Ovum predicts turbulence for the Internet economy, as more than two-thirds of consumers say “no” to Internet tracking

New research from Ovum shows that the Internet economy is at risk of crumbling. This results from the recent data privacy issues of WhatsApp and the ongoing concerns surrounding Facebook and Google. Google may seem to make your life easier by tailoring search results to your person, but it does so using internet tracking, which essentially traces your online behaviour. Ovum’s research shows that these incidents have significantly harmed the reputation of Internet companies as a whole. Only 14% of consumers now trust that their personal data placed online would not be exploited.

Digital consumers around the world are starting to tire of their personal data being collected across the Internet, says Ovum. The global industry analysts paint a threatening scenario for the Internet economy. Consumers can be expected to seek out new tools (to disable Internet tracking) that allow them to remain “invisible” – untraceable and impossible to target by data means.

Ovum’s findings reveal people find Internet tracking increasingly frustrating

Ovum’s latest Consumer Insights Survey (a detailed 40-question survey covering a variety of topics, including communication trends, social networking, Internet applications, pay-TV subscriptions, and online media) reveals that 68% of the Internet population across 11 countries would select a “do-not-track” (DNT — which bars internet tracking; think Safari’s Preference setting) feature if it was easily available. This suggests that a data black hole could soon open up under the Internet economy. This hardening of consumer attitudes, coupled with tightening regulation, could diminish personal data supply lines. That in turn could have a considerable impact on targeted advertising, CRM, big data analytics, and other digital industries.

“Unfortunately, in the gold rush that is big data, taking the supply of personal data for granted seems to be an accident waiting to happen,” said Mark Little, principal analyst at Ovum. “However, consumers are being empowered with new tools and services to monitor, control, and secure their personal data as never before, and it seems they increasingly have the motivation to use them.”

Recent data privacy scandals such as WhatsApp’s use of address books, and the continuing issues over privacy and data use policies on Facebook and Google websites have fueled consumers’ concerns over the protection of their personal data. Ovum’s survey found that only 14% of respondents believe that Internet companies are honest about their use of consumers’ personal data, suggesting it will be a challenge for online companies to change consumers’ perceptions. Ovum believes that Internet companies should introduce new privacy tools and messaging campaigns designed to convince consumers that they can be trusted. Improving the transparency of data collection and use will help to build trust, a commodity that will increasingly become a sustainable competitive advantage.

“Internet companies need a new set of messages to change consumers’ attitudes. These messages must be based on positive direct relationships, engagement with consumers, and the provision of genuine and trustworthy privacy controls,” comments Little. “Most importantly, data controllers need a better feel for the approaching disruption to their supply lines, and must invest in tools that help them understand the profile of today’s negatively-minded users — tomorrow’s invisible consumers.”