Industry associations stress importance of consumer trust as Cambridge Analytica and Facebook data leak unfolds

ADMA and IAB weigh in on how marketers should build stronger data governance and transparency practices

Two of Australia’s marketing industry associations have stressed the need for organisations to put consumer trust front and centre and build more stringent and adaptable data governance practices as scrutiny continues around how 50 million Facebook profiles ended up in the hands of Cambridge Analytica.  

Speaking to CMO following news of what’s being labelled the biggest unlawful use of Facebook data in the history of the company, Australian Alliance of Data Leaders (AADL) and ADMA CEO, Jodie Sangster, said the bright side to being in the Australian market is stronger legislation, such as the Privacy Laws, that ensure more transparency in the event of a data breach or leak.

While she found the Facebook and Cambridge Analytica situation one that’s too complex to comment specifically on, Sangster said it served as a lesson on the importance of transparency. In fact, she suggested it’s a good time for businesses to rethink how they’re letting consumers know what’s happening with their data.  

“It’s about making sure that as we’re collecting data as marketers, consumers are really clear on how that data is going to be used, who it will be shared with, and so on,” she said. “That is required by our Privacy Act. This hasn’t happened in Australia, it’s happened in the US and UK, which have very different laws to us.

“Our laws do require you are transparent about data, who data is going to be exposed to, and how data is going to be used. So there are provisions in place in this country that would probably lead to a different outcome were that to happen here.

“That said, the legal side isn’t the issue; it’s that consumers need to be much more aware about what is happening their data and that transparency piece.”  

What’s obvious is consumer trust is now business critical, Sangster said. “That came out in our recent consumer research at ADMA – the number one factor is consumer trust and that’s built via transparency, and allowing consumers to know what’s happening and to make choices about how their data is used,” she said.

IAB Australia director of regulatory affairs, Kamani Krishnan, agreed it’s blatantly clear data and privacy form the cornerstone of trust for organisations operating today.

“In today's world, data and privacy form the cornerstone of trust in a digital business. The IAB believes in data privacy and increasing trust and transparency in the digital advertising ecosystem. We work closely with key businesses to help them develop their approach to this important issue,” she said.

“It’s imperative companies have the processes, policies and technology in place to prevent any situations of data being compromised.”

It’s not just the legal ramifications, either. Sangster pointed to three buckets for data ‘management’ all brands should be considering as they strive to keep up with consumer data privacy and retain trust. The first is legislative requirements, while the second is having a code of practice and guardrails that can meet and adapt to the changing needs of storing, accessing and sharing data.

The third pillar is brand. “You do need to think ahead and at how consumers are going to respond to this and what the impact will be on the brand,” Sangster said.

“Even if it’s legal, there’s that brand proposition as well, which is what consumer trust attaches itself to. That needs to be front and centre.”

Sangster added the formation of Data Governance Australia (DGA) was driven by the fact that legislation alone can’t keep up with the innovations happening around data utilisation. She pointed out the DGA code now has a clause that states consumer data “mustn’t be used in an unethical way and must be used in line with consumer expectations”.

“There has to be this middle ground of standards put in place by the industry, which take the legislation then interpret it into the environment we are working in today and the practices happening now,” she said.

“That will constantly evolve. It’s not something that stands still… there have to be guardrails that evolve with technology as we employ ever-more different and sophisticated ways of using data.”

Meanwhile, as the data leak unfolds, Cambridge Analytica today confirmed it had suspended its CEO, Alexander Nix, with immediate effect, after Channel 4 secretly recorded and released comments he made on unethical and unlawful data collection practices the organisation would allegedly be willing to engage in.

Dr Alexander Taylor has been appointed acting CEO while an independent investigation is launched into the claims.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu  

 

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