AnalyticsAnalyzing Customer DataPick Your Poison: Privacy Versus Intrusiveness

Pick Your Poison: Privacy Versus Intrusiveness

Who's really benefiting from online privacy initiatives? Dev comes up with a surprising answer.

On the Web, the activists worry about privacy, but they’re not as concerned with intrusiveness. Offline, they’re worried about intrusiveness but don’t care much about privacy. These are the lessons from recent headlines in the world of marketing. Unfortunately, they augur better days ahead for offline marketing and spell continued suffering for Web marketing.

This week, a bill that mandates increased telemarketer responsiveness to consumer “do not call” requests made its way through Congress. The bill is supported by, among others, the Direct Marketing Association (DMA) itself. Meantime, Web marketing grows increasingly cluttered with ever-intrusive advertising, as discussed in previous editions of this column and elsewhere.

The privacy debate, on the other hand, seems only to exist in a Web context. The efforts of privacy advocates have done their part to squelch most innovation in Web-based data analytics. Despite the natural abilities of the medium, analytics based on actual transaction history are simply not used in targeting Web advertising. DoubleClick’s Abacus unit never managed to leverage offline transactional data to display banners, while startups such as Cogit never made it.

These two advocacy efforts — one in favor of online privacy and another in opposition to telemarketing intrusiveness — may seem similar, but each will have a dramatically different long-term effect on the industries they target. The effort to make telemarketers more responsive to consumers will actually help the industry, as it will limit the most egregious offenders while allowing the vast majority of telemarketing and list-sales operations to continue and flourish.

Indeed, the telemarketing industry has come a long way in recent years in its use of data to help close a sale. Most telemarketers use at least the simplest data analysis to determine what calls to place and when. Data is also brought to bear during inbound call interactions, on the fly, as consumers call in.

In addition to raw data appended to customer records during caller interactions, telemarketers are taking advantage of online transactional histories as well. The largest transactional data providers increasingly include online transaction histories in the consumer profiles they market. So while offline data hasn’t made its way into the online setting, the reverse is certainly not the case. Online transaction histories are now being used to optimize telemarketing operations. Funny how the world works, isn’t it?

The upshot of all this is that telemarketers will continue to innovate. Meanwhile Web marketers will suffer. With funding to attempt new ideas all but dried up in online advertising, consumers will increasingly suffer through intrusive online advertising. (Have you been introduced to the latest online ads with sound effects and Flash displays that stop and hover above the text?)

Telemarketers have seen a downturn with the rest of the economy, and even the largest firms have suffered. But this industry is huge and mature. According to the DMA, more than $70 billion was spent on telemarketing this year, representing 38 percent of all direct marketing expenditures. Telemarketers sold more than $660 billion in goods and services. Innovation in the uses of data for telemarketing will increase, because even the slightest improvement in efficiency here leads to big dollar savings. And some of the knowledge used to improve the efficiency of real-time interactions will come from those who have been working to do it online.

Unwittingly, the online privacy advocates will have managed to help telemarketers become more efficient.

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