Something’s Got To Give- Connectivity, Privacy, and Targeted Marketing

If there is anything that the connected economy has become, it’s a contradiction wrapped in a paradox stuffed into a conundrum. We are connected to our data, our devices, and each other, as we have never been before. Yet we are more acutely aware (and seemingly protective) of our privacy than we have ever been in the past. This creates a very complex relationship between marketers, technology companies and the users where consumers want more customization, more prognostication, more access, more convenience, more interaction- but less invasion, less monitoring, less data collection, and less profiling. The users want to be public but anonymous. Services should be customized but the service shouldn’t know anything about them.

How did we get here? How do we manage this? Where are we headed?

The Evolution of the Portal

The Internet has completely changed the way we live and how we interact and it’s quite striking to realize just how quickly this change came about. Let’s begin with what was the first experience many people had with the Internet and the company whose seemingly endless CD mailings proved to be a valuable source of beverage coasters for those of us who were around at the time: America Online.

Born of a complex origin, but debuting widely to the public in the early ’90s, AOL was arguably the first service to really crack the code (no pun intended) and bring the World Wide Web to the masses. Promising everything from entertainment to communication to shopping, AOL was an enormous portal that served not only as a technical on-ramp to the Internet, but a gatekeeper to everything that lay beyond.

AOL was not just a portal to its users it was an enormous middleman. AOL hosted email. All traffic went through its pipes. Chats happened within its systems. Website content was proxied and redistributed to its users in special formats. The browser was built into the system, though savvy users would rage against the machine and rebelliously fire up Internet Explorer, or that radical upstart Netscape, for their surfing pleasure. AOL was also one of the first modern media conglomerates to control connectivity as well as content (Foley & Finney, 2002)

Let’s fast forward to the modern day and look back on that model with our aged, wizened, and increasingly cynical eyes. This is a single company that controls access, intercepts all of the traffic, and controls virtually all of the data. They know you. They have your credit card, DOB, and name. They know where you go, what you do, and to whom you talk.

And the general public was more or less OK with that. So what’s changed?

It’s safe to say that the technological and connected world had transformed in countless ways since those heady days of the ’90s when AOL was at its peak, but the transformation of the general public’s attitudes towards online privacy have shifted for a few key reasons:

1. We are more connected than ever before and are sharing ever more information, whether we are aware of it or not. People understand the growth of this information sharing, even if they do not understand all of the technology behind it.

2. It is no longer nearly as clear who has access to what. In the days of the early web portals, there was a single entity that had access to this information (generally speaking) and much of this information was contained. Today, the landscape is totally different with companies such as Google and Facebook actively monetizing user data to generate advertising revenue. The fact that users often don’t know who has access to their data or know how to control it creates an element of the unknown. Elements of the unknown create atmospheres of distrust and fear.

3. The business models are completely different. AOL monetized access and services. Sure, there were advertisements as well, but that wasn’t where the money was. Frankly, these early portals didn’t have a way to monetize user data in the same way as modern companies do.

4. Transparency and understanding. Users knew what they were paying for and could understand the business model. That is no longer the case. Ask the average user how Google makes their money and you are likely to get a general shrug of ignorance. The fact is the business model has changed from charging users for a service, to providing a service to users in exchange for user data, then selling that data to third parties. Users have actually become the product instead of the customer. As more users begin to understand this, they are becoming increasingly wary of these business models and the role that they play within them.

As Google and Facebook are rapidly moving to become the portals of the new world, providing services, content, and communication, we can see that this structure is not so different from the AOL model. The striking differences are in the business models and the attitudes of the public regarding the use and collection of their personally identifiable information.

Finding the Balance

When beginning to address the balance of privacy issues for users with the new business models that are appearing in the connected economy, one needs to begin with a healthy dose of reality for both marketers and users. Let’s start with the marketers first.

Marketers- the first thing that you need to accept is that the general public’s information is not, and should not, be an all-you-can eat buffet. There are pieces of information that are, quite justifiably, off limits. Aside from legal compliance with regulation such as HIPPA and COPA, there are some things that the public feels that you should not have access to. Users’ likeness, their personal information, and their families- these are all categories of information that users are not going to be comfortable sharing with you without their consent.

Here’s the thing- users simply don’t trust you to do the right thing with their information. Why should they? They aren’t clear on how you are getting it, what you’re doing with it, how you’re storing it, or how secure you are in your technology and business practices. This is compounded by obscure legal documents that bury the user’s permissions somewhere in page 397 of a legal document that they never got around to reading in the first place.

The technology that allows you to use UTM and cookies to track users around the web so you can gain additional information about users appear to most users as some kind of black magic that suddenly means that your product is showing up in more and more ads as they surf the web. This gives the appearance of Big Brother and generates paranoia- if you don’t handle things properly (more on that in a minute).

Now, let’s talk to the users. Those marketing guys, right? Always trying to get your information and using it for nefarious purposes. Sheesh, the nerve. Unfortunately, you play a role here as well.

Google, Facebook, Yahoo, and all of those other “free” services that you use are businesses. As much as we might like to believe that they are providing all of these wonderful services out of the goodness of their hearts, the reality is that they need to pay for all of that. The infrastructure, the development, the maintenance, the support do not come to these companies for free. Just like broadcast television and radio in the US are able to deliver you a quality service and generate their revenue from advertising, this is really the same model that the tech and social giants are using.

This isn’t a terrible thing on the face of it, and it didn’t come from out of nowhere. Every time you go to your favorite app store, have a choice between a paid app and the free, ad-supported version and choose the free one, you are driving home that this is a model that you are OK with. Every time you sign up for a free Gmail account instead of paying for an email service, you are saying that you’re comfortable with the tradeoffs. Pay me now, or pay me later- you choose the timing and the currency-money today or data tomorrow.

OK, so now that we know where we stand and the role each party plays in this equation, let’s hug it out and see what we can do to get to a mutually beneficial relationship.

Marketers first. You need to be more open and clear about your privacy and data collection policies. Be open, transparent, and up front about what you are collecting, how you are using it, and what (if anything) users can do about it to control their information.

Skip the endless legal documents and put this information in plain language that anybody can find, read, and understand. The goal here is to build trust, and simple transparency goes a long way in that effort.

Use opt-in instead of opt-out and do not use dark patterns in your programs and design. If you are truly operating in the best interest of the users and the public, explaining what you are doing and why should suffice. Sure, you are going to lose out on some information and data, but you will be gaining faith in your brand from your most valuable customers. If what you are doing won’t survive that transparency, perhaps you need to reevaluate your value proposition and business practices.

Now to the users. First, you need to accept that ads are not going to go away. They are part of life on the web and they are a viable revenue source for sites, products, and services that you use every day. No marketer wakes up in the morning with the malicious intention to see how many people he or she can annoy before they punch out in the evening. Most of the complaints that I hear about advertising on the web are related to things appearing that offer no value to the person who is viewing it. Guess what targeted marketing is aiming to solve?

Targeted marketing has the goal of putting information in front of users who are more likely to find the advertised item or service appealing. This is really something that we all want- the marketers want to get more bang for their buck and you want to see things that are actually interesting to you. Not so awful, right? In order to do that, you will need to provide some information that will allow this targeting to work. We’re not talking about your bank accounts or name of your first pet, but rather what are you interested in? Are you currently shopping for a specific category of product?

Users also need to educate themselves on the technology that is used and their rights that they have. Those privacy statements are not written out of sadistic pleasure (well, most of them aren’t), they are there to inform you about your rights- the ones you retain and the ones you waive. Yes, you really do need to read and understand those if you are going to use a product or service.

Once we can get to a point where users understand some of the benefits of targeted marketing and how the technology works while the marketers make efforts to make their policies easier to understand and more transparent, then we will all be in a better place. We need to remember that we are seeking connectivity and customization as consumers, and that we need to provide information that will enable this. As stated in The Offensive Internet : Speech, Privacy, and Reputation (Nussbaum & Levmore, 2010),

“Just as there are costs to protecting privacy too little, there will be costs from protecting privacy too much.”

Looking Forward

We can see how radically the connected world has changed over a very short time span and how these changes have created whole new business models and product categories while killing others outright. During this time, we have also seen changing public awareness and attitudes about privacy and security as the landscape changes around users. Guess what, folks- it’s about to move on to a whole new level.

We have evolved from isolated communication and online portals to connected web services, to connected computing devices and data. Now we are moving toward connected homes and environments. The Internet of Things and Services promises a whole new world of connectivity and offers tremendous benefits to users. The flip side of that is a completely new category of personal data will be offered up and exposed by users and their environments.

This information could be a treasure trove for marketers who will now be able to learn not only about you as a person but you as a lifestyle. How warm do you like your home? When are you on vacation? What time do you go to bed? When do you walk the dog?

Many people perceive the greatest barrier to the IoTaS as being technology. It may very well turn out to be the case that the biggest barrier is customer trust and privacy. The winner in this technological race may turn out to be the company that engenders the most faith and confidence in the users instead of providing the best tech.

The landscape is going to continue to evolve and the matters of user privacy are only going to become more complex to navigate- for both marketers and users. We have a chance to start to form a better approach to collect and utilize the data that marketers desire while operating in the best interests of the users. By coming together, we can all make progress towards striking the right balance.

References

Foley, M. E., & Finney, M. I. (2002). Bodacious : An AOL Insider Cracks the Code to Outrageous Success for Women. New York: AMACOM.

Nussbaum, M., & Levmore, S. X. (2010). The Offensive Internet : Speech, Privacy, and Reputation. Cambridge, Mass: Harvard University Press.

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~ by ewetzell on March 9, 2014.

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