Privacy & Security: The New Drivers of Brand, Reputation and Action

Privacy & Security: The New Drivers ofBrand, Reputation and ActionGlobal Insights 2012

Data security and privacy have moved fromthe backroom to the boardroom.Data breaches, security incidents and Edelman’s industry study shows, for theprivacy missteps are making headlines first time, why managing data securityworldwide and have become a focal and privacy impact business success.point for social media discussions and Our survey reveals:legislation. The gap between consumer expectationsManaging data security and privacy and what businesses are actuallyeffectively is essential to businesses delivering.today. The growing volume and A relationship between effective datasensitivity of information being shared, protection and business success.stored and used is driving demand for That data security and privacygreater transparency about how it is considerations do impact purchasingbeing managed and protected. decisions.

People care about the security of their personal information more than ever before. A majority of consumers are more concerned about data security and privacy than they were five years ago and sense they are powerless to exert control, leaving companies with the responsibility for protecting it. of global consumers are 70% MORE CONCERNED than they were 5 years ago of global consumers feel they have 68% LOST CONTROL over how their personal information is shared and used by companiesBase: All respondents (Global n=4,050)Q12. Compared to five years ago, how has your level of concern regarding online data security and privacy changed?Q15. Using a scale of 1 to 5, where 1 means “strongly disagree” and 5 means “strongly agree,” please indicate your level of agreement with the followingstatements. (Summary of top 2 box scores shown)

These concerns present both a challenge and an opportunity for businesses. Consumers are fed up with the status quo and want companies to act, having seen either no change or a decline in the security of their data over the last five years. Security of Personal Information Online Compared to Five Years Ago (Global) of global consumers feel their 7% Much more secure 32% online privacy is adequately PROTECTED by business practices Somewhat more secure No Change 36% Somewhat less secure Much less secure of global consumers feel companies 85% need to take security & privacy 23% 57% of consumers report no MORE SERIOUSLY change or a decline in the security of their personal 25% information online 9%Base: All respondents (Global n=4,050)Q15. Using a scale of 1 to 5, where 1 means “strongly disagree” and 5 means “strongly agree,” please indicate your level of agreement with the followingstatements. (Summary of top 2 box scores shown)Q14. Compared to five years ago, how would you describe the security of your personal information online?

Adults are most concerned about information held by businesses they use most frequently. Online shopping and banking, which require the sharing of financial information, are the most common online activities. Understandably, consumers are most concerned about the security of their financial information. Most Common Online Activities Information of Greatest Concern Online (Global) (Global) Financial information 90% Personal information 78%Online Shopping 82% Emails 36% Health information 28% Frequent purchase / shopping data 26% Content posted by you to social networks 17%Online Banking 80% Content posted by others to social networks 13% Browsing activity 12%Base: All respondents (Global n=4,050)Q1. Which of the following actions have you taken in the past three months?Q3. What types of online personal information are you most concerned about? Please order the following types of information from least to most important.

Financial institutions and online retailers are not meeting the needs of their customers. A notable gap exists between the number of people who consider data security important in the finance and online retail industries and the number who actually trust them to protect personal information. 23-point gap in expectations 51-point gap in expectations 92% Importance of privacy and security in each industry (global) 84% 78% 77% Trust in each industry to protect personal information (global) 69% 69% 63% 51% 50% 50% 48% 43% 37% 33% 27% 23% 12% 12% 9% 11% 6% Finance Online Medical & Government Social Technology News & Automotive Food & Gaming Utilities* Shopping & Healthcare Networking Media Grocery RetailNOTE: Q7: summary of top 2 box scores shown; Q8: top three industries selectedBase: All respondents (Global n=4,050)Q7. How important is your privacy and security when doing business with the following industries? *NOTE: Utilities not included as a response codeQ8. Which industry do you trust most to adequately protect your personal information? Please select the top three industries.

Concern over businesses’ ability to protect information impacts engagement in activities important to online retailers and banks. Consumers report abstaining from frequent shopping or loyalty card programs and online banking to protect their personal information. Consumers Taking Action to Protect their Online Information ONE in FIVE adults do not join a frequent shopping ONE in TEN adults card or loyalty card program do not bank onlineBase: All respondents (Global n=4,050)Q4. Which of the following actions have you taken to protect your online information?

Consumers consider data security and privacy features when purchasing tech products. Nearly half of consumers reported that data security is among the top three factors they consider when purchasing a smartphone. Top Three Most Important Factors Considered When Purchasing Smartphones (Global) 69% 61% 48% 47% 40% 35% Price Ease of Use Data Security & Privacy Style & Design Product Warranty Physical Dimensions (size, weight)Base: All respondents (Global n=4,050)Q5. In your opinion, when making a decision to purchase the types of products below, what factors are most important? Select up to three choices.

Security considerations also impact other purchasing decisions. For personal computers and tablets, security considerations are on par with style, design and physical dimensions of the product. Top Three Most Important Factors Considered When Purchasing Tablets and Personal Computers (Global) Price 71% 75% Ease of Use 59% 53% Data Security & Privacy 42% 51% Style & Design 42% 34% Product Warranty 45% 54% Physical Dimensions (size, weight) 43% 34%Base: All respondents (Global n=4,050) Tablets Personal ComputersQ5. In your opinion, when making a decision to purchase the types of products below, what factors are most important? Select up to three choices.

Security considerations also impact other purchasing decisions. Even shoppers of traditional mobile phones and videogame consoles feel security is a key concern. of global consumers consider DATA SECURITY AND PRIVACY 29% among the top 3 most important factors when purchasing standard mobile phones of global consumers consider 22% DATA SECURITY AND PRIVACY among the top 3 most important factors when purchasing videogame consolesBase: All respondents (Global n=4,050)Q5. In your opinion, when making a decision to purchase the types of products below, what factors are most important? Select up to three choices.

Smartphones are suffering from a trust gap. More customers take security into account when purchasing a smartphone than say they trust the security of the devices. Comparatively, smartphones are considered the least secure devices. Consumers selecting Data Security and Privacy among Top Three Most Important Factors vs. Trust in Security of Devices (Global) 14-point difference in consumers considering security 58% important and those that trust security for smartphones 51% 48% 44% 42% 37% 37% 34% 29% 22% 17% Personal Computers Tablets Smartphones Standard Mobile Videogame Console Digital Music Player* Phones Consumers selecting Data Security & Privacy among Top Three Important Factors Trust in Security of DeviceBase: All respondents (Global n=4,050)Q5. In your opinion, when making a decision to purchase the types of products below, what factors are most important? Select up to three choices.Q6.Please indicate your level of trust in the security of the following types of products. *NOTE: Digital music player not included as a response code

The premium on security translates to adoption and retention of consumers. Consumers indicate willingness to leave online services if personal information was accessed without permission and are most concerned about services that involve financial information. Consumers Likely to Switch Providers or Stop Using Services Entirely if Personal Information was Accessed Without Permission (Global) 80% 79% 77% 75% 75% 67% 67% 65% 63% 59% 55% 55% 54% 50%Base: All respondents (Global n=4,050)Q9. For the following types of companies, if your personal information was accessed without your permission, how likely would you be to switch to a different provider orstop using these services entirely, if they did have personal information on you? Please use a scale of 1-5, where 1 is “not at all likely” and 5 is “very likely.”

Businesses must manage security and privacy like a line of business and will lose customers if they do not. Data shows that inaction on issues of data security and privacy will put businesses are risk of losing their customer base. Consumers that have Left or Avoided Companies because of Security Issues they have had in the Past 58% 55% 53% 52% 46% 41% 36% 31% Global US Brazil China Germany India Korea UKBase: All respondents (Global n=4,050)Q16. Have you ever left or avoided companies because they have had security issues in the past?

Consumers indicate they will act to protect their privacy if businesses don’t. In the wake of a data breach, individuals are even willing to abandon the companies they trust most. Data breaches may also impact reputation due to the strong tendency of victims to share their experiences. Americans proved most loyal to the Actions Taken following Data Breach Eventscompanies they do business with, yet ONE in TWO say they are likely to of global consumers change brands after a data breach 39% TOLD A FRIEND about their experience of global consumers would 71% SWITCH PROVIDERS of global consumers after a company they rarely used suffered a data breach 29% POSTED ONLINE about their experience Base: All respondents (Global n=4,050) Q10. If the brand you trust most and use most loyally suffered a data breach, how likely would you be to switch brands? Q11. If a brand you rarely use (but still has your personal data) suffered a data breach, how likely would you be to switch brands? Q21. Did you take any action following these events?

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Privacy & Security: The New Drivers of Brand, Reputation and Action

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