Study: Web-Savvy Consumers Wary of Data Loss

A new report Friday casts doubt on notions that customers will opt to provide personal information once they know they’re getting personalization in return.

In May, New York-based research firm Cyber Dialogue released a survey suggesting that personalized sites and Web services were more efficient in landing new customers.

But a new report from Westfield, N.J.-based Statistical Research, Inc., suggests that even veteran Web users are wary about giving their personal information to sites.

According to SRI, 65 percent of experienced Web users typically abandon a site when they discover that it requests personal information. That figure is slightly higher for users new to the Web.

In addition, one in five Web users has entered false information to gain access to a site, the study found.

SRI said about half of the users it interviewed said they were “very concerned” about the misuse of their credit card information, about the selling or sharing of personal information by Web site owners, and about cookies that track consumers’ Internet activity.

That’s bad news for much of the Web marketing and e-commerce industry. To date, providing personalization — a la Amazon.com’s “Your Recommendations” area — has been seen as a way to convince users to give up their information, which can then be used for marketing purposes like targeting deals, analyzing users’ demographics or habits, or resale.

It’s also an ominous finding for the online ad industry, which faces something of a pending crisis in the upcoming version of Microsoft’s OS if it makes it easier for users to turn off cookies (or if it blocks cookies as a default option.) If users are so worried about unscrupulous marketing practices, then trusting them to opt-in to marketing (or to intentionally not opt-out, as the case may be) could be dangerously naive.

But the report also identifies a possible solution — and the good news that many Web marketers are already following it, to an extent. Twenty-six percent of Web users also said they would be “much more likely” to give personal information to a site with a prominent privacy policy.

Additionally, 28 percent said they would give data to a site if it has a guarantee against credit card fraud. Furthermore, the report suggested that Internet users are more likely to trust Web sites for chain stores where they shop or for products they buy.