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How and Why User Privacy Affects User Retention

June 13, 2019

Users are more educated and aware of their privacy than ever before. Let's look into how we got here, the current state of data collection, and the negative correlation between mishandling your users’ privacy and your app’s user acquisition and retention.

During the early days of the internet in 1991, a software engineer named Lou Montulli came up with the idea of cookies for his browser named Lynx, which would later become Netscape in 1994.

These tiny text files, as we all know today, acted as identifying tags so websites could remember user preferences, and online shopping carts could save what you had previously searched for – among many other uses. Cookies were created with the user in mind and were intended to provide a more streamlined UX for internet users.

Although the original intentions of cookies were benign (and cookies are now basically essential to the function of the entire internet), it set the precedent of tracking and collecting individual user data without oversight, even before the rise of search engines such as Yahoo in 1995 and Google in 1998.

In the age of technology, it’s important for businesses to be transparent about user data they collect and use.

The Surveillance State of the Internet of Things

In 2019, cookies are the least of users’ worries; smartphones track and record our location at all times, devices such as Amazon’s Alexa (as well as our phones) listen in on every conversation, and while we watch our smart TVs, they watch us back.

Mobile apps aren’t immune to these user privacy infractions either. In fact, apps can be some of the worst offenders.

The problem is, many of these (what would normally be considered) invasions of privacy are intended for the benefit of the user; for instance, the omnipresent “sign in with Facebook” feature that comes along with many apps is intended to bring better UX to the sign-up stage of an app. Users are able to start using the app faster and don’t have to worry about losing their username and password

But these benefits come at a cost to privacy.

Facebook: the Stumbling Giant

Speaking of Facebook, let’s take a look at what happened with the social media company’s most recent privacy scandal, the now infamous 2016 U.S. election and Cambridge Analytica.

Launched in 2010, Facebook Graph is an API that allows third-party developers to create their own apps that access user data. This can be implemented in a number of ways. For example, a mobile game would have the ability to post a user’s new high score to his or her profile or could directly upload photos to the user’s page.

On the other hand, Facebook Graph allows for more than just than posting stories or uploading photos – apps can track virtually everything users do, including who they interact with, what they look at, what they like, and much more.

This unfettered access to user data was what gave Cambridge Analytica the ability to collect information on more than 50 million Facebook users, allowing the political consulting firm to craft targeted social media campaigns directed at American voters, possibly helping to swing a national election in a democratic country.

Ignoring these significant erosions to the democratic process, this was bad for business. Facebook has weathered plenty of negative press associated with users’ privacy, but this seems to be the straw that broke the camel’s back.

Possibly the worst thing for any user-based platform or mobile app is users deleting their profile, and that’s exactly what they did. One in 10 American users completely deleted their Facebook profile, and a staggering 26% deleted the Facebook mobile app from their smartphone.

As we’ve gone over in our guide to successful ASO on The Manifest, losing users is just about the worst thing for your app’s ranking on the App Store.

The Psychology of Privacy

Facebook currently espouses retaining younger users as its most pressing challenge, but the platform may want to pay more attention to how its mishandling of user data has affected its bottom line.

In the aftermath of the Cambridge Analytica scandal, 44% of social media users say they still view Facebook negatively, and 37% of people use it less often as a result of the data breach.

How did people's opinion of Facebook change after Cambridge Analytica?

Other research validates the fact that people are gaining a negative opinion of Facebook.

Together, market intelligence firm Creative Strategies and Techpinions found that out of a survey of 1,000 individual Facebook users, 28% said they didn’t trust the social media company prior to the Cambridge Analytica scandal, 35% said they were now less likely to use Facebook, and about one-third changed their privacy settings after the story broke.

For the past four quarters in the U.S. and Canadian markets, Facebook’s user base has remained stagnant at 185 million. As 15% of users surveyed have stated, there is nothing the company can do to regain their trust – this might be a trend that quickly becomes the norm.

Other tech companies such as Apple seem to be taking user privacy more seriously. From publicly announcing that it wouldn’t give the FBI backdoor access to iPhones to removing apps from the App Store that break the company’s privacy policy (sometimes without warning), Apple has taken a hard-line stance on the topic, siding with user privacy.

How to Effectively Market Privacy

It’s no secret that Apple’s marketing is effective, and its approach to user privacy is probably the best route to take.

Under no uncertain terms, the company told app publishers that its apps must fit within its privacy guidelines, and if they don’t, they would be removed; and so far, that’s largely what Apple has done.

While developers and publishers affected by these strict guidelines and removals might form an unfavorable opinion of Apple, users aren’t. The results when Googling “apple removing
apps due to user privacy” are plentiful:

"Apple removing apps due to user privacy" Google search

This is a marketer’s dream campaign – all Apple did was announce it would begin removing apps that violated its privacy policy and then followed up on that warning.

Apple didn’t have to make a follow-up announcement concerning its actions – other companies did it for them. Content strategists know stories about user privacy and violations get clicks, so they wrote stories that gave Apple free publicity.

Every marketer knows word-of-mouth is the most valuable form of advertising, and although it might not be individuals themselves speaking about the App Store’s privacy policy, an unaffiliated news source reporting on a company’s actions is much more influential than hearing it from Apple itself.

Which feels more genuine: “Look at this great thing I did,” or “Look at what this company is doing to protect its users”?

In short, say you’re going to protect your users’ privacy and then actually protect it. People will notice. Your users will talk about it or other companies might, giving you free advertising and a stronger brand reputation.

Be Honest About the Data You Collect

As stated before, there’s more often than not a good reason for collecting user data – the problem is when there’s no context for the data collected.

For example, Uber wouldn’t be able to function without location services, so asking for those permissions is totally applicable and appropriate. A fitness tracker app that requests access to a user’s microphone, however, may not be appropriate.

Just like most of life, honesty (with a heaping side of clarity) is the best policy:

  1. Ask your users for permissions as soon as your app is installed on their device.
  2. Explain the reasons behind the data your app collects in the simplest terms possible and not in your privacy policy agreement (that many people inevitably skip).
  3. Finally, ask yourself: “Does my app really need to access this data to function properly?”

If there are certain permissions that might provide a better UX for your users but aren’t critical to the function of your app, do what you can to make these permissions optional.

It might be scary to front-load all of these set-up steps into your app, and you might fear for your app’s UX, but as we’ve explored in the past, giving your users the ability to say “no” makes them feel powerful, respected, and can even increase your app’s user retention.

Don’t Focus on What You Can Do, Focus on What You Should Do

It’s an easy trap to fall into: The more data you have on your users, the more value you can bring to your platform. This might have worked in the past, but users are more savvy and more aware of their privacy than ever before.

If the unstoppable giant that is Facebook is feeling the heat from its numerous privacy violations and is losing users in western markets because of this, it might be time to listen and learn from the data collection mistakes of the past.

No one likes the idea of their personal information being sold for profit, and the most important aspect of user acquisition and retention is the feeling users have about your app.