Big data has changed how companies do business. With the collection of massive amounts of data, that data can later be analyzed to find actionable intelligence a company can use to sell more products and increase profits. It’s a very powerful tool to have that can help you transform something that was previously going unused into a source of competitive advantage. This is why two-thirds of all companies have chosen to invest in big data analytics.
While collecting and analyzing this data does have strong advantages, you also have to take some care while doing so. As with anything that could conceivably involve the personal data of customers and other private individuals, you have to be aware that there could be ethical concerns relating to how that data is utilized.
Personalized Advertising
One of the most common applications for big data is as a means to personalize advertising. In the past, advertisements were only deployed through mediums like print, radio, TV, billboards and direct mail. With most of these platforms, personalized advertising was impossible. Instead, ads had to target large swaths of consumers with the hope at least some people would be reached that would be interested in purchasing a product.
However, today, with big data being implemented into digital advertisements, ads can be customized to the point they target specific individuals based on their purchase histories, internet browsing, background, location and more. These ads are often loaded in-browser. In other cases, personalized advertisements are sent via email.
While this may seem like an ethical dilemma in which people would feel their privacy is being violated by these personalized advertisements that seem to know a lot about them, this is not really the case. 75 percent of consumers actually buy more products when targeted with personalized ads. The numbers show that consumers actually prefer this kind of advertisement by and large.
Data Security
Since it has been proven that consumers actually prefer this kind of targeting, it’s doubtful this practice will ever go away at this point until a large shift in business practices or public sentiment alters the status quo. However, just because it’s permissible to gather all this information that can provide insight into the minds of consumers does not mean your responsibility ends there. Being ethical in this case requires that you insure that data always remains protected when it’s not in use.
The consequences for not protecting this sensitive data can be rather severe. IBM has estimated that the breach of sensitive data costs companies $4 million per breach.
A good deal of the cost of this data loss comes later from class action lawsuits from customers who had their information stolen. Hackers are looking for information like credit card numbers and personal information that can be used to steal a person‘s identity. You will be held responsible in civil court for the damage done to your customers if you did not take proper steps to secure that data from hackers, cyber criminals and other digital threats.
Transparency
Some level of transparency also needs to be provided if big data strategies are to be performed ethically. This should include a clear explanation of where the data regarding individuals is coming from whether it’s from user account information, website data extraction software or some other tool.
You should also try to inform people of how their data is used. Often times, it’s best to allow people to opt in to their data being used in such a way. While not everyone reads the fine print on these agreements, not having that fine print explanation for what happens to the data after an internet user agrees to the contract would certainly be unethical.
More data is being produced on the internet than ever before. Companies can take great advantage of this data by collecting it and analyzing it. However, companies should also exert caution. Ethical lapses concerning people’s personal information can have extreme consequences both for consumers and the businesses that use that data.
