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Culnan-Milne Survey on Consumers and Online Privacy Notices reveals online users habits, expectations and needs

December 2, 2001

WASHINGTON, DC- While online privacy notices are a key way for businesses to communicate with consumers, a new survey by Mary Culnan of Bentley College and George Milne of the University of Massachusetts, Amherst, reveals that improvements would benefit both companies and their target audience.

The survey, released today, found that 83% of people do read online privacy notices at least occasionally. Key factors influencing whether or not they read company information in this format are based on the brand or reputation of the company, familiarity with the company or the website, and whether sensitive or unneeded information is requested. Culnan and Milne concluded that online privacy notices help consumers manage risks of disclosing personal information, such as by credit card, but some surfers believe notices are written strictly to benefit and protect corporate interests.

"Basically, consumers tend to read privacy notices but don't find them useful. Current notices are not working for people," said Mary Culnan, Slade Professor of Management and Information Technology at Bentley College in Waltham, Massachusetts. "Notices need to be shorter, simpler and less legalistic. Effective privacy notices can build trust. Surfers want to know what will happen if they give credit card information online? Will their personal information be sold? How can they have their names removed from marketing lists?"

"The study identifies for the first time what people really want to see in a privacy notice," said George Milne, Associate Professor of Marketing at University of Massachusetts, Amherst. "Until now, it has all been intuitive. What we found is how privacy notices relate to branding and credibility. Better privacy notices can help build a trusted relationship between marketers and consumers."

 

Major Findings:

 

Privacy notices are the main way organizations communicate their information practices to consumers. Notices, then, provide one way for consumers to assess the risks versus the benefits of disclosing their personal information to a particular organization. Over the past few years, there has emerged a consensus that all Web sites should post a privacy notice. Prior research has focused on whether or not Web sites have posted privacy policies based on fair information practices (notice, choice, access, and security). This survey and another by the Privacy Leadership Initiative, released concurrently in Washington, D.C. today, are the first to assess consumer attitudes toward these notices.

 

  • The majority of consumers read privacy notices. How often they read notices varies based on the Web sites they visit.
  • Current notices need improvement to be useful. Online users complain notices are too long and too legalistic. A majority do not believe the notices are truthful. Consumers use privacy notices to manage the risk of disclosing personal information online. Better privacy notices may help promote commerce at sites without a strong brand by minimizing these risks.

The majority of online users say they read online privacy notices at least rarely. Only 17% say they never read online privacy notices and 12% say they never read offline notices. Only 8% say they never read either type of notice. This survey did not measure the amount of time spent reading either type of notice.

Consumers read privacy notices to learn about the information practices of the site. A majority of online users agreed that they read online privacy notices when they are using a credit card (78%), the site asks for personal information (73%), to learn if the site shares personal information (67%) or if it is the first time at a Web site (52%).

 

Readers do not differ from non-readers in level of education, Web experience (e.g. buying online), and concern for privacy.

One clear finding of the Culnan-Milne survey is that current notices need improvement. A majority of online users who read online privacy notices think these notices are too long to be useful (68%) and use confusing legal language (53%). Less than half of these online users agree that notices are truthful (34%) or accurately reflect how collected information will be used (28%). Open-ended comments also criticized online notices as being boring, written in print that was too small to be read, and too similar to help consumers differentiate among Web sites.

The survey was conducted online by Harris Interactive within the United States from November 6-8, 2001, among a nationwide cross section of 2,468 adults. Figures for age, sex, race, education, region, income, and weekly Internet usage were weighted where necessary to bring them into line with their actual proportions in the online population.

 

ABOUT THE AUTHORS

Mary J. Culnan is the Slade Professor of Management and Information Technology at Bentley College in Waltham, Massachusetts where she teaches and conducts research on information privacy. She is the author of the 1999 Georgetown Internet Privacy Policy Survey that the FTC used to make recommendations to Congress, and has testified before Congress on a number of occasions. She also served as a member of the FTC's Advisory Committee on Access and Security. In 1997, Culnan served as a Commissioner on the President?s Commission on Critical Infrastructure Protection.


George R. Milne is an Associate Professor of Marketing at the Isenberg School of Management, University of Massachusetts, Amherst where he specializes in interactive marketing and Internet/database privacy. His current research focuses on readability and usability of online privacy notices and understanding cultural determinants of Internet involvement and privacy concerns. Milne conducted two privacy studies funded by the Marketing Science Institute, the Direct Marketing Education Foundation, and the Direct Marketing Association. In Spring 2000, he edited the special issue of the Journal of Public Policy and Marketing on the privacy and ethical issues related to interactive and database marketing.

Contact:

Professor Mary Culnan 781-891-2773 Email: mculnan@bentley.edu

Professor George Milne 413-545-5669 Email: milne@mktg.umass.edu

BENTLEY UNIVERSITY is one of the nation’s leading business schools, dedicated to preparing a new kind of business leader – one with the deep technical skills, broad global perspective, and high ethical standards required to make a difference in an ever-changing world. Our rich, diverse arts and sciences program, combined with an advanced business curriculum, prepares informed professionals who make an impact in their chosen fields. Located on a classic New England campus minutes from Boston, Bentley is a dynamic community of leaders, scholars and creative thinkers. The Graduate School emphasizes the impact of technology on business practice, in offerings that include MBA and Master of Science programs, PhD programs in accountancy and in business, and customized executive education programs. The university enrolls approximately 4,100 full-time undergraduate, 140 adult part-time undergraduate, 1,430 graduate, and 43 doctoral students. Bentley is accredited by the New England Association of Schools and Colleges; AACSB International – The Association to Advance Collegiate Schools of Business; and the European Quality Improvement System, which benchmarks quality in management and business education. For more information, please visit www.bentley.edu

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