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News

Location based marketing seen as intrusive

ISACA : 26 November, 2013  (Technical Article)
Survey of consumers by ISACA reveals attitudes towards location based marketing on mobile phones and unwanted discount coupons
Location based marketing seen as intrusive

ISACA has conducted research in four different countries (UK, US, Mexico and India) of more than 4,000 consumers’ holiday shopping habits and opinions on privacy. The study revealed that the UK and India consumers are most resistant to location-based marketing tactics on mobile devices, such as stores sending unrequested discount coupons to their mobile phones and stores texting information about special offers when consumers walk past, with more than 70% of respondents in both countries saying that they would find these to be invasive.

Interestingly, according to the IT Risk/Reward Barometer, people in all four countries reported receiving a text message from a store as they walk by almost as invasive as if they were to go into a shop where the clerk knew them by name without ever having met them before. Sixty-nine percent of UK consumers would be happy to be sent a coupon on their mobile device so they can bag a bargain, but 47% would be unhappy if a shop assistant who didn’t know them greeted them by name. Across all countries, people were more receptive to being given discount codes on their mobile phones rather than being texted special offers that may not be relevant.

Out of all the countries surveyed, Mexican participants find short message service (SMS) location-based marketing the most acceptable, with more than 40% saying that they would not find it invasive. However, Mexicans are more reserved when it comes to online privacy and Mexico was the only country to find online recommendations based on browsing history and recent purchases more invasive than offline SMS and location-based marketing techniques.

“These insights into what consumers find invasive is particularly topical given the buzz around big data and marketing. There are plenty of exciting and inventive applications and ways marketers can sell a brand, but it is important not to lose sight of what consumers consider an invasion of their privacy,” said Ramsés Gallego, international vice president of ISACA. “It would be wise for brands to heed consumers' feelings about the invasion of privacy—or at least provide transparency about the information they are collecting and how it will be used.”

Consumers in the UK and US are happier to be marketed to online rather than in-store, while respondents from India find online and offline marketing equally invasive. Nearly half (46%) of Indians find it invasive for web sites to recommend products online based on browsing history and 43% say even recommending products based on recent purchases is invasive. However, the UK, US and Mexican consumers don’t find this tactic as invasive as a website knowing their geographic location.

“Despite how much information people share online, they still cherish the concept of personal privacy,” said John Pironti, risk advisor with ISACA and president of IP Architects. “Retailers that use technology to try to save shoppers time and money without asking permission first may actually do more harm than help to their bottom line this holiday season.”

When it comes to holiday shopping, 18% of the UK, 23% of the US, 31% of Mexico and 49% of India consumers say they plan to do more holiday season shopping online than last year. The average time the UK consumers expect to spend shopping online is four hours, while the other countries nearly triple the UK figure, with each around 12 hours.

The figures from the related survey of more than 2,000 of ISACA’s global members showed that 39% thought their employees would do more holiday shopping this year.

ISACA offers the following tips to protect shoppers’ privacy and security this holiday shopping season:

* Read privacy policies. Understand what personal information websites and mobile apps are requesting and how it will be used. If there is no privacy policy, it’s a red flag—your personal data may be sold without permission.

* Be smart about location-based services. Don’t opt-in to beacon-type mobile apps unless you trust the retailer and their security and privacy practices.

* Don’t shop from public wi-fi hotspots. When you surf the Internet on an open hotspot, hackers can spy on your activities and steal data such as passwords and credit card information as you enter it.

* Beware of phishing. If you receive an e-mail asking for financial information because there is a problem with your order or account, call the retailer to confirm. Don’t reply to the email and don’t provide confidential information, like your credit card number.

* Check it out before you check out. Before you pay, confirm that the site is secure by looking for the “s” in https:// in the site’s URL and check the lower-right corner of the page for the lock symbol.

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