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E-Businesses Exhibiting Privacy Leadership Get the Sale, According to New IBM Consumer Study On Privacy

Internet Consumers Want Privacy Assurances

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SOMERS, N.Y - 08 Nov 1999: -- Companies that want to be successful doing business on the Web must provide the personalized service that Web shoppers want and take proactive steps to ensure privacy is protected and secure, according to a new IBM survey of consumer attitudes toward privacy in the United States, the United Kingdom and Germany.

Released today, The IBM Multi-National Consumer Privacy Study, the first international survey of consumer perceptions toward online privacy, underscores a universal consumer interest in online privacy protection. The 300-page report also suggests that businesses that have good privacy policies and procedures gain a competitive advantage over those that have none.

The survey, conducted by Louis Harris & Associates, indicates that consumers who are more likely to shop online (typically those with more years of education, disposable income, and some tech knowledge) are also more likely to be concerned about online privacy and will take steps to protect personal information.

The key finding from among the more than 3,000 who responded in the United States, the United Kingdom and Germany is a clear consumer desire for merchants and service providers to proactively address online privacy concerns and establish policies that strengthen trust and confidence, including:

Post a privacy statement. Nearly half (47%) of the respondents in the U.S. and the U.K., and one-fourth of the German respondents, look for a privacy statement on Web sites.

Clearly define how personal information will be used. Sixty-three percent of the respondents who use the Internet have refused to give information to Web sites when they have perceived that their private information would be compromised or when privacy policies are unclear.

Support a privacy statement with sound policies and systems to ensure compliance. Forty percent of respondents who use the Internet have, at some point, decided not to purchase something online due to privacy concerns.

According to J.C. Slemp III, Director, e-business Security & Privacy, IBM Global Services, "The importance of helping clients promote trust and confidence among customers both on and off the Internet should not be underestimated. If a customer leaves your Web site without making a purchase because of a concern for privacy, then your privacy policies and procedures are not where they should be,'' Slemp said. "If your company wants to win e-business, effective marketing and good privacy protection are two key elements in achieving success.''

The IBM study, which measures consumer attitudes toward privacy in everyday business transactions, explores consumers' attitudes toward personalized marketing in general, and consumers' views of how companies handle personal information in four key industries: health care, financial services, insurance, and retail.

Other key findings from the survey show that:

-- While most people believe businesses handle information appropriately, Internet businesses (vs. bricks and mortar) are at the low end in terms of trust and confidence results, with far fewer consumers saying that they trust how those businesses handle information.

-- Americans are most active when it comes to protecting their privacy. They are twice as likely to ask to examine their personal files.

-- Consumers in all three countries believe that privacy policies are essential to them when they are online, regardless of country-imposed legislation.

"The Internet is the new way to build business-to-consumer relationships,'' Slemp said. "The Web creates an actual marketing dialogue between consumers and companies. If consumers perceive that their personal information is not being handled in a responsible way or they do not have full control over their privacy and security at a Web site, they will cut the conversation short.''

In addition to the consumer study, preliminary data from a separate IBM privacy survey of U.S., U.K. and German executives from the health care, financial services, insurance, and retail industries suggests that a perception gap exists among executives and consumers. The preliminary data shows that consumers tend to express less confidence than executives believe. Results suggest that executives polled also underestimate the extent to which consumers take measures to protect their privacy both online and offline.

A complete summary of results of the IBM Multi-National Consumer Privacy Study is available at http://www.ibm.com/services/e-business/priwkshop.html.

Harris Interactive (http://www.harrisinteractive.com) is the unquestioned leader in conducting market research over the Internet. With the world's largest cooperative database of over 4 million online consumers and proprietary, leading-edge technologies, the firm conducts political, business-to-business and business-to-consumer online and traditional research for Fortune 500 companies, foundations and educational institutions worldwide. Harris Interactive is built on a distinguished 40-year tradition spanning six former operating companies - including Louis Harris & Associates, responsible for the renowned "Harris Poll.'' Formerly known as Harris Black International, the company was ranked the second fastest growing market research firm in the nation by "Inside Research'' in 1998.

IBM Global Services is the world's largest information technology services provider, with 1998 revenues of approximately $29 billion. Services is the fastest growing part of IBM, with more than 136,000 professionals serving customers in 160 countries. IBM Global Services integrates IBM's broad range of capabilities -- services, hardware, software and research -- to help companies of all sizes realize the full value of information technology. For more information visit http://www.ibm.com/services.

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(b) Registered trademark of Harris Interactive

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