70 per cent of Nigerian businesses are unaware about privacy laws governing their marketing activities, despite Nigeria Data Protection Regulation (NDPR) being in effect since 2019, a study has revealed.
The study, conducted by WorldWideWorx and commissioned by global technology company Zoho, also revealed that most business owners rely heavily on third-party trackers and ad platforms.
Even though businesses are concerned about the privacy of customer's data in the hands of third-party vendors, they are reliant on them for revenue generation and gathering customer insights, says the study, adding that this makes it harder for them to move away.
The study looked at 319 businesses across various industries and sizes. Findings of the study revealed that 45 per cent of business owners said they allow third-party trackers on their website, mostly for sharing content on social media and gathering analytics on their website visitors.
There is also a heavy dependence on digital ad platforms, the study showed, as findings showed that business owners believe that keyword search ads and social media ads are quite effective for customer conversion. "In fact, 78 per cent businesses said the third-party ad platforms either help them meet or are a primary factor in achieving their sales goals," it added.
Given this reliance on third-party vendors, it is no wonder then that, even though 85 per cent of businesses express concern over the use of their customer's data, they are largely either 'comfortable' or 'neither comfortable nor uncomfortable' with the platforms, the study's findings showed.
"Even the 18 per cent who are 'uncomfortable', stated that they cannot move away from the platforms as they are crucial to their business or that it is too complex to move away. Interestingly, 24 per cent businesses reported that they do not completely understand how third-party trackers and ad platforms utilise the collected customer information," it said.
When businesses choose to use a free tracker, they are paying for it with their consumer's data, said regional manager for Africa, Zoho, Andrew Bourne.
"At Zoho, we refer to this practice of third-party trackers collecting data without user knowledge as adjunct surveillance. Despite that, presently, Nigerian businesses turn a blind eye to this passive data collection by trackers, most likely, because they are dependent on them for revenue.
However, consumers will eventually trust companies with transparent privacy policies that protect their personal information. Businesses hoping to stay relevant in the long term will need to either rethink their reliance on third-party platforms or demand greater transparency and accountability from them," Bourne added.
On NDPR, the study shows that 39 per cent of Nigerian businesses believe that NDPR has had no effect, while 42 per cent said the regulatory body has a positive effect. "36 per cent of the respondents said their biggest concerns with the law are increased complexity while 34 per cent said the increased cost of governance was their biggest concern," it stated
According to WorldWideWorx CEO, Arthur Goldstuck, the lack of awareness about the law is largely because these regulations are not part of business-critical activities like taxation and licensing.
Goldstuck said, 78 per cent of the businesses indicated that they have well-documented policies for customer data protection. "This is likely following fear of NDPR violation, which has made headlines in Nigeria. Even so, only 60% are strictly applying them," said Goldstuck.