People are the Product

In the last six months, Emily has received a handful of emails from online companies notifying her that they are going under and selling their assets.

These emails all sound alike: The economy’s downturn can no longer support the business model, investment money has been derailed, and so on. The alarming message in all the emails is that one of the “assets” being sold are the customer lists. In some cases, it’s not only the contact information but also records of consumers’ online interactions — spending habits, self-managed online fitness records, financial information, and so on. In other words, YOU are the company’s asset.

In each of these situations, we’ve had the option to cancel the accounts. Granted, there’s no guarantee that the purchasing or selling agencies will honor the cancellation even if you cancel your account. Your information could still be floating around out there.

This week, Netcentives, an online marketer specializing in email marketing and online loyalty programs, declared bankruptcy. It’s another in a long line of companies selling off their high-end computers, industrial design desks, ergonomic chairs, and fashionable office décor. Hidden behind the “everything must go” sign, however, is the suggestion that user names and personal information are available — for a price.

Another online advertising firm, DoubleClick, was burned by bad public relations over its cavalier attitude toward customer information. Now it’s engaging the services of a Net privacy consulting firm to set its clients straight. DoubleClick is still in business, and so it’s in the company’s best interest to improve its reputation as the protector of consumer privacy. That’s why companies such as Yahoo, About.com, and iVillage are making a very public effort through the Interactive Advertising Bureau to educate the public and allay consumers’ fears. But companies that are disappearing don’t have that kind of motivation.

Consumers are sometime surprised — and dismayed — when they realize that the real product in the media they consume is not the content. It’s not the new and improved laundry detergent or the new all-wheel-drive SUV. No, the real product in television, magazines, newspapers, radio, and the Internet is us. The consumers. The audience. When an advertiser places an ad, she’s buying our attention for a moment. And the more of us in the audience, the more that can be charged for this “mind share.”

Until a few years ago, consumers would watch (or listen to) the advertising, which was conveniently placed between stretches of content that would hold our attention between one ad and the next. It was a sort of jungle, with the content (TV programming, article, radio show) being a rope swinging between the trees of cars, pain relievers, and fast food.

Now the advertising watches us. And we’re being sold and traded in fire sales as dot-coms close their doors and struggle to stave off their creditors.

Apparently, the vast majority of people don’t care. Last week, Zero-Knowledge shut down its privacy service. The company says over 70,000 people signed up for the service that would allow them to surf the Internet virtually anonymously by using false names. But very few were willing to pay for the service.

Some of this comes from the general attitude that protecting our privacy is someone else’s responsibility — particularly the government’s — rather than our own. And this isn’t just about whether someone at a clothing Web site knows our pant size. We’re also faced with more critical online privacy issues.

In the aftermath of the terrorist tragedies of September 11, the public debate has turned to the balancing act between our civil liberties and right to privacy, and the need for our government to protect us against further terrorist threats.

Now we’re also faced with our own inconsistent attitudes with regard to our expectations — we want the government to protect our privacy while being aggressive in its intelligence gathering (read: snooping). It’s a delicate balance that requires us to consider what we’re willing to give up.