In today’s digital age, data breaches aren’t just technical issues — they’re trust issues. High-profile incidents, like those involving Optus and Medibank, and more recently Ticketek and Qantas, have significantly eroded consumer trust. With Australia’s Privacy Act reforms on the horizon, it’s crucial for marketers to reimagine engagement strategies to better meet consumer expectations on data privacy.

Many of our clients operate in the digital space, where good data governance is essential. We have found that many feel disempowered about how to handle these conversations or know how to communicate with their customers to build trust. This challenge drove us to explore the relationship between data privacy and brand integrity.

Our third wave of insights, ‘Brands Beyond Breaches: A Brand Playbook for Privacy Protection’, speaks to 1019 Australians and provides a comprehensive look into this issue, highlighting key challenges, lessons learned and actionable insights for marketers.

The growing distrust

Our research reveals a significant rise in distrust among Australians towards companies handling personal data. Consumers are bombarded with news about data breaches, with 1.8 million Australian user accounts leaked in the first quarter of 2024, leading to a pervasive sense of vulnerability.

Key findings show that:

• Distrust is increasing across industries: Social media platforms, in particular, are viewed with heightened suspicion. A history of data misuse or breaches severely undermines consumer trust, presenting a challenging recovery path.
• High sensitivity to personal data: Consumers are especially protective of biometric, address and location data, viewing these as highly sensitive.
• Impact of data breaches on trust: High-profile breaches have a lasting impact, with many consumers indicating they will never trust the affected brands again.

Lessons from data breaches

It takes years to build brand trust, which can be destroyed overnight in the case of a poorly handled data breach. The repercussions of data breaches extend beyond immediate financial losses, they fundamentally alter consumer perceptions. Our research highlights several key lessons for companies:

1. Transparency is crucial: Consumers demand clear and accessible information about how their data is used. Nearly 88 percent of Australians want greater clarity on data usage intentions.
2. Swift and honest communication: In the event of a breach, prompt and transparent communication is essential. This includes detailing the nature of the breach, what data was compromised, and the steps being taken to address the issue.
3. Proactive security measures: Brands must go beyond compliance, demonstrating proactive security measures such as end-to-end encryption and real-time security monitoring.

Proactive communications, such as those from Village Cinemas to VRewards members are a great example of how to effectively communicate an alignment between business objectives and the best interests of the customer. This approach not only reassured customers but also reinforced the company’s commitment to data security.

Personalisation vs. privacy

While personalisation has been a cornerstone of modern marketing, our research indicates a shift in consumer priorities. A significant 77 percent of Australians now prefer privacy over personalisation. This shift is driven primarily by a perception that businesses are not providing adequate value in exchange for personal data.

Key findings point to lessons to improve consumers entrusting their data to companies:

• Minimal data collection: Consumers are more likely to trust brands that collect only the necessary information. Over-collecting data leads to increased suspicion and distrust.
• Clear opt-in choices: Offering clear opt-in choices for data collection and allowing consumers to customise their data-sharing preferences can enhance trust.
• Communicate benefits: It’s essential for brands to clearly communicate the tangible benefits of data sharing, ensuring consumers see value in the exchange.

We need to ask ourselves, what information are we asking for unnecessarily? For example, brands have developed habits such as asking for a date of birth, in order to provide an incentive or reward. While the intention is positive, a little bit of creativity can uncover ‘data proxies’ that could be used that don’t require asking for unnecessary personal information. Temple & Webster smartly uses the anniversary of their customers creating an account to provide similar value. 

Spotify’s “Wrapped” campaign is a stellar example of leveraging data for positive customer engagement. By curating personalised experiences based on user data, Spotify not only enhanced customer excitement and talkability but also built trust through transparency about data use.

Bridging the knowledge gap

Educating consumers about data security is critical. Our findings reveal that many Australians are unaware of how to secure their personal data and what steps to take if their data is compromised.

Brands can play a pivotal role in bridging this knowledge gap by:

• Promoting best practices: Actively promoting best practices in data security, such as using strong, unique passwords and enabling two-factor authentication.
• Providing user-friendly tools: Develop tools that assist customers in managing their data, such as password managers and security alerts.
• Simplifying privacy policies: Ensure privacy policies are clear, concise, and easy to understand, helping consumers make informed decisions.

Bagcheck (a brand now acquired by X) added a ‘Plain English’ section to its terms and conditions, making complex legal language more accessible. This simplification helped users understand their data rights and responsibilities, reducing cognitive strain and fostering trust.

Looking ahead

As the risk of data breaches becomes more frequent, the onus is on brands to adopt robust data protection measures and transparent communication strategies. Here’s how brands can stay ahead:

1. Prepare ahead: Focus on proactive education to equip customers with the knowledge and tools they need to protect their data.
2. Transparent assurance: Share details about your brand’s security measures and privacy features openly, reinforcing your commitment to data protection.
3. Stay alert: Keep a vigilant eye on industry trends and breaches in the news to stay ahead of potential threats.
4. Be ready: Develop a communication plan and conduct regular simulations to ensure your organisation can manage and mitigate a crisis efficiently.
5. Manage swiftly: In the event of a breach, act quickly to inform customers and provide ongoing updates about the corrective measures being taken.

We now live and operate in an era where consumer trust is fragile and data breaches are rampant. Marketers must prioritise transparency, proactive security measures and clear communication. By aligning strategies with consumer expectations and regulatory requirements, brands can build resilience and maintain trust in the digital economy.