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May 19, 2014

Is There a Digital Crisis of Trust On The Horizon?

Posted by Ajay Anand (View Profile | View All Posts) at 10:16 AM

Davos 2014 - The New Digital Context [Source: http://www.youtube.com/watch?v=hgP4cgYo1YE]

Are digital consumers beginning to grow uneasy about sharing their personal information with large enterprises? It's an interesting question that our friends at the prestigious World Economic Forum are attempting to answer. The WEF recently teamed up with Microsoft to study "context." The new WEF study not only looks at how consumers define context but also how organizations can better design context-aware systems that allow for more meaningful online interactions. Individual preferences are complex - no two are alike. So in the era of Big Data, companies are discovering a paradox: Even though they get to see broad brushstrokes painted for them by Big Data, they still need to understand the individual consumer. That's not always the easiest thing to do.

The study tells us that the context in which data is used is not binary - it's "nuanced, personal, evolving over time and reflecting differences in cultural and social norms. There are no absolutes." To that end, I think it's vital that organizations develop the kind of transparency that these many, nuanced views can each appreciate and understand. At the top of this to-do list is the need to empower digital customers so that a circle of trust on the Internet is fully developed.

I have a theory about why the Internet has not totally transformed the life of digital consumers. It's because those consumers cling to devices and systems that cede them a bit of control, whether perceived or not. For example, the typical digital consumer can spend hours on her phone, her tablet, and social networks. But there are still some hours of the day that she's separated from those vehicles - that is, when she is watching television. To be sure, the same technology providers who bring us great experiences on social networks and mobile computing platforms have tried with some degree of success to offer us their versions of 21st-century television. But the TV set is still its own beast. It is its own ecosystem. Large cable operators such as Comcast and DirecTV offer consumers hundreds of different channels and even let them watch those shows whenever they want. Being able to fast-forward through commercials is one of the reasons people are willing to pay premiums for these cable TV packages. Try as they might to infiltrate it, cable TV continues to operate as a successful system that stands apart from the Internet world. Part of that reason involves trust and context.

A consumer knows that for a couple minutes in an hour she must endure television commercials. But paying a premium for cable means she can largely bypass those ads. Because there exists a lot of specialty channels, companies can pinpoint their advertisements and reach the kinds of consumers that once only the Internet could. But beyond that, TV as a business model is such that consumers are fairly comfortable with the kind of information they give up for the entertainment they receive in return.

I think that the World Economic Forum is once again delivering a valuable and thought-provoking study as they delve into the world of digital trust. When consumers begin to feel as though they have some kind of control over the data that they divulge, the sooner they'll be confortable with allowing Internet companies to make more inroads into their personal lives. But consumers are more savvy than we think, which is why they'll hold a certain number of their cards close to the proverbial chest.

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