Persuasion vs. transparency: How GDPR shapes data consent strategies

A new study published in the Journal of Marketing reveals how firms are navigating GDPR (the European General Data Protection Regulation) compliance, striking a delicate balance between persuasion and transparency to gain consumer data consent. The study shows that while 50% of firms rely on persuasive or blended cues to boost opt-ins, these strategies can pose risks to reputation and trust, particularly after data breaches or regulatory scrutiny.

The study, “Political Polarization Triggers Republicans’ Misinformation Spread to Attain Ingroup Dominance,” authored by Caterina D’Assergio (Marazzi Group), Puneet Manchanda (University of Michigan), Elisa Montaguti (University of Bologna), and Sara Valentini (Bocconi University), highlights the implications of these strategies for businesses, regulators, and consumers.

“Many firms focus on maximizing opt-ins by leveraging persuasive cues, but these approaches can sometimes undermine the very trust they seek to build,” says Valentini. “Our findings show a clear divide in how firms approach GDPR compliance, particularly between industries and business models.”

Key Findings

The study analyzed nearly 1,400 firms across industries and channels and conducted field and lab experiments to examine the effectiveness of opt-in strategies. Key insights include:

Widespread Use of Persuasion

26% of firms rely solely on persuasive cues, while 24% blend persuasive and informative elements.

These blended strategies were the most effective, significantly increasing opt-in rates compared to transparent messaging alone.

Costs and Benefits

Persuasive cues provide firms with increased access to consumer data, enhancing monetization potential. However, they also carry risks, such as reputational harm and regulatory penalties, particularly for high-visibility brands with a history of data breaches.

Industry and Channel Differences

Firms with physical stores or selling tangible products are more likely to use persuasive cues to gain a unified view of their customers across channels. Digital-first businesses lean towards transparency, leveraging their existing online presence to collect data with less effort.

Lessons for Policymakers and Firms

The findings suggest that GDPR, while designed to ensure transparency, has inadvertently encouraged firms to rely on persuasive strategies. Manchanda notes, “Policymakers need to consider how current regulations might incentivize firms to prioritize persuasion over true transparency. Guidelines should balance the need for data protection with practical compliance.”

For firms, the study offers critical lessons:

Weigh the Risks: Firms must carefully evaluate the trade-offs of persuasive tactics, especially in industries where trust is paramount.

Leverage Incentives: Monetary incentives, when used transparently, can boost opt-ins without undermining trust.

Balance Channels: Businesses with physical stores should integrate omnichannel insights while maintaining ethical opt-in practices.

Call to Action for Stakeholders

The study underscores the need for collaborative solutions. Policymakers should refine GDPR guidelines to reduce reliance on manipulative tactics while ensuring fairness in data practices. Firms must prioritize long-term trust over short-term data gains, and consumers should remain vigilant about how their data is collected and used.

“Ultimately, the challenge is about finding harmony between effective data collection and ethical transparency,” says Montaguti. “Our study provides a framework for stakeholders to navigate this complex landscape.”

Full article and author contact information available at: https://journals.sagepub.com/doi/10.1177/00222429241288456

About the Journal of Marketing 

The Journal of Marketing develops and disseminates knowledge about real-world marketing questions useful to scholars, educators, managers, policy makers, consumers, and other societal stakeholders around the world. Published by the American Marketing Association since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline. Shrihari (Hari) Sridhar (Joe Foster ’56 Chair in Business Leadership, Professor of Marketing at Mays Business School, Texas A&M University) serves as the current Editor in Chief. https://www.ama.org/jm

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