Personal data has become a commodity of immense value in the modern digital era. Companies are keen to gather such data, and although regulatory frameworks like the EU’s General Data Protection Regulation (GDPR) mandate explicit user consent, they do not define the methods through which consent should be sought. Companies, therefore, vary in their approach; some prioritise transparency, while others resort to persuasive strategies, such as offering discounts for personal information.

A significant contribution to this discourse is the research titled “The Race for Data: Utilising Informative or Persuasive Cues to Gain Opt-in?” conducted by Sara Valentini from Bocconi’s Marketing Department, alongside Caterina D’Assergio of Marazzi Group, Puneet Manchanda of the University of Michigan, and Elisa Montaguti of the University of Bologna. This study reveals that merely providing information, though compliant with GDPR, does not necessarily enhance opt-in rates. However, the strategic combination of informative content with persuasive elements, particularly monetary incentives, substantially increases the number of opt-ins.

The research, published in the Journal of Marketing, focused on an analysis of 1,506 re-permission emails from 1,396 firms following the enforcement of GDPR. The findings indicate that while the regulation emphasises transparency, many companies still deploy persuasive techniques, such as offering discounts or rewards, to encourage opt-ins. Specifically, the study found that 26% of firms rely exclusively on persuasive methods, 24% use a combination of both compelling and informative strategies, and the remaining firms depend entirely on informative content.

Further investigation through a field experiment showed that purely informative messages did not markedly improve opt-in rates despite being in line with GDPR’s transparency requirement. Conversely, using a mixed informative and persuasive messaging approach consistently led to better opt-in outcomes across various contexts. Notably, monetary incentives like discounts were particularly effective.

This pattern underscores a vital insight: although compliance with transparency is crucial, users are generally more engaged when companies address their desires or offer tangible rewards. This observation implies that many consumers are prepared to trade their data for immediate benefits despite increasing privacy concerns.

The nature of a company also influences its choice of strategy. Enterprises with a substantial physical presence, such as retailers or those offering tangible products, tend to favour a more persuasive strategy than those operating solely online. Additionally, industries that rely heavily on personal data, such as advertising, are more inclined to integrate persuasive elements into their strategies to maximise opt-ins.

This research has several implications for businesses, consumers, and regulators. Adopting a balanced approach that marries transparency with persuasive incentives is highly effective for companies. However, they must be wary of potential reputational damage if persuasive tactics are perceived as overly aggressive, which could lead to regulatory scrutiny.
Consumers, on the other hand, should remain vigilant and cautious when disclosing personal data. The allure of immediate incentives might cause some to overlook potential long-term risks associated with data sharing.

Finally, the findings suggest regulators may need to consider a more nuanced approach to enforcing GDPR compliance. While the regulation promotes transparency, the prevalent use of persuasive strategies indicates that firms are navigating through a regulatory grey area, adhering to the letter of the law while capitalising on its ambiguities. This situation calls for a refined monitoring strategy that ensures companies comply with the letter and the spirit of GDPR.

More information: Caterina D’Assergio et al, The Race for Data: Utilizing Informative or Persuasive Cues to Gain Opt-in? Journal of Marketing. DOI: 10.1177/00222429241288456

Journal information: Journal of Marketing Provided by Bocconi University