Performance-Data Trilogy: Privacy Issues

The privacy issue remains a squishy one, largely because there are no commonly accepted privacy standards.

The industry found itself in hot water in the early part of 2000 when several of the large Internet media companies became juicy targets for congressional hearings. DoubleClick had bought a large database marketing firm that owned information about millions of consumers. Privacy advocates were concerned that something nefarious could be perpetrated when DoubleClick combined that data with its Web-tracking tools.

During the entire debate, no one drew a bright line as to what was an acceptable level of data collection and what was not. But several factors came to dominate the discussions:

  • The depth of information tracked by individual

  • The degree to which that information was linked with other data sources
  • The type of communications or classifications that resulted

The rough sentiment seemed to be that collecting performance information to gauge which ads work better is acceptable; collecting information to hit the customer with a message in her mailbox about a relevant service is not. Customizing ads to be more relevant to individuals was seen as compliant but not if it involves using information secretly recorded about the person from other sites. This isn’t very consistent, but it does accurately reflect the public’s inconsistent sentiments.

Our best recourse is to look at what types of standards have become acceptable in traditional media. Very similar debates about privacy have periodically surfaced in the areas of direct mail, promotions, and couponing, and they now have relatively well-articulated privacy standards.

What’s Acceptable in Direct Mail

The direct-mail industry is like the big brother who went through all the early disciplinarian stuff while we interactive folks were still in diapers. It sets a great precedent as to what online advertising will be allowed to do, and it turns out to be rather liberal.

Direct-mail folks collect information on individuals from many different sources, including product registrations, subscriptions, government rolls, and all sorts of other places. Chances are if there’s a complete address requested, it’s being sold for a couple of cents somewhere down the line.

Sending messages to these folks remains completely acceptable. Selling the names to others? Completely respectable. Combining information from two lists? Knock yourself out.

Direct-mail houses will even keep in-depth databases on individuals, allowing these databases to customize the types of offers most likely to affect any given person. If you buy a car from your Ford dealership, you might find yourself getting mail from Sears about service. If you earn $1 million per year, you’ll likely get the message about the loaner car instead of the 10 percent discount.

What Ticks Off Consumers

People will complain when they receive too much unrequested, irrelevant mail. If they get two pounds of mail per day in product categories they love, they won’t complain; but if they get three irrelevant flyers per week, they may write a congressperson.

By happy coincidence, the direct-mail people don’t want to waste their money sending irrelevant messages either, so the industry strives to meet the needs of consumers, even as it exploits that personal information.

A key tenet of this system remains that any individual can “opt out” of a list. If an individual starts getting circulars from the local adult bookstore, he can request to be taken off the list. Taking such a person off the list is generally compulsory by law.

Public perception of privacy issues has a lot to do with the creative used. Back when caller ID became popular among companies providing customer support, many companies would have their representatives answer the phone, “Hello, [person’s first name], what may I do for you?” Especially back then, this was pretty freaky. It kind of made you think the company was omniscient, like it could see you in your underwear.

Likewise, direct-mail houses will receive complaints when a printed piece tells the customer, “We know you just bought a Ford truck.” Avoiding this type of creative tactic went a long way toward quelling an uprising in direct-mail complaints in the late 1980s. The online world would be wise to learn this lesson the easy way — by looking at the mistakes made in the direct-mail industry.

On the data front, there are a few things we can do to minimize our liability:

  • Disclose on the client site the information that’s collected.

  • Make sure that people can opt out of information collection (or, at a minimum, that they are allowed to back out of a service before the information becomes part of the database).
  • Do not sell the data. While perfectly legal, this is what burns some of the privacy zealots.

Some things we can do to make information collection more politically palatable:

  • Ensure that the information collected also creates useful additional functionality within the content of the site.

  • Do not make it obvious (within the copy, for instance) that advertisements are being targeted based on personal knowledge of the target.
  • Do not send out press releases bragging to media buyers about all the neat, new invasive information that you can collect on innocent Web travelers. This is what got DoubleClick into trouble.

Remember that a lot of the privacy concerns are valid. We’re lucky that enough precedents have been set and enough standard policies already formulated to help the online advertising industry find its way out of the woods.

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