Germany, Sweden & India.
Facts about the survey
Quantitative study
Online web questionnaire among
internet users age 15-54.
3818 respondents in five countries:
US, Sweden, India, UK and Germany
Qualitative study
Expert interviews
13 focus groups of smartphone
owners ages 16-20 and 25-35.
84 interview respondents in:
US (New York City, NY and Davis,CA),
Sweden (Stockholm and Hässleholm)
and India (Bangalore)
5 expert interviews, mapping the
academic debate.
Ryan Calo
Stanford Center for Internet & Society
Daniel Solove
George Washington University Law School,
Washington, DC
Susan Freiwald
University of San Francisco School of Law
Martin Ortlieb
Researcher at Google, Zürich
Joseph Turow
University of Pennsylvania Annenberg
School of Communication
Ericsson ConsumerLab conducted the research in Q1 and Q2 2011.
CONSUMER PRIVACY IN AN ONLINE WORLD – AN ERICSSON CONSUMER INSIGHT SUMMARY REPORT
11
Ericsson is the world’s leading provider of technology and services to telecom
operators. Ericsson is the leader in 2G, 3G and 4G mobile technologies, and
provides support for networks with over 2 billion subscribers and has the
leading position in managed services. The company’s portfolio comprises
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and multimedia solutions for operators, enterprises and the media industry.
The Sony Ericsson and ST-Ericsson joint ventures provide consumers with
feature-rich personal mobile devices.
Ericsson is advancing its vision of being the “prime driver in an
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business solutions. Working in 180 countries, more than 90,000 employees
generated revenue of SEK 203.3 billion (USD 28.2 billion) in 2010. Founded
in 1876 with the headquarters in Stockholm, Sweden, Ericsson is listed on
NASDAQ OMX, Stockholm and NASDAQ New York.
The content of this document is subject to revision without
notice due to continued progress in methodology, design and
manufacturing. Ericsson shall have no liability for any error or
damage of any kind resulting from the use of this document
Ericsson
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Telephone: +46 10 719 00 00
Email: [email protected]
www.ericsson.com
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© Ericsson AB 2012