Should Chief Marketing Officers be involved in security and privacy decisions?

In a report issued today by PricewaterhouseCoopers, the management consulting firm urged Chief Marketing Officers to get more involved in data protection.

"In a lot of organizations, it gets relegated to an IT problem or an IT function," said Carolyn Holcomb, PwC's data protection and privacy leader.

She also recommended that CMOs be brought into the budget and strategic discussions at an earlier point.

"One of the key things that we recommend in this space is a strong data governance program," she said, "A C-level committee that is responsible for making data decisions -- and the CMO and the CSO need to be joined at the hip on that committee."

That includes involving the CMO in discussions about how data is collected, how it's secured, and how the company is complying with laws and regulations.

"What we're seeing is that the CMO is not brought into those conversations, or not brought in early enough," she said.

The CMO has several areas of interests when it comes to data protection, beyond the obvious issue of having to save a company's reputation if there's a data breach.

But the CMO should also be involved in creating and enforcing a data privacy policy, she said.

In this year's US Consumer Confidence Index survey by Harris Interactive and TRUSTe, Inc., 89 percent of respondents said that they avoided doing business with companies who they did not believe protected their privacy online.

Meanwhile, according to the 2014 CMO Survey from McKinsey & Company, Duke University's Fuqua School of Business, and the American Marketing Association, 41 percent of companies use consumer information collected online for targeting purposes, and 81.7 percent of CMOs expect that practice to increase.

CMOs need to be careful so that the increased use of customer information doesn't backfire on the company.

According to the PwC report, that means understanding what privacy promises the company already made to its customers and the laws it needs to comply with, creating a culture of privacy that puts privacy protection on every marketing agenda -- especially those that involve outside vendors.

When it comes to creating new marketing initiatives, privacy should be a requirement from the start, rather than added on at the end.

The report also warned CMOs to be careful about combining different sets of data.

"An organization might collect emails in one place, credit card numbers in another place, shopping preferences in another place," said Holcomb. "And the key is when you aggregate that data, you now create a new privacy concern that previously you didn't have."

Customers might have agreed to the collection of data at each of those separate points, but when the data is aggregated it can be used in different ways than originally intended, or that the customers may have expected.

"It's not that companies can't do that," she said. "They can use that data to their advantage, they can monetize this data -- but it has to be very clear to the customers."

Next, the report suggested that companies make it easier for their customers to see what data is being stored, and give them a way to control how it is being used.

According to a recent PwC survey, 87 percent of customers said they wanted to be able to control the amount of information shared.

The report recommended that CMOs use a company's privacy as part of their marketing efforts, and promote it to customers to demonstrate responsibility.

And the communications need to go both ways -- PwC also recommended that companies create a way for customers to provide feedback about privacy issues, such as whether personalized marketing was helpful or too intrusive.

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