Your Data Privacy Is Worth More Than 65¢… Right?

    March 17, 2012
    Drew Bowling
    Comments are off for this post.

At the beginning of this March, much of the internet was afire due to Google stiff-arming all of their users into a new privacy policy. The policy was roundly scrutinized if not outright decried as being intrusive, draconian, and possibly even illegal in some parts of the world.

Nonetheless, it arrived. It’s been all of fifteen days since it went into effect and what’s the last you heard about it? Chances are you’ve heard nary a peep on blogs or the news sites if Google Trends is indicative of the level of concern sustained in the hearts and minds of consumers. The ascent in number of searches for “privacy policy” mirrors the timeline of when Google announced the new policy on January 24, when news started to really pick up about it being implemented on March 1, and then the subsequent Coolidge Effect following the climax on March 1.

So why did the uproar about Google’s new privacy policy seemingly rise and fall as quickly from the public mind as a “Sh*t ____ Says” meme? Is anybody still concerned about how your data is going to be used by Google or is it really one of those “How I Learned To Stop Worrying And Love The Bomb” cases? Feel free to share your thoughts or lingering concerns in the comments section.

You may not want to hear this, but one explanation for that precipitous drop in interest could be that one in three online consumers only value their data privacy at a whopping 65¢.

I know anyone reading that just emitted a collective “nuh-uh” but it’s true. A new study called “Study on Monetising Privacy: An Economic Model for Pricing Personal Information,” by the European Network and Information Sharing Agency, revealed that consumers aren’t likely to spend more than $0.65 to protect their private information like email addresses and phone numbers.

Sören Preibusch, one of the researchers who worked on the “Monetising Privacy” report, detailed how the study was conducted:

We invited 443 participants into the laboratory where they could shop for cinema tickets. The laboratory experiment was complemented by a field experiment with over 2,300 participants and 139 transactions and observations. The field experiment confirmed the trends observed in the laboratory; the only difference noticed is that in case of no price difference the privacy-friendly service providers which request less personal data obtained a greater market share.

Participants had the choice between a privacy-friendly firm and a privacy-unfriendly firm. Because the tickets were delivered electronically, both companies required a minimum of personal information: full name, date of birth and email address. Depending on treatment, the privacy-invasive seller also requested the mobile phone number or permission to use the email address for marketing. We had checks in place to make sure that correct data was provided.

The majority of participants purchased two tickets and remained loyal to the seller where they had bought the first ticket (93%). The laboratory experiment also shows that the majority of consumers buy from a more privacy-invasive provider if the service provider charges a lower price—50 Euro cents in our case [that’s $0.65 in the U.S.]. A non-negligible proportion of the experiment’s participants, however, chose to pay a premium for privacy. The privacy-friendly firm achieves a market share between 62% and 83% if there are no price differences. 29% of the buyers were willing to pay extra for not having to reveal their mobile phone number; this share drops to 9% for avoiding marketing emails. However, these numbers send a clear message: A sizeable proportion of consumers are willing to pay a higher price for privacy. Online businesses can capitalise these concerns. Privacy-friendliness is a win-win for online retailers and their customers.

While it should be encouraging that consumers will opt for “privacy-friendly” providers when there is no price difference, that much should be obvious; no more than telling a driver to choose a lane of traffic that is gridlocked or a lane where no other cars are present. Further, it’s discouraging to find that people will forgo concerns of their privacy at even the slightest hint of a discount. 65¢? Really? That officially makes you the cheapest date ever, internet users. Your privacy is worth more than that.

The last part of Preibusch’s explanation is telling, though: people are willing to pay to ensure their privacy.

Don’t hold your breath on Google offering up a premium-level account anytime soon that would secure your private information and keep it from being held indefinitely or used in arcane ways. Nobody’s even really sure at this point about the extent with which Google will use your information. Still, as evidenced in the ENISA study, people will go for the cheaper option at the expense of their privacy, and Google knows this. And Google’s products don’t get any cheaper since they’re technically free.

Google itself has proclaimed in the past, “We build Google for you, and we think these changes will make our services even better.” If that’s the case, and the consumer psychology revealed in the ENISA study is taken as true, would all of that privacy policy hullaballoo be solved with something as simple as offering a small fee to upgrade to a secure, non-data sharing account? Google still gets theirs and people’s data stays private.

Then again, if you’re Google, and if you want to evaluate how much users are concerned about the new privacy policy, all you need do is simply glance at the Google Trends and conclude that people probably don’t care all that much anymore so why bother. That privacy outrage is so two weeks ago. Just grin and bear it at this point, right? But even though the anvil is cooling and we’re no longer discussing Google’s privacy policy on a daily basis, the proof remains that “consumers are willing to pay for a higher price for privacy.” This study was conducted before Google struck a nerve with policy advocates around the world, so I presume that the natural inclination of consumers is that they would prefer privacy and might even pay to keep their data under lock and key.

So then, let’s suppose that Google really did listen to the outcry over their new privacy standards. As the ENISA report states, “privacy-friendliness is a win-win for online retailers and their customers.” If Google really did offer up a pro-privacy, premium level account at a reasonable fee but you’d still get all the unfettered access to their services as you do now, would you do it? Given the choice, would you stick with Google’s current privacy model and just continue to use the free services while actually paying for them with your user information?

How much is your privacy really worth to you? Add your comments to our discussion below.

Note: anyone interested in reading ENISA’s full report can download the PDF here.

  • Anony

    If someone (not Google) came up with an email as good as gmail which is totally private and secure I would pay $500 per account per year.

    However, if Google came out with it, I would continue on the free service because paying for the account would require me to give my real name, credit card, address etc. to Google and I no longer trust Google.

  • Mad Bear

    I care alot about my stuff. I have moved to duckduckgo, goodbye google.

  • Guido

    It’s true: people do not care about their privacy anymore.
    I see it on my website: clicks on the privacy policy are 0,002%
    I dont undesrstand people that complain about google’s privacy policy and then post or tweet what did they eat, what did they buy, where did they go or what movie they rented or even worse, they downloaded illegally.
    Facebbok know much more of their users than google. Everything is now social, where social means that you have to let the world know what did you do, even if the world cant care less about it. What is all this fuss about privacy?.
    – G –

  • Steve Kinney

    Privacy? People complain about Internet surveillance every time they are reminded it exists, then promptly forget that it exists. The only reason the European Network and Information Sharing Agency found that people were willing to pay 65 cents for privacy is that their study, by offering a choice between giving up detailed personal info or not giving it up, reminded them that “privacy” issues do exist. “Network illiteracy” is much more pervasive than even “computer illiteracy,” and less than 1% of college graduates can tell you what “information warfare” is.

    Freedom from intrusive surveillance on the Internet does not cost money, it costs about ten minutes of time – and getting it improves browser performance and the accessibility of real information on websites. Install AdBlock Plus in Firefox, manually add a rule that blocks “google-analytics.com”. State using Duck Duck Go for routine searches. That’a all it takes to get off the radar, except when you choose to allow yourself to be tracked.

    In re e-mail “as good as Google”, costs way less than $500/yr. The market price is closer to $10/month. More real e-mail accounts than you can use, more than 50x as “good” as any webmail service, is included in the price of any basic web hosting account. It’s worth the price even if you never use the web hosting and FTP services included in the same account. Compare what Thunderbird can do to the capabilities of GMail – it’s night vs. day.

    As the “public relations” industry learned many years ago, what people believe about their own motives, and what they actually do, are vastly different.

    People complain loudly about “privacy issues on the Internet” but only a small fraction are willing to lift a finger to fix the “problem” they perceive. I include instructions for how to “opt out” of online tracking in my privacy policy statements, right after telling the user that the site uses Google Analytics and providing a link to the Google privacy policy. I do this in the certain knowledge that I am creating a warm fuzzy feeling in the reader with almost no chance that he or she will actually stop Analytics from tracking their behavior for me.

  • http://www.jdppropertymaintenance.co.uk dean king


    If google were a newspaper group they would have been stopped long ago for being to big and powerful having too much of the pie.

    goolge will do what it likes and we cant do anything except withdraw from the www, but that not being feasable.
    you should have just not put real details out there in the first place.

    if you had remembered everything internet is a con, a scam, out to get you, then you wouldnt be worrying who you gave your details to as you wouldnt have done it in the first place.

    privacey is an illusion, your phone is monitored, emails copied, internet usage scrutinised, big brother is watching as always and getting a clearer picture of your life every day.

    • Dobber

      “goolge will do what it likes and we cant do anything except withdraw from the www”

      Hope google is not run by relatives of holo survivors…… 😉

  • http://www.campfirecontent.com/ Charlie

    Yeah, it’s one of those things too many of us neglect to pay attention to, because we don’t want to give up being able to use the Internet and all the positive things it offers. It’s a bit like some of the dangerous pharmaceuticals out there…we know the side-effects can be devastating, even including death in some cases…but, many of them do provide enough positive benefit for people to “take that risk”, I guess.

    Likewise here, I’m sure. Nobody wants to log-off permanently, so we all just “suck it up”, as it were. We know there might be “side-effects”, but the positives must outweigh the negatives…or at least that’s what most of us hope is the case.

    I submitted a query on this topic at WebAnswers (http://www.webanswers.com/technology-computers/internet/google/what-do-you-think-of-google-s-new-privacy-policy-f6096c), and it’s quite interesting to see what others say…much of it centers on the idea that most people never even read privacy (or other) policies…even though there’s plenty of “warnings” that state if we click the check-box that says we HAVE read it through and understand it, then we are held accountable for whatever it says. Oh, the wicked webs we weave!

    I guess this kind of thing just goes to show that our world is becoming more and more “knit”, in a way. If everybody’s privacy is compromised in equal fashion, perhaps that will be a positive thing toward encouraging all of us to behave in ways that we wouldn’t mind the world knowing about. I’m just sayin’…

  • http://glory-in-nature.org Jim Alseth

    I’m not sure how accurate the pricing study is, all I know is I detest predators who use their economic clout to exploit or manipulate. So I’ve closed down all my Google accounts (including Adsense and Adwords) and do most of my search on Bing now.

  • El Wyatt

    The ballyhoo went away mostly because there is really no issue with Google’s policy change. What there was was mostly pushed by Microsoft’s FUD demons and a few privacy groups who were hunting for members. Google doesn’t do anything particularly vile with our data (I believe). Their policy change was transparent and no impact. If you aren’t signed on, they don’t even consolidate it among their apps. Who would ever stay signed on anyway?

  • http://myfreeforextraining.com Ashley Burton

    Need to have these to secure my private stuffs. Hope that this will work smoothly and really keep my data in private.

  • H Wall

    Google (like most portals) started as fun projects by young techies, with an eye to cash in the future.

    We used it for free, knowing that advertising by creator paid the bills. We (users) were okay with that.

    BUT, mining our personal info, for your own profit, with only minimal profit to me (use of you web site), is too much.

    There is a difference between offering me ads and using MY personal info for your profit.

    I dumped Google for this reason. You need more billions zucker, find another way you greedy little weasel (or pay me fairly for what is mine).

    • Steve Kinney

      Um, no, definitely not. Google was started by ambitious young engineers, and early on they received technical help from the NSA, which naturally takes an interest in anyone who is trying to archive the whole content of the Internet and index it for effective search. This relationship was raising eyebrows before anyone but the “techie” community knew that Google existed.

      As a user of Google (or Yahoo! or MSN or…) services, you are not a “customer.” You are a product, packaged and sold to the real customers – advertising and marketing firms. Also – nudge nudge, wink wink – Federal agencies with a surveillance mission.

      Paranoid speculation? Not much. See http://epic.org/foia/epic_v_nsa_google.html

  • chase

    Since when has anything been private on the net?
    Please, name the date and time and year that anything was private on the net? Even for a minute… Name it.

    Once connected, you are fracked unless you take steps to prevent some one looking up and all around your butt hole.

    Privacy on the net is such a pipe dream it isn’t funny.

    Heck, Ebay is so secure and private that once you sign up for an account, start a Paypal account giving your banking info etc that within the hour (if that long) you start reveiving spoof emails and spam.

    And they are continuously knocking out or blocking your means to be private with marketed hype about how “bad” those anonymous surfing methods are, or by hyping that only the “bad” people use those. And you [the public] bought into the hype and agreed to cut off your abilities or limit your abilities to have privacy
    Google just openly announced changes, that’s all. Nothing to right home about in the first place.
    Besides, if you wanted “pricacy” on the web you should’ve bitched a long time ago.
    Little late to bitch now don’t you think?

    The only reason the Politicians got involved with the google change is the announcement that Google was going to “put it all together” – probably scared the piss out most Politicians and Corporate leaders into thinking Google was referring to the crap they had been doing behind closed doors over the net. And they might get discovered.

    lol – wouldn’t that be a hoot….

  • http://glory-in-nature.org Jim Alseth

    Further to the privacy issue, is Google’s practice of manipulating their search results to promote their own products (namely Google+), something they said in their infancy they would never do…

  • ches

    You can’t measure ‘privacy’ in monetary terms and such this is a damn bloody silly excuse for a story.

    Ones privacy is immeasurable and any attempts to exploit that should be met with utter contempt and preferably castration.

    Its a simple solution, no gonads, no more hormones no more hassle.
    You know it makes sense.

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  • http://www.alda-architects.com Alan

    I simply do not use Google for routine searches and certainly do not use Gmail for anything important. Have adblock on Firefox and post up incorrect information about myself. Let them harvest garbage.

    Whilst most people may at present do nothing I think this is doing Google damage. Now it may be a trickle but if they persist with this high handed attitude it could be a flood. It is very easy to change your search engine and there are good alternatives.

  • http://www.captaincyberzone.com Cap’n Cyberzone

    Google is becoming an ad agency. It has created and acquired the outlets and audience. Apparently Google’s crystal ball tells it that now is the time to reveal itself, people have become complacent and distracted enough not to understand or care.

  • Dr Jayanth G Paraki

    I wrote a 50000 word Novel I want to buy Google on NanoWrimo (www.nanowrimo.org)combining fact and fiction. The fact is Nanotechnology is superior to whole lot of internet based enterprises including Google. Consumers have become addicted to the fact that they can use Google for free (enjoy it as long as it lasts!) The trend is now moving to Facebook. My novel revolves around a child with Autism and how she mistakes Google for a toy. She tries to Google and ends up frustrated as she never finds it( after all Google is not a Lego Brand of Toys )This frustration is common among normal adults too as and when they cannot Google to their satisfaction. I am frustrated as i am typing this reply because my morning cup of tea is not yet ready and the sun has already appeared on the horizon! already respond to this

    • http://www.tipsinablog.com Daniel

      You are close to being spot on, Dr. Jayanth.

      I think Google has spoiled us. I looked at my numerous Google accounts, the number of products, apps, etc. How much time I spend “Goggling” Soon I may not make any important decisions without running it by Google first.

      All hail Google!

  • Jeff

    I changed my default search engine to vroosh search after google implemented the privacy changes because I disagree with them. I don’t trust google anymore.

  • http://www.tipsinablog.com Daniel

    The amount of privacy you have online would be equivalent to the amount of personal details, you have quite happily submitted for public viewing. No more, no less.

    Certain personal details are not available, if you have NOT submitted them for viewing. Whether through social sites, business, etc, etc.

    There are well known people who, despite their huge public presence, have close to zilch personal details available. Apart from a ” tell nothing” two paragraph bio”

  • Raymond Moser

    What a rhetorical defense of Google. Why don’t you look at the data pointing to actions of consumers to flee Google or cut back on their use of this authoritarian monopoly that manipulates the truth. I am a former Communications Instructor and Organizational Communication Consultant. Google lost much of their sparkle with their move. It will effect their bottom line.

  • Dr Jayanth G Paraki

    I am inclined to agree with Daniel. Google is not as predatory as it is imagined in some quarters. They too are struggling with many issues related to business competitive advantage. This was reported by Techcrunch in 2011.”Google Shuts Down Medical Records And Health Data Platform”. oogle is shutting down Google Health, which enables you to store and manage all your health information in one place on the Web. Google says the platform simply wasn’t having the ‘broad impact’ necessary to sustain the product. Now with their own admission about their inadequacy Privacy and Policy Issues have never been more important for the World Wide Web is the 24×7 Home for many cyber citizens numbering millions!! I don’t know for a fact if Google has actually shut down Google Health but it is believed they are trying out a new recipe and concocting another algorithm.

  • weasle

    I, have a gmail account, that I use only for unknown sites that ask too much info. So, gmail is good for spam. Seems, like google is listening to big brother. Gather all info for their database, so the can keep tabs on us citizens. What?? I, did not know I moved to communist nation. That’s big brother, for you. Big brother, if your are listening Kiss my ass.

  • http://www.youtube.com/watch?v=jtv1lJteovM Plenty

    I have watched Google transform and morph from the beginning. They are definitely headed in the wrong direction. Someone needs to bankroll the creation of a new search engine which provides what Google used to: nothing but accurate results

    I’m sick of this la-di-da happy-land everything-social internet. Its all a charade, not the real internet. Social internet is not for the people, its for the big corps to better track consumers.

  • Mary Tsolak

    I have switched to Go Duck Go for my primary search engine. I still use Gmail but only as an address for things that might send me junk mail. 90% of the mail that I get there gets deleted unread. I have a website and pay 6.99 a month for that and use the free e-mail boxes there for my private coorespondence. I see no ads and no one is mining the content of my email for information as to what ads I might respond to. It is worth the money to me.

  • JC

    I paid apple for me.com and never regretted it. I would gladly pay Google $50.- or $100/yr (for a ‘family membership’) to be a “paid user” and know that my data was NOT being collected or mined. They could even keep sending me ads. The only thing I object to in principle is that my data is linked to my account and / or my IP number. The idea that it remains so for even hours is offensive to me; forget months or years.
    I have stopped or reduced my use of things google and use alternatives at each opportunity. No more Picassa, no more sketchup, gmail just forwards, and for most searches duck duck gives me all I need. I wont even be looking at G-drive or chrome. I do this with sadness. Back when I believed in the ‘do no evil thing’ I actually used to parse the ads. Now I studiously ignore them. This stuff does matter to me.

  • Dobber

    Shhhh!….. don’t tell me you are selling this secret for $19.99?

    Here is another secret you can sell for $99.99 – today’s fortune 500 company CEO’s gets their paycheck becuase of Fed, without fed they will be jobless…. think.