60 Minutes "Amazed and Shocked" by Web Analytics Invasion of Privacy

  |  March 17, 2014   |  Comments

On a recent episode, "60 Minutes" reported on the invasion of Internet-users' privacy and the notion of "data brokers." Marketers need to aggressively lead and shape the discussion, or risk being buried by the fear mongering of the ill-informed.

The Internet turned 25 years old last week. And the Digital Analytics Association (DAA) turns 10 in May.

While the Internet was conceived by the Defense Advanced Research Projects Agency (DARPA) as a way to send military and intelligence messages during wartime (later widely deployed by academics), the massive popularity of the Internet has largely been driven by commerce, advertising, data-collection, and analytics.

cbs-shutterstock-147256496Did anyone see the 60 Minutes report job last week on the invasion of our privacy and "Data Brokers"? It really struck a basic chord for me. Maybe you, too?

Correspondent Steve Kroft said he was "amazed and shocked" when he learned how third parties lurk in the background and observe users as they visit websites. He said, "To the 60 Minutes team's surprise, much of our personal data is collected while we surf the Web."

This disingenuous surprise reminds me of the scene from Casablanca when Claude Rains utters the famous lines, "I'm shocked. Shocked!" about the goings on in Rick's casino when confronted by German occupation forces, and he then accepts a bundle of cash from Peter Lorre who says, "your winnings."

Are they really surprised that folks like us "lurk" on sites and that we collect data and observe users as they visit websites?

He continues, "I just didn't know it was going on. I had no idea. When you go on a website, when you visit it, you are in effect giving them permission to take any information they want - that's the standard for consent. I figured that if I didn't know it, probably a lot of people didn't know it," says Kroft. "And then when I started asking questions, almost nobody knew it."

More shock: "They're able to marry what you're doing when you're offline - where you're shopping, where you're going, what you're buying - to the information that's online."

Any notion of what I saw, shoddy journalism aside, and apart from the reporter's bad acting, served to reaffirm how naïve society might be about the role of technology, marketing, and privacy and what are the acceptable trade-offs.

What 60 Minutes said is true. We have been able to measure in-store purchase history for a long time, and tailor offers to individuals. I have written about how we are soon going to be able to use iBeacons, RFID chips, and augmented reality wearables (like Google Glass), and create "Analytics for the Real World" by marrying online and offline data multi-channel data. And now the drones are coming, the drones are coming!

Yet, 60 Minutes laments, "Ultimately the concern is everything gets put in one pool, one identifier, and they know everything about you from minute to minute to minute to what you eat, when you go to bed, when you're home, when you're not home...it gets a little scary...like a force multiplier."

While the reporting claims to be based on "new" revelations, it comes well after Snowden's NSA revelations and a renewed interest in Internet privacy. NSA spying should be a major concern, but ultimately represents a different problem than commercial attempts at better marketing to consumers.

We all know there are "trade-offs in life." The trade-off here is that we accept a reasonable amount of privacy-loss for the "free" Internet itself. We all use it and many believe that it is foundational to the quality of our lives. However, that brings up an even bigger question about the role of technology in society. We give up privacy to own cars (driver's license) and have electricity (utilities track our energy usage). Maybe we shouldn't have cars and electricity either? Where is that inflection point?

Merchants have been capturing information on individuals since the Sears catalog was first printed. We have used business reply cards (BRC) in magazines to optimize and target our media and messages for the last 50 years. Phone companies have been monitoring the length and location of our calls and electric companies our voltage consumption. Modern cars send data from their little black boxes; and video cameras are on every corner.

And yet 60 Minutes is shocked to notice that, as they voluntarily connect with a server owned by someone else, and access information owned by someone else, their activity upon that server is observed and recorded.

Should we work smarter and have more balance, or do we work with the same effort yielding greater productivity? Technology can enable this. It is our option to use it and at the same time recognize the cost. In his forthcoming book Digital Is Destroying Everything, Andrew Edwards (my partner at Efectyv Digital and a co-founder of the DAA) suggests that privacy may be a conceit; and that the current collection of data by marketers represents a fair exchange of value. But he draws a clear distinction between marketing and government black ops and sees enormous dangers in rampant governmental data collection.

Clearly we need to have an open discussion about this topic as it weaves its way through our homes, autos, and offices.

As one of the founders of the Digital Analytics Association, I can say it's always been our hope to represent the digital marketing industry in its quest to better understand the customer. And yet 60 Minutes seems to find our work shady or somehow underhanded.

I say it is not.

We need to fight misconception and make distinctions where they are important. We need to aggressively lead and shape the discussion, or risk being buried by the fear mongering of the ill-informed. Time for the DAA to step up!


Rand Schulman

Rand Schulman is a pioneer in digital marketing and new media. He was founder and CEO of one of the first SaaS-based web-analytics companies, Keylime Software (Yahoo) and lead products and strategy at Webtrends; was CMO of WebSideStory(Omniture/Adobe) through its IPO; was general manager of Unica's Internet Division (IBM); and is a co-founder and board director, and is an emeritus board director of the DAA. He's been a trustee of the Direct Marketing Educational Foundation and is an executive-in-residence at the University of the Pacific for New Media and Marketing and was managing partner at SchulmanThorogood Group.

He is currently board member and advises numerous mobile and social media companies and is a managing partner with Efectyv Digital. You can contact Rand at rschulman@efectyv.com or follow him on Twitter at @randschulman.

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