Survey_SetC

[|Andreas Weigend] STATS 252, Stanford University, Spring 2009
 * Data Mining and E-Business: The Social Data Revolution**

**Email to: stats252.homework@gmail.com.**
This assignment is optional but can be used for extra credit towards your homework grade. Students who attempt this homework will also be able to present their findings to the class.

Overview: The goal of this assignment is to create a comprehensive summary of the Survey Insights worth being featured in the press. Please work together on the following questions to make a cohesive entry that is ready to publish on sites as big as the New York Times or even TechCrunch.

Consumer Forgiveness for Privacy Violations, Can we be bought?
//A recent Stanford survey shows that when it comes to privacy, consumers are willing to negotiate//...

Do consumers really care about online privacy? Not as much as you might think, a recent survey suggests. A poll of over 150 Stanford students revealed that consumer's attitudes toward privacy infringement highly depends on what they get in return. When asked to imagine an online business that used personal data for undisclosed purposes, an overwhelming 60% of respondents said they would be less likely to buy from that business in the future. However, upon closer questioning, 50% admitted they would forgive and forget if the business used the information to provide relevant recommendations or deals.

Jeffrey Rosen - Is Privacy Dead? media type="youtube" key="5raH8oORHKM" height="344" width="425"

Most states require explicit disclosure about the privacy of personal information you provide to them. For most of us registering a new online account, we feel a sense of safety when we check the "I have read and understand the privacy policy" box after the disclosure statement. (You know, that five page legal document we never read?) However, in states like California, the law only requires that companies tell us what data they collect, and how we can change that data. Yet, many customers feel betrayed if personal data is used for a purpose they had not expected. Half of survey respondents who would not buy again from the hypothetical company cited fundamental loss of trust and moral issues with undisclosed personal data use Thus, the law leaves vendors to decide for themselves how to weigh the benefits of using data to cross-market other products and services against potential customer dissatisfaction.

Asking for Undisclosed Information media type="custom" key="3940823"

The good news is that businesses can appeal to the moralists and the pragmatists if they follow two simple rules: disclosure and rewards. First, the company should always disclose uses of personal information to users, even if not required by law to do so. A real risk is that consumers will withdraw data they might have given freely before. The trick is to reward customers for providing this data, and in most cases this comes cheap. In the survey, respondents willingly suggested rewards they would accept for allowing access to personal data: cash, personalized services, and discounts all made the top ranks. Even more interesting, many consumers would simply accept good recommendations for products to buy!

The following videos serve as examples of disclosure and rewards,

media type="youtube" key="VcP3V9bgUoI" height="344" width="425"

Customer Data Visibility Through Foodsevice Rewards.

media type="youtube" key="9LhC0p0GsXM" height="344" width="425"

Consumers are relatively easy to please when it comes to the kind products or discounts they would accept as incentives to part with data. Online news subscriptions, ITunes, Netflix, IPhone apps, and movies were all popular among the survey group. A companies best strategy for getting good data might even be to ask consumers for specific, useful pieces of information explicitly in return for these small gifts. For example, "what kind of gifts do you often buy for a friend's birthday?" or "When browsing online, rank the following headers for what catches your eye most a) yoga b) baseball c) cuisineart, etc."

Lest you think that you need money to get information, try investing in a good recommendation system. While the buzz in marketing trends has focused on the "word of mouth" revolutions popularized by books like the Tipping Point, consumers increasingly rely on online-sourced recommendations to make purchase decisions or discover new products. In the survey, more than 2/3 of respondents reported they found less than 30% of recently purchased items through friends. While word of mouth can propel one product into the marketing hall of fame, people rely on information gleaned from other sources to make most purchases. Hypersegmenting marketing campaigns that get the right message to the right user are mutually beneficial for advertisers and consumers alike.

Online marketers take heed, find a way to give your users good recommendations about what to buy, and they may reward you with precious drops of personal data free of charge. If you don't have time to invest in a good system, a clear policy on information use and gift of a 99 cent song might get you the happy customer you want with the details you need to sell more.


 * Graphical Data and Links**

Question # 6, 7, 15, 16, 17, 18:

6. Of the last 10 new items you bought, how many did you discover through a friend?

7. Do you pay for any content? If so, for what kind of content ?

15. If you learned that a company uses data you shared for a different purpose, e.g., to trick you to listen to their message, would you be less likely to buy from them?

Of those respondents who provided explanations of the circumstances under which they would continue to buy products from the company, I assigned them into one of two categories. The first categories I called "principle." Respondents in this category indicated that the loss of trust, lack of honesty, loss of reputation, or simply feeling "tricked" by the company was enough reason not to buy from them again. Respondents fell into the second category, "utility," if they indicated that they would still buy as long as the information was used to provide relevant or useful information to them, and on balance did not cost them additional time or money. The breakdown for the respondents was 31 in "principle" and 34 in "utility."

On balance, it seems that as a long as a company provides useful or relevant information to consumers and does not waste valuable resources, 50% consumers are willing to overlook the breach of privacy or unapproved use of information and will continue to buy products from the company. However, no matter how useful that ad, the other 50% of consumers will be less likely to buy based on principle, seemingly regardless of how well the information is used. It might be worth it for companies to simply ask the customers for an explicit "opt in" permitting them to use the information to target ads in the future. While not all customers will opt-in, at least that way you avoid offending and losing the trust of a large chunk of customers.

Of course, it would be interesting to see in practice how many of the principalists actually stopped buying less if the company succeeded in providing relevant and useful ads to them all the time. I suspect that in practice, utility usually wins out over principle.

16. Do you receive marketing messages from businesses via your mobile phone? How do you generally respond to these messages? What are your hopes and fears for marketing via mobile phones?



17. Rank the following 10 items in terms of whether you would give a marketer access. (1: no problem, 10: no way) 18. If you gave a marketer access, what would you consider fair in exchange? Pick a couple of areas and explain: how much cash, what kind of personalized services, ...?



Student(s) responsible for this page (maximum 3 students):
 * 1) Katrina Hui
 * 2) Tayler Cox
 * 3) Xin Shi

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 * Supplemental links to rich meta information is also helpful