Addressing Consumer Privacy and Security Concerns in Email Marketing

Pam McHugh

President

Mintel Comperemedia

Monday, March 16, 2009

Agenda

Consumers’ Security & Privacy

Concerns

How to Alleviate Consumers’ Concerns

Summary

Data Sources

Comperemedia Email Panel

Static panel, 1,000 active users (manage 2+ accounts online)

Track nine sectors (financial, telco, tech, auto, hospitality)

Capture sector specific data from email and landing page

Comperemedia Email Behavioral Survey

Quarterly waves of 1,000 surveys each

Attitude and usage of email related activity

Mintel Reports Publications

Proprietary surveys and secondary research

CONSUMERS’ SECURITY & PRIVACY CONCERNS

Security Fears are on the Rise

In January 2009 alone, 669 stories were printed on the

topic of online security, phishing or identity theft

Although identity theft increased 22% in 2008, online fraud

accounted for only 11% of cases*

Over 40% of consumers are less likely to open financial

services email than they were a year ago**

Over 60% of consumers are more concerned with online

security than they were five years ago**

Most Influential Factors when Opening Email

3%

9%

11%

20%

55%

0% 10% 20% 30% 40% 50% 60%

Your name in the subject line

Cash incentive or bonus opportunity

A need for the product of service

Subject line clearly states offer

Knowing the sender

% of respondents

Familiarity is a Critical Factor

Which of the following is most important in determining whether or not you will read a personal business email? (N=1,000)

Privacy

Consumer Comfort Sharing Personal Information

13%

18%

21%

28%

37%

0% 10% 20% 30% 40% 50% 60%

My credit score

My online search information

My personal/demographic information

My email address from a company I DO

have a business relationship with

Information about the products I have

purchased online or in-store

% of respondents comfortable with sharing

What personal information would you be comfortable sharing in order to receive more relevant

and useful offers? (N=1,000)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009*

Sha

re o

f Em

ail

Phishing

*Q1 2009 includes January 2009 through mid-March 2009

98%

1%

1%

0.5%

0.2%

0.0%

87%

11%

2%0.2%

0.2%

0.2%

Banking

Credit Cards

Telecoms

Investment

Mortgage & Loans

Other Sectors

Credit Card Phishing Increasing

2007 Sector Share of Phishing Activity

N=4,245 N=3,335

2008

Which is a Phishing Email?

HOW TO ALLEVIATE CONSUMERS’ CONCERNS

Certified Email

Features that Impact Percieved Trust in Email

65%

48%

49%

49%

54%

59%

59%

0% 10% 20% 30% 40% 50% 60% 70%

Certified Email

Name in subject line

Legal disclaimer

Name in email body

Company Logo

Account login box

Last 4 digits of account

% “extremely/very important” responses

Considering the following features of an email, how important is each in making you

trust the security/validity of an email? (N=1,000)

What is Certified Email?

The most accepted version of the service is Goodmail’s

Certified Email, which gained significant credibility when it

became available through Yahoo! and AOL in 2006

Certified email is a white-listing technique that allows accredited

senders to pass through spam filters while verifying legitimate email

for recipients

Putting it Together

Company

Logo

Last Four Digits of

AccountAccount Login Box

Putting it Together

Account

Login Box

Last Four

Digits of

Account

Company

Logo

Telecoms, 5%

Mortgage & Loans,

4%

Banking, 2%

Credit Cards, 2% Auto, 2%

Insurance, 1%

Investment, 7%

Tech, 28%

Hospitality, 48%

Word-of-Mouth

Word-of-mouth is the most

trustworthy source of information

A quarter of consumers would

open an email if it was forwarded

on by a friend

The forward-to-a-friend feature

and promotions accounted for

roughly 15% of total campaigns

in 2008

Word-of-Mouth Promotions

Subject: Get $25 from Wachovia

Subject: Earn up to $500 in statement

credits from Citi® Cards

Moving into Social Networks

Efforts Noted, More Needed

Three of four consumers reported that their

financial services had an additional

authentication process to verify that they are

logging on to their official site

Only 50% felt more secure as a result

Which, if any of your online accounts, have an authentication process after logging into

the site? (N=829)

75%

50%

Security Features Go Digital

• “Digital Security

ID” from E*Trade

• “SafePass” from Bank of America

• Free Trustee identity

theft security software

from Rapport from

ING*

Innovative Security Features

• “Site Keys” from Bank of America

Phishing Education Email

Over half of consumers have received

educational email from their financial services

provider about phishing, identity theft and

other online security and email threats

Recommendations

Email Customers

Viral Marketing

Certified Email

Further education and features

Thank You

Pam McHugh Mintel Comperemedia

312.932.0400 pmchugh@mintel.com