January 28 was Data Privacy Day and, as the National Cyber Security Alliance (NCSA) describes it, it's "an international effort to empower and educate people to protect their privacy and control their digital footprint." ClickZ spoke to different players in the data-driven industry -- including Rovio's iconic chief marketing officer and "Mighty Eagle" Peter Vesterbacka -- to provide some clarification on how marketers are collecting and using data in a way that builds trust, versus the NSA and government data sweeps that get everyone nervous about privacy. Let us debunk the myths one by one.
Profiles, Not Personal Data Per Se
Digital analytics is not surveillance. "One of the biggest problems is that people don't understand how online and mobile advertizing works," Vesterbacka tells us. "People think that ad networks collect information on them personally. It's about profiles."
Data brokers and marketers don't pick up your personal, identity data but your behavioral data: browsing footprint through cookies, location information, clicks, etc. It's about getting a pattern and a contextualized view of things that are of interest to you.
Diving further into the technicalities, Michael Provenzano -- whose ad tech exchange platform, Vistar Media, is built on mobile data -- explains: "In the case of location information, data is aggregated, to about a city block level. Further, the data is completely anonymized -- making it impossible to track an individual's precise real-time location. In some instances, the anonymous identifier is refreshed multiple times per day, meaning even if someone had access to raw data logs, the historical information on any ID has little data associated with it."
Governments, Marketers, and Brands: Different Purposes
There's no doubt the NSA and other foreign government organizations may find such information useful for matters of national security. Marketers are focused on finding out what users are most into, in order to serve them content (be it ads or editorials) tailored to their likes. For their part, brands are either interested in the same analytics approach as marketers to get visibility and conversion for their products and services, or, they also use ads as a way to provide free-of-charge services. Vesterbacka highlighs, "A lot of services are free because of advertising. Most people prefer free." The "freemium" model (i.e. ad-supported) is popular, but it does have an underlying cost: as a user, you get served targeted content and ads. It's "no free lunch but nothing justifies the NSA spying," he adds, echoing his company's statement on the matter. However, when asked whether Rovio is technically able to block such peeking attempts from government organizations, Vesterbacka replies, "I think that it's pretty tough to do that 100 percent -- the spy organizations have almost unlimited resources."
Security, Privacy, Trust
"We would never collaborate with NSA, KAOS, SPECTRE, or any other spy organization," Vesterbacka says, commenting on the recent New York Times report alleging that the NSA was using Angry Birds' Android app as an impromptu inbound data firehose. Security is the reason invoked by the NSA. Privacy is what users, consumers, and fans are worried about. Information, and therefore trust, is what needs to be built or restored for the public to fully support data collection.
Consumer Behavior Shifts with Loss of Trust
According to a Harris Interactive consumer research report for online privacy management services provider TRUSTe, the media coverage of the numerous NSA data breaches has increased concerns on the consumers' part. The backlash of that is that they now are "more comfortable taking things in their own hands, they now have time to figure out how to take more proactive action toward their data," TRUSTe vice president of marketing Dave Deasy tells ClickZ. "The whole concept of leaky apps and data being collected and ultimately shared to a third party without the original user knowing is really about privacy issues." For apps, consumers now "take action to turn off location tracking, for example. But the problem is, it sometimes completely disables the app. The solutions are more of an on/off switch than a dial up or down," Deasy adds. "Sometimes, on websites, users can opt out of behavior advertising, via the Digital Advertising Alliance's (DAA) icon." But again, marketers and brands lose key information that ultimately allows them to better serve the consumer.
Consumer behavior infographic by TRUSTe:
The Cost of Non-Ethical Behavior
"Some 74 percent of responders are feeling more confident about managing their online privacy than a year ago. It means that they are less likely to click on ads, less likely to use an ad, less likely to enable location tracking," Deasy explains. This can have negative consequences on business. For instance, the data-driven marketing economy (DDME) added $156 billion in revenue to the U.S. economy and fueled more than 675,000 jobs, according to figures released by the Direct Marketing Association (DMA). "The real value of data is in its exchange across the DDME: 70 percent of the value of the DDME -- $110 billion in revenue and 478,000 jobs -- depends on the ability of firms to exchange data across the DDME."
Are we really ready to lose that because of unethical behavior on the part of no one but the govermnent itself?
There are plenty of examples of privacy breaches from the NSA. Just to cite a few, as previously stated, they are reported to have been using Android apps or piggy-backing on Google cookies to grab data from consumers. The New York Times has also made available documents regarding both the NSA practices and the UK's Government Communications Headquarters' methods (GCHQ) for mobile data sweeps.
To counter that, Internet majors had petitioned the U.S. government to allow them greater transparency in their reports. In response to that, the Department of Justice (DoJ) just this week announced it would work to "allow more detailed disclosures about the number of national security orders and requests issued to communications providers."
Disaster Preparedness: Transparency Is King
The DMA announced it is updating its guidelines for ethical business practice to ensure that organizations are protected and ready. The "DMA believes that the best defense is a strong offense," it says in a statement, ahead of the February release of its updated guidelines. They include a "data breach preparedness plan," for instance.
The need for businesses to be proactive is largely echoed by TRUSTe's Deasy: "The businesses who are heavily based on their ability to collect data need to be clear -- we're only collecting the data we need, and we're being transparent about what we're collecting and how we're using it." It's really about "building trust with users."
In the end, the view that marketers are poised to benefit from the NSA debacle still stands, but with the necessary ethical disclosures.
Meet Your Favorite ClickZ Contributors
Many of ClickZ's leading expert contributors will be at ClickZ Live, the new online and digital marketing event kicking off in New York (March 31-April 3). Hear from the likes of: Jeremy Hull, Lisa Raehsler, Andrew Goodman, Bryan Eisenberg, Mathew Sweezey, Aaron Kahlow, Stephanie Miller, Simms Jenkins, Jeanne S. Jennings, Dave Hendricks and more!
Liva Judic joined Search Engine Watch and ClickZ in May 2010 as a news blogger. She has lived and worked across the globe in Madagascar, Switzerland, London, NYC, Asia and is now based in between New York and Berlin.
Her background is in government relations and financial media where she started out as a journalist at Bloomberg and became senior editor at AFX news (now part of ThomsonReuters). Prior to forming her own consultancy Judic was head of international PR for a head of state.
Judic focuses on facilitating brand and marketing transitioning for European startups moving to the US. She has been named one of the Top 50 Industry Influencers of 2014 by AGBeat
March 19, 2014