Look around you – there are so many things that were once considered necessities. This includes answering machines, alarm clocks, maps, VHS tapes, CDs, and so much more have all been replaced by smartphones or tablets. Digital advancements have dematerialized our world. The tools people need are no longer represented by physical belongings – they’re now accessible through smart devices. Each person today is represented by individual pieces of data called PII or Personally Identifiable Information.
As of 2021, there are about 4.66 billion active internet users in the world, so it only makes sense that user privacy has become a serious concern. We all know that staying offline is not a viable option; it’s probably close to impossible for a 21st-century person! Businesses, government, schoolwork, research, and even friendly interactions all take place within a digital realm. It seems like everything in our lives has been reduced to some sort of digital aspect. So, let’s start at the beginning. What is PII?
Types of PII
Now that you know what PII means, let’s talk about the 4 most common types of data that companies collect from you.
1. Personal data: This category includes information such as your Social Security number and gender. As well as your IP address, unique device ID, and web browser cookies.
2. Engagement data: This type of data lets companies see how you interact with their website, their mobile apps, text messages, social media pages, emails, paid ads, and customer service routes.
3. Behavioral data: This category includes transactional data such as purchase histories, product usage information like repeated actions, and qualitative data like your mouse movement.
4. Attitudinal data: This category includes metrics on consumer satisfaction, purchase criteria, product interest, and more.
With all these different types of consumer data, you may be wondering: who’s sorting through it all? Humans cannot analyze and sort through such large quantities of data. That is why more often than not, computers are the ones that are analyzing the data that companies extract from your smart devices. Unlike humans, computers can work 24/7, 365 days a year, and they can even offer recommendations to companies based on their findings.
Some people believe that the only way companies can extract personal data from them is if they fill out an online form or sign-up for an account of some sort. But this is not the case. There are different ways that websites collect your data. For example, each time you visit a website, it can make a record of your computer’s ID and IP address which are unique to your device and can be traced back to you. Websites also utilize cookies, which are small text files that collect and store information on your hard drive for tracking. They store data such as:
- how many times you visit a website, and which pages you visit
- your preferences, such as your preferred language, font size, and accessibility services
- your username and password
- items in your shopping cart
- and your location
Your smartphone also has many identifiers built into them that allow phone manufacturers, mobile service providers, and Wi-Fi providers to collect personal information from you. The apps that you install on these phones can also notify app developers, advertisers, and data brokers about your unique habits. When you’re using your GPS, connected to Wi-Fi, or have your Bluetooth services turned on, you are also more susceptible to sharing your personal data
Let’s say you download the Target app, and you enter a nearby Target store while using the app, and you also happen to have your Bluetooth or Wi-Fi turned on. The store can automatically start tracking your every move as you’re browsing its aisles and start sending you ads within the app that are for products right within your reach. You’re probably starting to see why many people are taking data privacy so seriously. It can feel a little bit invasive!
How Comapaies Use PII
Now that you have a better idea about how your information is being collected, you may be wondering about how your information is being used. Here are just a few ways companies utilize your personal data:
1. Improve their customer experience
Many companies use consumer data to better understand your needs and wants. Your browsing habits and other personal information can give companies a better idea of what you’re looking for, and a better, more compelling way to reach you. Since each customer has their own individual preferences, your information can help companies create customized promotions and special offers.
2. Redefine their marketing strategy
Consumer data allows companies to understand how you’re engaging with their marketing campaigns. Based on the actions you complete, companies can gain a better idea of who you are as a consumer, and if their strategy is effectively targeting you. This data allows marketers to segment their audience, and target only those people who they feel are most likely going to engage with their products or services.
3. Transform data into a steady cash flow
Companies that collect your data can profit from it. Data brokers or data service providers that buy and sell user information are part of a profitable industry. By 2023, Statista reports that the big data industry will be worth an estimated $77 billion. Advertisers like to purchase PII because it allows them to target the most optimal consumers. Today, the demand for more accurate data is increasing, and the more personal information data brokers can collect from each user, the more thorough data profiles they can generate. These data profiles can then be sold off to other data brokers or advertisers.
4. Secure private information
Some companies use consumer data as a means of securing sensitive information. Think mobile banking apps that ask you to unlock your account with a Face-ID. These types of data collection minimize the risk of fraudulent attempts and serve as personal identification measures.
Data Privacy Laws
So much consumer data is captured and collected on a daily basis that governments have started crafting strict data privacy regulations that are aimed at restricting the amount and the type of PII that is collected. For example, the European Union’s “General Data Protection Requirements” or GDPR, lays out strict rules for data capture, storage, usage, and sharing. Even though this law was drafted and passed in the European Union, it affects anyone who tries to target or collect data related to people in the EU.
GDPR forces organizations to ensure that all data is collected legally, and if companies don’t comply, there are strict repercussions such as large fines that can range well into the multi-millions. But GDPR has come somewhat under fire because it seems to be doing an adverse job at confining the power of large corporations. The strict regulations it enforces have actually pushed advertisers to give their business to tech giants they trust like Google and Facebook because they have the means to collect and process consumer data. As a result, smaller companies have found it harder to compete against larger corporations.
Data privacy rules have also made their way over to the U.S. in the form of the “California Consumer Privacy Act of 2018”, or CCPA. This Act applies to both businesses and data brokers and is somewhat similar to GDPR but differs in that it requires consumers to opt-out of data collection rather than putting the responsibility solely on service providers. CCPA gives consumers:
· The right to know about the information a business collects from them and how it’s being used or shared
· The right to delete PII that has been collected from them
· The right to opt-out of their information being sold off
Moving forward there will likely be more governmental measures that will be imposed upon data collection and digital targeting. However, data collection is essential for businesses that want to remain competitive well into the future, and failing to do so will only hinder their long-term success.
As advancements in technology become more innovative and as we progress further into this digitally sophisticated era, more and more companies will figure out different ways to capture, collect, and utilize our personal information. Sometimes this information is put to good use, but sometimes it can be unethical and raise some eyebrows. It’s important for us to find a balance, one that takes into consideration user concerns as well as marketing benefits.