According to a recent survey, 62% of U.S. and Canadian companies don’t inform customers that they allow tracking code from third-party services on their websites, despite the majority claiming to have well-defined consumer data privacy policies that are strictly applied. Conducted by CRM Essentials and commissioned by global technology company Zoho, the survey results reveal how frequently unethical data collection tactics are used to capture information that's lucrative for advertisers, such as a user's site behavior, location, or device type. Furthermore, the findings expose glaring gaps in policies that don’t adequately protect consumers or give them control over how their data is collected when they go online or use business software.
Polling more than 1,400 business leaders at companies of varying sizes and industries, the survey found that third-party ad tracking is ubiquitous — 100% of respondents said their companies allow it, and 57% are "comfortable" or "very comfortable" with the way third-parties use customer data. Out of 1,220 respondents willing to share thoughts on their data privacy policies, 55% claim to have well-defined consumer data privacy policies that are strictly applied. The findings also show that the more a business relies on surveillance data to drive revenue, the more comfortable they are with the practice.
What's more, the majority of businesses do not see it necessary to inform customers that they are being tracked. B2B businesses are more likely to keep third-party ad tracking secret from customers, with 72% admitting they know tracking happens and don’t inform customers, compared to 58% of B2C respondents. This business practice is also true in California, the only U.S. state with a consumer data privacy law. Nearly 70% of California companies don’t inform customers that they allow third-party ad trackers on their websites, yet 56% say their company has a well-defined, documented policy to customer data privacy that is strictly applied.
"User tracking to serve ads has turned into adjunct surveillance, a term we use at Zoho when companies collect data without consumer knowledge. This trend started with B2C services, but it’s alarming to see it has carried over to the B2B world, especially given how essential SaaS solutions are for working remotely during the pandemic. If you’re using a free service, you’re paying for it with your data. That includes free B2B software and mobile apps you might be using, and we need companies to be transparent with customers about how they track users," explained Raju Vegesna, Chief Evangelist at Zoho.
Awareness Level: Most Businesses Can’t Plead Ignorance
While the lack of transparency means consumers may be none-the-wiser to companies using third-party ad trackers, the majority of businesses say they are well-informed:
- 85% are aware that some third-party code automatically installs tracking code onto its website from companies they have no direct relationship with
- 68% said third-party vendors had done a "good" or "satisfactory job" in explaining how the data they collect from digital properties are used
- B2B respondents were twice as likely to say third-party platforms have done a "good" job explaining how their data is being used than B2C respondents
Comfort Level: Ad Trackers Impact on Sales
The findings also show businesses that depend on third-party ad platforms to drive sales are more likely to be comfortable with how third-parties use the data:
- 36% said third-party ad platforms are the primary factor in their ability to meet sales goals
- The same group was nearly four times more likely to say they were "very comfortable" with how third-party ad platforms use data they collect
- Companies that said ad platforms are not a factor in meeting sales goals were almost five times more likely to know that some software automatically installs third-party tracking code onto its website
"It's no secret that data is valuable for powering personalized ads, but we were surprised to find how comfortable companies of all sizes are with unethical data collection methods that leave their customers in the dark and their information in potentially dangerous hands," said Brent Leary, co-founder and partner of CRM Essentials. "It will be interesting to see how shining a brighter spotlight on third-party ad trackers impacts future business models. As more of our interactions take place digitally, organizations will have to recognize how important safeguarding data is to the overall customer experience. And business leaders will need to weigh the risk of consumer backlash and regulatory compliance issues against the benefits of revenue from surveillance data"
"Zoho has never sold its customers’ data and never will. We also don't monetize the behind-the-scenes analytics in any shape or form. That means we leave money on the table, but just because it’s there doesn’t mean you have to take it," said Vegesna. "We’re proof that you can be successful without profiting off selling consumer data to third-parties."
Posted by Veronica Silva Cusi, news correspondent
About Zoho Corporation:
Zoho Corporation founded in 1996, is located in Chennai, Tamil Nadu, India. The company was founded and headed by Sridhar Vembu. who earlier worked in Qualcomm USA.
Published: Wednesday, December 23, 2020
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