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Safeguard User Privacy, or Careful with that Data, Eugene!
November 20, 2007

Nothing says “Orwell that ends well” like conversations regarding consumer privacy. Advocacy groups have been trying to persuade the Federal Trade Commission to investigate online marketers and their use of so-called “behavioral targeting”—that is, tracking an individual’s movements online and using the data thus collected to drive personalized advertising. One potential outcome could very well be the establishment of a “Do Not Track” list, much like the “Do Not Call” registry that purports to keep telemarketers at bay. A Do Not Track list would allow online consumers to opt out of behavioral targeting. We have no doubt this would be about as effective at the CAN-SPAM regulations that purportedly reduced the amount of junk e-mail being sent. Check your inbox; how’s that working so far?

In an age when people chronicle their entire lives on blogs and MySpace pages, it seems a tad silly to overreact to behavioral advertising. But then this is also an age when some people see Orwellian conspiracies in automated toll collection. This is the thin line marketers have to walk.

Still, the point is not to make light of this issue, which could have serious repercussions for marketers. And many of the privacy advocates do have a point; the potential for data abuse is certainly there, although at this point we’re still a far cry from turning into something out of a Philip K. Dick novel.

What kind of data can be collected from users? It can include:

• information about a person’s browser, operating system, and other software installed
• past visits to a given site or sites
• geographical location
• content preferences
• any other information that can be obtained about an individual and his/her activities.

A lot of the data collected is anonymous, at least in theory. That is, cookies and other identifying data uploaded to the computers of Web site visitors do little more than keep track of them, eliminating the need for users to repeatedly provide personal information. However, it is tracking technology that “defragments” these individual shards of data—or cross-references them with each other—to create a fairly complete profile of the user.

And if you don’t think that social networking sites like Facebook or MySpace are eager to sell the information in their users’ profiles to advertisers and marketers, think again. 

Now, bear in mind, this isn’t a one-way street. Many users willingly divulge personal information in order to reap online rewards, such as discounts, upgrades, credit, and free services or products. And, of course, social-networking site are all about sharing often very personal information. Still, some companies—namely, AOL, Google, Microsoft, and Ask.com—are responding positively to the issue and are taking steps to safeguard their customers’ data.

A new fly in the ointment is the proliferation of mobile devices—now peoples’ physical movements have the potential to be tracked and ads served appropriately. For example, if someone is walking past a Starbucks, a coupon for a latte can pop up on the users mobile phone. (This is not a new concept; this has been the dream of some in the ad industry for almost a decade.) 

The challenge for marketers in this environment is one of gaining trust. People are often not shy about divulging personal information, but they resent it when that adapt is passed along to someone else. In other words, personal data has to be used on the user’s terms. Offer someone a free magazine subscription, for example, and the first question they’ll ask is, “You’re not going to sell my name to someone else, are you?”

For companies looking to avail themselves of behavioral targeting, there are some tips that can not only make it work, but can also help instill a level of trust in your customers, which, after all, is a win-win scenario.

• Be up front with your customers. That is, tell them at the outset that you are collecting information and what your policy regarding privacy is. If you sell mailing list data to third parties, say so. A line on an application such as “We occasionally make our customers available to our company’s partners for the purposes of sending them relevant promotional materials” offers your customers a welcome level of transparency that can help instill trust.
• But, that said, allow users to opt out of third-party promotions. A check box on a print or online application gives customers an added level of security.
• On the back end, make sure your customers’ data are secure and hacker-safe. We’ve all seen too many news reports of databases that were hacked or otherwise pilfered. Invest in secure technology to protect sensitive data.
• Once you have invested in privacy and security technology, tout it up front. A logo or something like “Privacy guaranteed by Acme Security Technology” or some such also imparts a level of security to customers, even if they have no idea what it actually means.
• Choose partners carefully. If you do provide partner companies with customer data, choose those partnerships carefully and make sure they in turn will not be violating your own privacy policy. Entrusting customer data to a partner with a more cavalier approach to privacy concerns will only reflect back upon your company and will turn off customers. Make sure you trust the companies with whom you work.

According to eMarketer, companies will spend more than $1 billion on behavioral advertising in 2008. It’s not enough to take advantage of the technology; to make it work effectively, you need to use it responsibly. After all, the alternative is government intervention.

Posted by Richard Romano on November 20, 2007 | Comments (0)