Privacy Or Piracy?

With all this talk about permission marketing, profiling, and patient access to their own medical records, you’d think information about you belonged to everyone else but you.

Earlier this month, during hearings by the Federal Trade Commission and the U.S. Department of Commerce, the Network Advertising Initiative (or NAI, a consortium of third-party ad companies) announced it will start informing consumers of information being collected. Under the consortium’s proposal, web sites that use third-party ads will have to inform consumers through their privacy policies that data is being collected. They promised they would then allow consumers to opt out of being profiled as they surf the web.

While this sounds like a noble gesture on the surface, the companies seem to be doing it because they predict it won’t make much of a difference. They predict most users won’t opt out.

I Certify That I Have Neither The Time Nor The Patience To Read The Above Terms And Conditions

At the hearing, DoubleClick presented a study which showed consumers don’t mind being profiled, as long as they know about it. Of course, it would be in DoubleClick’s interest to have those results to avoid government restrictions on the collection of consumer data.

It argues that consumers don’t mind having data about themselves collected because they are actually interested in the targeted advertising that results.

We have to disagree with the motive outlined by the companies. When was the last time you actually read a site’s privacy policy? When faced with the legal mumbo-jumbo of long-winded privacy policies (lawyers and web writing are like oil and water), of course consumers will just agree to everything rather than torture themselves with the “party of the first part” and “heretofores.”

She Blinded Me With Patents

One of the most reasonable solutions to that dilemma so far was described in an article by Lawrence Lessig a professor of law at Harvard University. He suggests that rather than forcing consumers to wade through privacy policies and accepting or not accepting, users should be able to set their own privacy tolerance levels on their own computers. When a privacy policy on a site doesn’t match the criteria determined in the user’s privacy preferences, they can work out a negotiation.

This is the foundation for the World Wide Web Consortium’s Platform for Privacy Preferences, or P3P. However, between legal snares with patent-crazed Net companies and critics who claim that it does nothing for personal privacy beyond providing greater convenience for marketers, P3P has languished for nearly two years and may never see the light of day.

Patients Are A Virtue

The one industry that may bring the privacy and profiling advocates to their knees may be health care. Those oh-so-compliant consumers become rabidly private when they turn into patients. Once the health care industry finally catches on to the Net in a big way (any decade now), the issue will hit full throttle.

People may not care that advertisers know what brand of dish detergent they use. But they will care if some complete stranger – and worse, an army of complete strangers – know they have an ongoing hemorrhoid problem. Health care may raise the privacy bar to a breaking point.

Patients will start recognizing that they own their personal data, and advertisers will need to pay dearly for access to them. A five-cent coupon for deli meat won’t cut it.

It’s already starting with the issue of medical records. The health care profession is still in denial that some day a patient will own his or her medical record and health information, and will grant permissions to access it.

Right now doctors are resisting. Talk to a group of physicians or hospital executives about the ability of their patients to access their medical records online, and they bristle, saying, in essence, that patients “can’t handle the truth.”

Take Two Blindfolds And See Me In The Morning

Consumers will start to realize they can’t trust advertisers to be honest with them. There’s enough precedent in the last few months to demonstrate that. They have long since given up on the government to protect them – whoever ends up with the biggest political donations wins anyway.

Even the so-called watchdog groups – we won’t mention any names, but its initials are “TRUSTe” – aren’t exactly sticking to their guns. Given their wrist-slap responses to covert consumer data collection embedded in software from Microsoft and Real Networks, they have mostly served as a puppet organization.

Ultimately, consumers will realize that if they want it done right, they have to do it themselves. And that could mean holding their data hostage to the highest bidder.

This Just In: Consumer Privacy Is A Concern

For a long time before the web became a marketing machine, advertisers and marketers knew a lot about you. Every time you completed a postcard to win a new car, or subscribed to a magazine, or ordered from a mail order catalog, they knew more about you. The discount cards now popular at grocery store chains are a veritable personal information database to which you contribute every time you shop.

Why do you suppose you started getting an onslaught of mail order catalogs after ordering a gift from one of those high-end kitchen gadget catalogs? Marketers have been buying and selling your data for years before the web. Even during last year’s elections, candidates and public television got into the act.

You trade your personal information every time you opt in for lower prices or convenience. Personal information is the real currency.

But how much do consumers really care that someone else knows they prefer one brand of dog food over another – or that they have a sweet tooth for gingersnap cookies? The e-slime will hit the e-fan when the information starts getting too personal, as in the case of health care.

But First, A Word From Our Wiretappers… I Mean “Sponsors”

Before the web, the best marketing and demographic information was piecemeal and incomplete at best. Why else would Greg get a direct marketing piece this week from Wells Fargo Bank promoting their home equity loans when he’s still a renter? With the web, marketers now have ways to cull the information to create more complete picture of consumers.

Right now marketers would be best served to build the trust of consumers by being honest, skipping the legal jargon, and not trying to pull any funny business. The consumers will reward them in the long run with something even more important than data: loyalty.

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