With data privacy, loyalty programs should not assume consumers are along for the ride

For 20 years the adtech industry built the greatest private global surveillance infrastructure in world history — and then convinced itself that consumers were along for the ride.

Cambridge Analytica and the subsequent regulatory responses around the world, along with Apple's attack on cookies, and Google's attempts to replace them put lie to that assumption.

So is there a risk that brands are walking into the same trap with their huge data troves sourced from their loyalty programs? The emergence of data aggregators who help those programs share private information with other brands looks like a red flag.

It's a question Digital Nation Australia posed to Phil Hawkins, who until recently was the COO of the huge Flybuys program owned by Coles Group.

Hawkins says local consumers have more trust in Australian programs, which have largely acted responsibly, but he also offers caution.

"You walk a very dangerous path, making assumptions that your customers will always be okay no matter what you do. And I think the data sharing thing is an absolutely apt example. And that's why loyalty programs need to over-communicate when they make those changes, not hide it in the fine print. Say upfront, these are the things we are changing. This is why we are changing it. This is what it means for you."

On the matter of consumer reticence and concern, he offers the example of birth dates.

"If you ask Loyalty Program members if we shipped off your date of birth to 35 other trusted partners, how would you feel about that? What they do is, they vote with their feet and particularly on date of birth."

He said during his time running loyalty programs he saw evidence that a significant group deliberately gives a false date of birth, due to concerns about data sharing.

"That's one data field think is really important for loyalty programs to continually poll their customers [about]."