Misuse of Personal Data Is the Leading Cause of Tech Industry Distrust

April 22, 2019

Events in the past couple of years have shown how easy it is for a company to lose its reputation and trust with consumers. The tech industry is far from immune, with a report [download page] from Dentsu Aegis Network findings that the main driver of consumer distrust with tech companies is the misuse of personal data.

Of the more than 43,000 people surveyed globally, almost two-thirds (64%) stated that they believe that misusing personal data was the main cause for not trusting tech companies.

This distrust has had a profound effect on the reputation of many tech companies. Other recent research shows that in the US, only one major tech company (Netflix) placed in the top 10 most reputable companies, while Facebook and Google didn’t even appear in the top 100.

In fact, 78% of all respondents to Dentsu’s study said they would be likely or very likely to stop doing business with a company who had misused their personal data. Not straying far from the total percentage, three-quarters (75%) of US respondents said they were likely to cease purchasing from a company that misused their data.

While data misuse is by far the greatest factor in causing mistrust, other contributors include: automation and tech companies not creating enough jobs (26%); the pursuit of innovation for its own sake (26%); creating excessive wealth (20%); poor working conditions (17%); and not paying enough taxes (16%).

Consumers Are Decreasing Their Digital Footprint

Fears of data breaches and companies using personal data improperly have led to more consumers attempting to limit their online footprint. While other research has shown that what personal data consumers often varies by region, some 44% of respondents to the Dentsu survey overall said they have taken steps that reduce the amount of information they share online in the past year. This includes by deleting search histories and disabling geo-location services.

Although e-commerce has been on the rise around the world, data privacy fears could be limiting its growth. Shopping in-store instead of online is another way consumers are limiting their digital footprint, with more than one-third (35%) of respondents saying they have chosen to buy a product in-store instead of online. In the US, a study by McKinsey shows that while the percentage of shoppers who shop exclusively in-store is relatively low, more than half shop online and in-store equally.

Meanwhile, 1 in 7 respondents to the Dentsu Aegis Network survey said that they had deactivated their social media accounts (14%). Only 22% overall had not taken any of the identified steps to limit their digital footprint.

Ad Blockers Create More Online Freedom

Another way respondents are reducing their online footprint is by decreasing the number of ads they encounter. More than one-quarter (27%) of respondents reported installing ad blocker software in the past twelve months.

While this may be bad news for advertisers who expect to see their online ad spend to grow by about 12% globally this year, ad blockers appear to allow consumers more freedom to spend time doing things online than those who do not have an adblocker installed.

For example, some 84% of respondents who have ad blocking software installed said they were more likely to shop online than they were last year, compared to 77% without ad blockers. Consumers with adblocking software installed are also more likely than those without to be streaming more music (78%) and television (71%), using banking apps (77%) and using apps to book transportation (60%).

To read more, download the report here.

About the Data: Dentsu Aegis Network, in collaboration with Oxford Economics, surveyed more than 43,000 people across 24 countries: Australia, Brazil, Canada, China, Denmark, Estonia, Finland, France, Germany, Hungary, India, Ireland, Italy, Japan, Mexico, Netherlands, Norway, Poland, Russia, Singapore, Spain, Thailand, United Kingdom and the United States in July-August 2018.


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