SOURCE: StrongMail Systems

June 23, 2008 08:00 ET

StrongMail and Ponemon Institute Survey Reveals Risks to Customer Data Introduced by Marketing Practices and Perceptions

Customer Data Put at Risk by a Perception Gap Among Marketers and Privacy Professionals on How Information Should Be Shared and Protected

REDWOOD CITY, CA and TRAVERSE CITY, MI--(Marketwire - June 23, 2008) - StrongMail Systems, Inc., the leading provider of on-premise solutions for marketing and transactional email, and Ponemon Institute, a privacy and information management research firm, today announced the results of a new research study that found significant gaps in perceptions between marketers and privacy professionals in terms of how email marketing practices affect consumers' privacy rights and risks to personal information.

The perception gap between marketers and privacy professionals is made evident in the compiled report "2008 U.S. Study on Email Marketing Practices and Privacy." According to the study, more than one-third of marketers do not limit the data they distribute to third parties, whereas 75% of privacy professionals believe that their organizations limit the data it shares. In fact, marketers report a willingness to share such personal information as credit card number (45%), debit card number (39%), Social Security number (29%), and bank account/routing number (17%).

The report also found that while 59% percent of marketers and 53% of privacy professionals indicate that they outsource marketing activities, almost half of the organizations that experienced a data breach pinpointed the loss of data to a third party, such as a vendor, business partner or contractor. Of marketers who outsource email marketing, 72% reported a data breach vs. 56% of marketers from the general survey population. In addition to potential data breaches, outsourcing also limits an organization's ability to safeguard consumer data to ensure that it is not used for other unintended purposes, such as unsolicited spam or phishing attempts.

Key Findings

--  75% of privacy professionals believe their organization limits the
    customer information that is shared with third parties vs. 40% of marketers
--  59% of marketers reported that a data breach resulted in the loss of
    potential customers, and 56% reported a corresponding loss in existing
    customers
--  72% of marketers who outsource email marketing reported a data breach
    vs. 56% of marketers from the general survey population
--  Only 44% of marketers believe that they are compliant with CAN-SPAM
    vs. 83% of privacy professionals
    

"These findings clearly demonstrate that privacy professionals and marketers have different perceptions about the value of privacy and trust to their email marketing programs," said Dr. Larry Ponemon, chairman and founder of the Ponemon Institute. "The gap between perception and practice related to the sharing of sensitive personal information is staggering, suggesting that, in light of these findings, organizations should re-evaluate their internal policies and external relationships in order to properly assess data security risk introduced by outsourced services such as email marketing."

The report "2008 U.S. Study on Email Marketing Practices and Privacy" was conducted by Ponemon and sponsored by StrongMail. An internationally respected authority on data security and privacy, The Ponemon Institute surveyed 498 privacy and data protection professionals and 713 marketers in May 2008 to obtain the data used to create the research report. Respondents from both groups reporting having an overall experience of nine years and were asked to respond to the same questions about their marketing practices, data privacy and protection policies, and experiences with data breaches.

"This research study is a wake-up call to the industry to ensure better alignment between the expectations of marketers and privacy professionals when it comes to respecting and protecting customer data," said Bill Wagner, executive vice president of business operations at StrongMail Systems. "The huge discrepancy between what customer information these two groups will share shows that many marketers view customer data as more of a commodity than an asset -- and that willingness to violate the trust of their customers can have a disastrous affect in terms of customer loyalty. Until customer information is handled as intellectual property, this situation is unlikely to change."

Study Availability

A copy of the research report "2008 U.S. Study on Email Marketing Practices and Privacy" is available for download via the following link: www.strongmail.com/resources/whitepapers/wp-us-marketing-practices

About the Ponemon Institute

The Ponemon Institute© is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations in a variety of industries.

About StrongMail Systems, Inc.

StrongMail Systems provides businesses with commercial-grade, on-premise solutions for marketing and transactional email. StrongMail integrates its proven email delivery, tracking and campaign management software on high-performance servers that are optimized for maximum deliverability. In addition to providing superior control, security and integration capabilities, StrongMail's in-house approach offers companies a more powerful and cost-effective alternative to homegrown or outsourced solutions. Hundreds of companies worldwide rely on StrongMail's solutions to power their mission-critical customer communications. A Silicon Valley company, StrongMail is headquartered in Redwood City, CA, and is funded by Sequoia Capital, Evercore Partners, Globespan Capital Partners and DAG Ventures. To learn more about StrongMail Systems, visit www.strongmail.com.