As the Internet of Things (IoT) readies itself for the Information Age’s next big leap, we are going to see a lot more debate this year around data security and privacy with user control taking center stage.
You’re coffee maker is connected to the internet, and you’re getting automatic delivery of those designer brand capsules. All is good! But what do say about your usage data? Do you have any privacy concerns?
This is the year when I believe we will finally move past those same old “with or against” arguments and start talking more about how IoT can exist with users having an unprecedented oversight when it comes to how their consumer IoT data is captured, used, protected, bought, or sold. Here are five reasons why:
One date that everyone will have their eyes on is May 25, 2018 when the European Data Protection Regulation (GDPR) is set to go into effect. Billed as the most important change in data privacy regulation in 20 years, GDPR’s goal is to protect personal data by giving control of it back to the consumer. And if that’s not incentive enough for brands to get on board, penalties for violations will be stiff: €20M or 4% of global revenue, whichever is higher. And this affects companies worldwide. GDPR will impact any organization that handles the data of European citizens. While US lawmakers may be viewing regulations differently (e.g. recently repealed last October’s FCC rules that were to force broadband providers to provide consumers with greater data security, transparency and control), the pendulum is clearly in motion. All around the world, consumers will be regaining ownership of their personal data, especially as we march toward a more IoT-driven world, it simply makes sense–to consumers and to the brands catering to them.
While many still cling to the notion that giving consumer control over their data is a death knell for marketing, the more forward-looking see it as a golden opportunity to create deeper, longer-lasting relationships with consumers, which will start paying off even before we reach the IoT days where everything is connected. No longer will brands be able to indiscriminately track a user’s digital activity, but they’ll, in turn, receive the user’s permission and the level of trust associated with that. Advanced solutions are emerging to provide a “single view of consent” dashboard with fine-grained, permissions-based, and cross-channel data management across all web-connected devices and properties in a wide variety of locations. This allows brands to serve each consumer within his or her user-defined control parameters in seamless fashion.
3. Security Threats
The paradigm shift from consumers allowing their data to be exploited to consumers wanting control, context and choice is driven not just by an abstract fear of who has their data. It is a justifiable reaction to the proven power hackers have to break into many networks or devices they want. And this means more than just absconding with private data. Sometimes it means breaking into the most intimate moments of our lives – hacked teddy bears, or hacked webcams, or government agents spying on citizens through their iPhones. And while it may not have raised broad consumer fears, let’s not forget the massive October 21 2016 IoT attack that brought down sites like Twitter, Paypal and the Wall Street Journal through a botnet of hacked home devices. If this is the state of IoT security for today’s estimated 23 billion connected devices, what will it be like in 2020 when there will be 50-plus billion of them? Any breach of trust will result in tempered usage or outright rejection of the device or provider in question, because the consumer’s digital identity will become their key to this new connected world. It will become the most valuable thing they own. And they will fight to protect it.
4. Consumers Themselves
People are becoming increasingly wary of how their data is being collected, retained and used. And for what? Advertising that never seems to have anything to do with them. Consider last year’s 30 percent increase in global ad blocking that now brings the total to 600 million ad-blocked devices. You can try banning it, you can try getting around it, but in the end, forcing your brand onto the ad-blocking public is like trying to be friends with someone who wants nothing to do with you. Why fight it? According to AdBlock Plus, 75% of their users tolerate what they consider non-disruptive ads. In other words, consumers are happy to let certain messages through as long as it’s done respectfully, responsibly and in ways that appeals to their needs. Brands that realize this will be able to build the trust that’s necessary to keep customers coming back.
5. IoT Itself
If there was any doubt, this year’s CES proved once and for all that consumers will soon be immersed in IoT. Do your kids use IP-connected toothbrushes yet? IP-connected smoke alarm? IP-connected pet food dispenser?
Consumers may not fully understand just what IoT is just yet, but once they start embracing even just some of the many web-connected devices, they will not only better understand how IoT services directly benefit them, but they will also probably start wondering what happens to all that personal data they’re giving out.
Having Alexa order you a pizza, for instance, will require Alex knowing where they live. But will everyone be comfortable keeping this information with Amazon? Are you comfortable using this information for an Alexa advertisement for pizza delivery? Any privacy or security concerns? The connected home will know when you’re home and when you’re out and about. What about the bad guys? What if they know too? The combination of transparency and user defined data permissions will help keep IoT healthy. Take away that control, and as hacking and careless data management continue to wreak havoc, consumers could start putting limitations on the devices that they let in.
IT departments love control. Marketers are not much better when it comes to giving customers’ control over their data. But the winds of change are blowing, and companies need to change with them or get swept away.
Jim Kaskade, CEO, Janrain