You may think of the Millennials as the oversharing generation, but contrary to their unabashed seflies and promiscuous use of social platforms, they’re not entirely comfortable living in a post-privacy world. Compelling insights into this demographic suggest what you think you know about those born between 1980 and 2000 might be wrong. In fact, some think Millennials will spearhead the turn towards privacy.
Companies take note: Integrated Advertising Agency Barkley estimates this group of 80 million 18-to-34-year-olds commands $200 billion in annual buying power and will soon make up roughly 70% of the workforce. Given the economic clout of this younger generation, companies would be wise to understand how Millennials truly feel about their personal information and make privacy a priority.
What’s Behind The Millennial Premium On Privacy?
It’s crucial to understand that Millennials born after 1994 (sometimes referred to as Generation Z) have never known a “pre-Internet world.” All have grown up in the context of the personal computing revolution, and they’re more concerned about what advertisers know about them than the government.
Millennials are known for mulitasking, their entrepreneurial interests, and a strong desire to be connected 24/7. It’s no surprise they tend to be good at networking. Despite a willingness to share, it can be a mistake to interpret this as a sign of trust. In fact, a March 2014 Pew Research report revealed some fresh perspectives on the true nature of Millennials. One key point the report makes:
“Millennials are less trusting of others than older Americans are.” When asked ‘Generally speaking, would you say that most people can be trusted or that you can’t be too careful in dealing with people,’ the survey respondents reported as follows:
‘Most people can be trusted’
• 19 percent of Millennials
• 31 percent of Generation Xers
• 37 percent of Silents (aged 69-86)
• 40 percent of Boomers (aged 50-68).
In a May 2014 “Privacy in Perspective” Study conducted by Contagious Communications and global insight and brand consultancy Flamingo, research revealed that Millennials are redefining privacy as a fair value exchange and are exceedingly wary of brands that abuse this exchange. According to Arunima Kapoor, Associate Director at Flamingo,
“Young people are increasingly aware that their information has value, and brands regularly trade in it to their advantage. But there is a disconnect between the value people place on their information and brands who trade in it. They are demanding a fair exchange and want to negotiate the terms to mutual advantage.”
For Millennials, brand loyalty doesn’t trump privacy. In fact, the study showed that Millennials are 28 percent more likely to switch products or services because of privacy concerns than the rest of the population.
Additional findings revealed they are more willing to pay a premium for privacy:
• In the UK, 45 percent of people aged 18-34 would be willing to pay a premium in exchange for total confidentiality when buying products and services online. (This compares to 30 percent of the population, and 22 percent of people aged 45-54.)
• 25-34 year olds in the UK would pay a privacy premium of 30 percent. Meanwhile, those aged 34-64 would only pay 18 percent more.
Global market research firm GFK confirms the value of privacy in the marketplace and the varied views across generations. An IAPP summary article of the report states “almost 80 percent of respondents feel that there should be more regulations, preventing organizations from repurposing personal data to third parties.”
Some of the most compelling findings from the full GFK report (PDF download) include:
• There’s a generational gap between Millennials and Boomers on their level of concern toward their personal data.
• Recent data breaches have impacted Millennials, Generation X and Boomers and their consumer tendencies.
• Overall, 88 percent of respondents are somewhat to very concerned about the protection of their personal data, and this trend spans all generations. 47 percent of Millennials reported being very concerned, 26 percent a little concerned about the protection of their data.
• Boomers and Pre-Boomers are more protective of their online activities when compared to younger generations. Similar to Boomers, Millennials seem to be more concerned about online banking. • One-third of the respondents had been affected, at least once, by the misuse of personal data in the past year. For Millennials in particular – 10 percent responded yes, several times; 24 percent responded yes, once.
• Consumers’ trust is not shared equally across all organizations. Marketers and advertisers, international businesses, and social networks are the least trusted with personal data.
• There is a significant gap between older and younger generations on trust in online social networks. Pre-Boomers and Boomers have distrust levels above 60 percent, while almost 60 percent of Millennials trusts them completely.
Tips For Making The Most Of Millenials’ Privacy Perspectives
So what steps should companies take if they want to earn the trust and respect of Millennials? Here are some tips:
1. Don’t assume Millennials consider privacy obsolete. The research says otherwise. Though it may be tempting to view sharing as trusting, don’t believe it. Besides, baking privacy into your business can give you a competitive advantage.
2. Be transparent. Offer privacy choices. Millennials are more mistrustful from the start and will switch products if they feel you’re abusing their trust.
3. Respect the idea that their information has value and that privacy may command a premium. Demonstrate the value proposition and how they’ll benefit from sharing information with you.
4. Don’t alienate Millennials by manipulating data in secret or unexpected ways. They know you’re collecting information and using it to inform your decisions, but there will be a backlash if you’re not clear about how you’re using their data. (Facebook and OkCupid have recently been under fire for tailoring feeds and conducting research without their users’ knowledge.)
Millennials want a future which includes privacy and they want it now. How are we going to give it to them?