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The Average Consumer Thinks Data Privacy Is Worth Around 65 Cents
chicksdaddy writes "Threatpost is reporting today on the findings of an ENISA study that looked at whether consumers would pay more for goods in exchange for more privacy. The answer — 'Sure...just not much more.' The report (PDF): 'Study on Monetizing Privacy: An Economic Model for Pricing Personal Information' presents the findings of a laboratory study in which consumers were asked to buy identical goods from two online vendors: one that collected minimal customer information and another that required the customer to surrender more of their personal information to purchase the item, including phone number and a government ID number. The laboratory experiment showed that the majority of consumers value privacy protections. When the prices of the goods offered by both the privacy protecting and the privacy violating online retailers were equal, shoppers much preferred the privacy protecting vendor. But the preference for more privacy wasn't very strong, and didn't come close to equaling consumers' preference for lower prices. In fact, consumers readily switched to a more privacy-invasive provider if that provider charged a lower price for the same goods. How much lower? Not much, researchers discovered. A discount of just E0.50 ($0.65) was enough to sway consumers away from a vendor who would protect the privacy of their personal data."
One wonders how much your privacy is actually worth. Hell, most sites straight-up tell you that they're going to sell your information the first chance they get. And how much do they get from the sale of your information that you'll never see? I'd be surprised if they even made a dollar per unique user. Just look at the email lists that get swapped around by spammers if you don't believe me.
Were they really measuring how much customers were willing to pay to avoid having this information stored, or were they measuring how much they were willing to pay to avoid having to type it all in? TFA seems slashdotted at the moment, so I can't tell if this is answered, but if you're buying something online then you already need to provide delivery address and credit card details, so there isn't much extra privacy you can get. Not having to type in a load of information is worth a small amount, but it only takes a minute, so not very much.
I am TheRaven on Soylent News
Average Joe is an idiot. Film at 11.
Not usually a nitpicker but COME ONE!
while [ 1 ]; do echo -n -e "\xe2\x95\xb$((($RANDOM&1)+1))"; done
The personal data of anyone participating in some random survey is probably pretty useless. Good luck getting a credit card on the credit score of someone willing to show up to some strange lab on the promise of a $10 payment and a free soda.
SJW: Someone who has run out of real oppression, and has to fake it.
But are the consumers being properly informed about the ramifications of the vendor having that information? What are they using it for? Can they be trusted to only use it for that and not re-sell it? Really? Come on be honest.
I think this study says more about the illiteracy we have with what "privacy" means and our tendency to trust authority-looking-figures when they say they need information from us. I don't think it's accurate to interpret complacency with rational economic valuation.
To be fair, you would need to multiply that $0.65 times every item bought. Adding up the sales difference in aggregate, this would be a much higher value than the title suggests.
I'd pay more for a pack of verbatims hehe
65cents under one scenario- beyond that, surely it is all dependant on how invasive they are; what the product is; how much it is to begin with.
If you're talking about a new 50inch 3d smart-TV. 65cents is nothing. If you're talking about a $1 photo order- 65cents is over half the order.
It would also depend on how the privacy being invaded- are they just keeping a log of everything you buy- selling your information to third parties- posting what you buy to facebook.
Also- how much do the "privacy sensitive" companies really respect your privacy? How much do you trust them. I don't trust anyone online- I just assume everyone is going to share what I give them. Sad... but that's the truth.
How much does Privacy matter to me? Well- I refuse to shop at Tiger Direct ever since they asked me for my Soc Sec Nbr. Simply none of their business. Will never go back to them no matter how cheap they are- there is no legitimate reason they should have asked for it.
"That's the way to do it" - Punch
That 70cents you will make back in a few minutes working.
The data they will have forever.
I tend to inject random noise into any surveys I answer, so the average of all answers is "I don't exist". Flood any system with enough garbage and you render the entire system mostly useless.
($.065)65 cents
.....to buy goods should not risk my privacy. I detest going into a Best Buy or Sears or any where else that has to ask for a phone number or zip code, and when I say no, I'm told, well it's the only way we can refund you if there is an issue with a product. And I immediately call Shenanigans, and they sheepishly admit that they don't need the info.
It's bad enough that my info is being sold to advertisers when I purchase on line due to some cookie on the browser page. My purchase no matter where I make it is and should be private, which includes any data I must provide in order to make a legitimate purchase. That is a purchase agreement for goods, not my info.
I'm so tired of every company having to have all of my info. I don't want targeted ads, in fact stop advertising to me.
Privacy is priceless, and Cash is King.
Life takes interesting turns, but the most interest is when you're off the beaten path.
What the article failed to tell you was that immediately after the test participants made their online product selection from the appropriate vendor, they 'shared' their conquest on Facebook.
A lot of it is that people for a long time didn't care about if a shop had a lot of info about them. However, with the fact that one can be denied a job, and scored on how employable they are due to their private writings, people are wising up to the fact that knowledge is power, and that clicking the "like" when someone shares a joke about "press 1 for English" can mean no job for seven years, that privacy might be useful.
It may be too late for most people though.
"Average Joe is an idiot. Film at 11."
I'm probably as guilty at too often thinking the Average Joe may be as informed/cynical as I am. I.e, my non-RTFA response is "Credibility Matters".
These days I don't find the idea credible that any service could actually succeed in maintaining a business model, and in the technical challenge, of securing my privacy and providing a service even remotely comparable to the privacy 'invading' alternatives like Google and Facebook. At least not for $1, or even $100/yr. Even if you could somehow neutralize the unethical advertising gangs, neutralizing the unethical state sponsored intelligence agencies, as well as the unethical organized criminal gangs, seems in my estimation to be entirely out of the reach of any corporation. Yes, I am one of THOSE open source software zealots...
People have shared their data for years with all sorts of retail stores, beginning with the supermarkets. Of course the value of the savings at a supermarket far exceeds the savings mentioned in the summary (TFA is not loading for me). We run a loyalty program at my hardware store and occasionally a customer balks at providing their name and address to us to receive the special sale price or daily deal. It's pretty rare lately, I think people are resigned to the fact that stores are capturing their data anyway (the bankcard companies are all now selling aggregate purchasing behavior data).
I think the bigger issue is government access to your data. I'm much more worried about what the IRS or the TSA might sift through, but I really could care less that CVS believes I'm incontinent because I buy Depends for my in-laws.
"We make our world significant by the courage of our questions and by the depth of our answers." Carl Sagan
Isn't it easier to just live in a world where you assume everyone knows everything about you???
That's mostly how I live my life.
Most people are knuckle-dragging, mouth-breathing idiots. More on this shocking story at 11.
The article (not the original paper) is averaging together all of the people that said "Naw, I wouldn't pay anything extra" along with all the people that said one, two, or five dollars, etc. So of course it's going to be some sad little number, leading to a headline that sounds like people are selling their souls.
A more useful question, "of those willing to pay for privacy, how much would they pay?" Read the original paper (not the cheap little article) and you see things like "A non-negligible proportion of the experiment’s participants (13–83%), however, chose to pay a ‘premium’ for privacy. " The paper is actually supporting the idea that some people are willing to pay enough that it would fit into the business model of different content providers.
I also think that a bunch of us hate the idea of paying for privacy, not because we don't value it very much, but because it is offensive to think we would need to pay for it. So again the article headline gives a false notion of everyone selling out for 65 cents, when the stats are unlikely distinguishing between apathetics and holy rollers that would both decline to pay for privacy.
Not what I would call a representative sample.
Makes me wonder... was the research conducted like so many political polls in the U.S., in which the controllers deliberately limit their sample to groups who will give them the desired result?
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Have gnu, will travel.
I actually read some of the PDF report. The entire world falls into two groups: Those that provided the information, and those that did not. Am I the only person in the world who provides false information in return for $.065? Or does the study disclose, by not having data on how many provided false information, that it had no control for false information?
Gently reply
missing point: The distribution of consumers is not normal!
The average is telling us nothing we didn't know: most people don;t give a shit about there privacy.
I am most interested in what the value of privacy is to people who understand what it means... These are the few outliers that spent more to protect their privacy.
What - not today. You don't have any, except when you get out of the shower tomorrow - which will change when Google launches XRAY - taking GoogleMaps to a whole new level. Thought you go back to simple calling, nope, give up buddy. That land line is really connected to your broadband modem, which now has an IP so no, can't go there.
I hear Campbell's soup cans are still really cheap as is string - but who cares, we already know who you are and what you're doing 24X7
Well I just tried to buy a Minecraft license online. I went through their payment page, put in my name and credit card info and got declined because their payment processor, Moneybookers, said I needed to sign up for an account and scan my drivers license and send it to them.
I kinda would have liked to have played the full version of Minecraft but I am sure as hell not giving out that kind of information for it.
They talk about the salience of certain details in TFA. The one really salient fact they leave out of most of it is the price level they find that $0.65 (!) to be the difference. FYI the following (I read TFA, more or less):
1. They tested with prices of 2 to 7 euros vs. a 50 cent higher ones. In one example, the market share of movie ticket sales of a service that charged 7.00 for a ticket went from 60% to 87% if they asked the snoopy private info separately in the alternative (so yep, people dislike typing the same another time, if that was what it took; my patience with TFA wasn't enough to find that out);
2. That particular example was a German movie ticket service, that sells lots of tickets. That it's German is salient, because Germans of my age, for example (~50) will be quite reluctant to give any extra bits of info, although they're most likely to know that their info is going to be recorded anyway, if they use a credit card. If you took the same test to Britons you'd be likely to find different results, let alone in the U.S.
But then I guess one would have to be a bit on the geeky side to do what I do: First, if at all possible, use only PayPal. They'll get a shipping address. Second, if I suspect a price lock-in based on postal code or the like, I make sure I use a proxy to hide my location. I don't have to hide myself otherwise, as I routinely destroy all cookies after each session. As most people are still to find out about adblockers, I assume they don't destroy their cookies, either--or I know it after cleaning up a zillion computers. Then, if it takes too long to get an answer, I start suspecting the kinds of shenanigans that are demonstrated at http://panopticlick.eff.org --if you haven't visited yet, it's an eye-opener to how much good that cookie removal is if they're real shitheads (the service providers, that is). Next in line is spoofed mac addresses and proxy together.
So I'm also a paranoid. Sue me!
A threshold value is not a good measure of a non-normal distribution, and consumer estimated value is a poor measure of the value of privacy foregone.
In a non-normal distribution, a threshold value, like the median, can be very misleading. This case shows that most people do not perceive the value of transaction privacy as being greater than $0.65, but if the people who think it is worth more than $0.65 think it is worth significantly more, then the $0.65 is significantly below the mean perceived value. Due to inherently poor numeracy in public perception, using a non-mean value to represent a measure of a public perception of value is misleading.
Even if that were an accurate measure of mean perceived value, consumer ability to estimate the societal value of transaction privacy is almost certainly downward distorted. Just as most people do not grasp the full value of free speech and freedom of assembly, most people are not capable of properly estimating the societal value of transaction privacy. Free trade is exposed to the same risk of chilling effects as free speech. If every purchase is monitored, recorded, and subject to later scrutiny by anyone with the funds to buy the records, the knowledge of that scrutiny will distort purchasing behavior. Distortions in purchasing behavior cause equilibrium prices to shift, which results in a reduction in total satisfaction of wants ("total satisfaction of wants" is often estimated broadly as "GDP").
That all is to say; as economic models of pricing go, this one either betrays a significant misunderstanding of the difference between total societal value and individual perceived value, or it fully understands that distinction and suggests that corporate actors should sacrifice total societal value in favor of the distorted individual perceived value if they wish to maximize profit. The latter is exactly the sort of market distortion that should be considered in optimizing a well-regulated free market for GDP maximization.
Stop-Prism.org: Opt Out of Surveillance
Most consumers also think that with the right products, everyone can be above average.
If we make it a crime to collect certain types of information there is no way people can charge more or discount prices to get the information. It makes it easy to take that chip off the board.
... instead, this is the value of some big corporation's PROMISE of privacy.
now we need to go OSS in diesel cars
A discount of just E0.50 ($0.65) was enough to sway consumers
I didn't read the paper, but the conlcusion seems a bit stupid. A discount of $0.65 for something that costs $0.70 is pretty different than a discount of $0.65 for something that costs $10, so in the context of the experiment in question saying that people value their privacy $0.65 seems misleading. I question the interpretation of the findings. Why not make the same experiment with people being offered to pay for privacy in a free service?
The average CONSUMER is worth around 65 cents!
This sig is not paradoxical or ironic.
I don't want to live on this planet anymore.
Check your premises.
Privacy should be free, and anyone forcing customers to pay for sufficient privacy are running an illegal operation. As said at http://gilc.org/privacy/survey/intro.html, "Privacy is a fundamental human right recognized in the UN Declaration of Human Rights, the International Convenant on Civil and Political Rights and in many other international and regional treaties." I know that $0.65 sounds cheap, but I'd be willing to sue anyone who requires me to pay for (any of) my human rights.
I would argue that $0.60 is the value people ascribe to the _promise_ that their privacy will be protected. How many times have we seen those who have made such promises fail to keep them - either by accident, attack or incompetence? Enough to make most other such promises seem pretty close to worthless.
data privacy is a boolean choice. Either yes or piss off there is no talk of extortion here.
That's... not how exchange-rates work!
That's like saying "Interestingly, consumers responded much better to prices of $1.28 than they did to prices of $1.30, almost as much of a difference of previous drops of $2.60 increments"
I could prattle on all day. Yes targeted advertising is nice, but there's a line past which it becomes intrusive. We are hiding from all the things that could go wrong, not what could go right.
Worst case, I shop for myself locally and shop online for presents because friends and family are not in my city. Even 20 minutes away, it's easier to have Amazon ship it directly. So Amazon has a really strange idea of what I like. It does not do a good job making suggestions for gifts for other people because my apparent 20 personalities are not all compatible.
A guy I know is a lawyer who focuses on DUI cases. We were talking about website ideas, and he mentioned that he does a lot of research on laws and the sorts of questions that come up here all the time. Depending on where he is, he frequently gets "Do you need a DUI lawyer?" adverts from some guy 4 or 5 states away. Some advertising network has him marked as a DUI arrestee now. That could pose a problem for someone whose career in part depends on maintaining good standing with the law. This would be easy to explain, but getting in a position where it has to be explained is not good.
On FaceBook (I don't use it any more, nuked my profile), I went through all of the profile and privacy settings, clicking each drop-down to see what the least intrusive option was. Apparently I selected "Interested in.. men". I didn't change it when I realized it a few weeks later because I thought it was funny. Then I got all gay all the time on the adverts that pop up. Finally switched it to women (that did not modify their advertising settings - I had to e-mail support and have them change something else to un-set my advertising preference). The only other option is not setting it blank, but switching to "interested in women". Now I get "Lonely and need a woman who looks exactly like the person in this photo doesn't?" ads, no exception. I'm interested in women, but I'm certainly not using FaceBook for that purpose, and even if I were I'd want to find real women who live near me, not whatever it is behind those ads. Adverts dealing with my posts or my friends' posts, like gmail's ads, would be understandable. But if the profile says "single male interested in women" apparently that sends a stronger message than "I just ate a chimichanga, perhaps I might like mexican restaurant coupons."
And then there's the story of the Target advert sending pregnancy item discounts to a 15-year-old's house. The father was irate that Target would mis-identify his daughter as pregnant, when in reality a clever association of products correctly identified her. There are some things you would prefer that the store either not know about you, or not divulge. Like if I go in to the doctor's office and have a hemorrhoid lanced, I don't want to see the nurse at a restaurant and be asked if I need tome Preparation H because there's a sale at Penny's. She knows, I know, I know she knows, but we just don't mention it.
The free market has finally figured out how to legalize extortion. We have something you need, and if you don't pay extra, you'll be hearing from our, ah, associates, in the very near future.
If this is all true, then why isn't my world a never ending deluge of ads for Cthulhu laced tentacle porn?
Sounds to me like people have issues in their lives which they hope to avoid dealing with through "privacy". In almost all cases it's better to just punch those issues in the face and get it over with.