Consumer concern over online privacy up by half

But transparent businesses can help improve customer loyalty

Consumer concern about online privacy is growing, with 94 percent of consumers worried about it and 54 percent more concerned than a year ago, according to research.

The research suggests the impact on businesses could be significant with consumers engaging less with companies they don't trust, but there is also evidence that transparency can improve customer loyalty to other companies.

The TRUSTe 2012 UK Consumer Data Privacy Study was conducted online among over 1,000 adults by Harris Interactive, just after the enforcement of the EU cookie directive began.

The survey found:

27 percent of consumers are more concerned with mobile privacy than website privacy

Consumers engage less with companies they do not trust - leading to lower purchases (29 percent), app downloads (68 percent) and sharing of information (86 percent)

Consumers believe advertisers, publishers and ad networks are all responsible for safeguarding their privacy, but trust themselves most

TRUSTe's research also shows that transparency is key if businesses are to address these concerns. For example, 79 percent of consumers are aware of online behavioural advertising (OBA), 53 percent do not like it, and 42 percent believe that personally identifiable information (PII) is attached to tracking activity.

However favourability towards this kind of advertising almost doubles when consumers are assured that any data that could identify them personally is not used.

Consumers also reward companies for good privacy practices, with 51 percent more inclined to click on an advertisement that gives them the option to opt out of online behavioural advertising, and 55 percent are more inclined to do business with publishers and advertisers that give them the option to opt-out.

Chris Babel, CEO at TRUSTe, a company which sells online privacy management systems to organisations, said: "The recent EU cookie directive has put third party tracking and online behavioural advertising under the spotlight in the UK, and has forced advertisers, publishers and brands to consider their data privacy practices and how they communicate these to their consumers."

According to research published by KPMG last month the EU cookie law has so far been largely ignored by UK institutions, despite the risk of being fined. Cookies are small text files which are used by websites to analyse their visitors' internet behaviour. The files are stored on a user's hard disk to enable targeted advertising and personalised web pages.

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