First it was a data tsunami – now it’s just a data disaster

Written by on August 28, 2015 in Opinion with 2 Comments

Data disasterThis is not a good time for data. After years of convincing ourselves that data, in all its glorious forms was going to be the saviour of all digital businesses, recent events have proven that it could be quite the opposite.

The widespread collection and re-use of any data we could get our hands on was going to be particularly valuable in addressing and improving the so-called ‘customer experience.’

Big data was touted by all and sundry as the panacea for curing all our ills – from churn reduction, to increased customer spending, detailed customer profiling to an individual level in real-time and, as a result, a happy and loyal customer.

Many of the arguments in favour of massive spending in data storage, reprocessing and analysis were fed by the revelations that online behemoths like Google, Amazon, Twitter and Facebook were making big money from this very data. Some from their own use of it, others by selling it to eager buyers keen to learn the innermost secrets of existing and potential customers.

We even assumed that customers would be willing to trade their own personal information or allow us to deluge them with marketing attacks in return for free services. We soon learned that the only ones willing to cut a deal were the ones that didn’t have the money to buy what was being offered in the first place. That’s why they opted for the ‘free’ service in the first place.

A recent survey by the Annenberg School for Communication, University of Pennsylvania, went as far as saying that marketers were “misrepresenting a large majority of Americans by claiming that they willingly give out information about themselves as a tradeoff for benefits they receive.” To the contrary, the survey revealed most Americans do not believe that ‘data for discounts’ is a square deal.

The findings also suggested, in contrast to other academics’ claims, that Americans’ willingness to provide personal information to marketers cannot be explained by the public’s poor knowledge of the ins and outs of digital commerce. In fact, people who know more about ways marketers can use their personal information are more likely rather than less likely to accept discounts in exchange for data when presented with a real-life scenario.

The findings, instead, support a new explanation: a majority of Americans are resigned to giving up their data—and that is why many appear to be engaging in tradeoffs. Resignation occurs when a person believes an undesirable outcome is inevitable and feels powerless to stop it.

“Rather than feeling able to make choices, Americans believe it is futile to manage what companies can learn about them. The study revealed that more than half do not want to lose control over their information but also believe this loss of control has already happened.

By misrepresenting the American people and championing the tradeoff argument, marketers give policymakers false justifications for allowing the collection and use of all kinds of consumer data often in ways that the public find objectionable. Moreover, the futility we found, combined with a broad public fear about what companies can do with the data, portends serious difficulties not just for individuals but also—over time—for the institution of consumer commerce.”

When you consider just how powerless we all felt after the WikiLeaks and Snowden revelations at how much data governments were amassing on all of us, under the guise of national security, and the more recent high profile hacking of retail and online ‘affairs’ sites, you can understand our antipathy to data collection and its abuse.

In the much-publicised Ashley Madison hack, we discovered that even when people thought their anonymity was guaranteed, even after they faked names and addresses, the clever hackers were able to glue enough clues together to divulge real names. And this despite many paying to have their data deleted. The subsequent fallout and legal ramifications are yet to be felt.

Here we find a new group of social vigilantes that supposedly feel they should be the arbiters or morality by exposing cheating spouses to the world. The hackers, who have not yet been identified, appear to bear a grudge against the company and its customers and want to undermine both by exposing users to public scrutiny.

The prospect of attacks by non-financially driven hackers pursuing publicity, blackmail or moral judgments sends shivers through the online dating and sex industry, but more so to the data dealing industry. Now we are seeing reports that blackmailers armed with the data dump are contacting Ashley Madison members with extortion demands.

Well, if government agencies could get way with it, why shouldn’t the hackers who bear a striking similarity to ISIS madmen that are destroying ancient sites like Palmyra – just because they are there and they can.

The much greater issue that all of this raises is that the public has a dwindling faith in what is happening to their data. The trust factor is all but gone and we are yet to see what effect this will have on digital businesses over time. The constant abuse of personal data and our industry’s inability to protect it is amounting to a data disaster of biblical proportions.

Is this an opportunity for trusted parties like network operators and CSPs to provide that security or, in their rush to be data gurus themselves, have they managed to lose that opportunity too?

First published at Telco Analytics Asia

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About the Author

About the Author: Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, acts a market strategist and is now Editor of DisruptiveViews. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide. .

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  1. Scott says:

    Great article. On a lower level scale as a customer of a company securing my private data from my home computer in Greece, I was amazed at how many of my Greek friends did not even use any type of cloud service to back up their computer data or even make a secondary local hard drive back up of their precious familly photographs and videos. What used to be printing of photographs and the limited risk of losing a photo has manifested into losing a lifetime of photographs, videos, and memories from something as simple as not backing up those memories to the cloud.

    • Tony Poulos says:

      Hi Scott, do you think that’s because of the economic climate in Greece, poor connectivity or lack of awareness that these services are available?

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