Striking A Balance Between Consumer Privacy and Marketing Analytics

by
Digital Privacy

Where is the line between personal privacy and market research?

Today marketers have access to vast amounts of data about consumers and consumer behavior.  A person’s path can be tracked through a website.  Calls can be recorded and analyzed as they are made into customer service and support centers.  Conversations on social platforms can be monitored and engaged in.  Customers and prospects can be dynamically presented with special offers based on browsing and search patterns.  It can be kind of overwhelming to digest this much data and the user profile that can be generated from this data can be very complex and revealing.  Where does marketing cross the line between gathering good information to help a company grow versus infringing on personal privacy?

This is a multi-billion dollar question whose answer changes not only over time but also by global region or country.  Norway, Finland, and Germany have some of the strictest privacy laws and restrictions while the United States, Russia, and India have minimal restrictions, and China has virtually no restrictions on the control of private personal data (Forrester,2013).

Most user data comes from interactions people have with organizations each day.  It is people calling with cable problems, browsing a site looking for a new pair of shoes, even people checking in at restaurants via tools like Facebook or FourSquare.  Seems harmless right?  What if someone checked in at the same coffee shop as did one of the Boston Bombers? What if they also happened to share the same Bank?  What if they also had an account at the same library?  These seemingly separate and unique daily activities can be used to build a pattern of association between these two people and suddenly an innocent person could be associated with a terrorist.  This is an extreme example but shows why some of the recently revealed government programs are so highly controversial.  Some people say “what’s the harm in collecting phone numbers, I have nothing to hide.” The problem is the possibility of creating associations and patterns of behavior that could mistakenly identify innocent people with possible trouble makers as outlined above.  There are safeguards in place to help prevent this from happening but no system is 100% perfect.

Outside of the covert systems described above, there are many solutions being used by the majority of large companies to gather personal and behavioral data of individual’s as they interact with company brands.  Calls coming into a call center are recorded.  Social media services are data mined. Emails are analyzed. Organizations use software to build patterns of behavior and preferences for this data. Feel violated yet?  Well, put your mind at ease.  Very few people within an organization have a full view into all the data that is collected and analyzed and most data does not even have a name associated with it.

For example, if someone does a Google search for “Kids Shoes.”  Guess what just happened (other than getting back 1,286,345 results).  Google placed a cookie on their computer that shows they searched for Kids Shoes. (Good news, if privacy settings are adjusted to block cookies, this doesn’t happen so there is a way to not be tracked).  Just in case the term cookie is unfamiliar, a cookie is a small bit of code that is installed on a person’s computer.  The bit of code is used to hold details about a user’s activity on a web site or even multiple web sites.  Google now:

  1. knows that the person searching for Kids Shoes is interested in Kids Shoes
  2. will now search for Google Advertisers who are selling Kids Shoes (and has paid for the AdWords Kids Shoes)
  3. makes a note in its data base that the computer looking for Kids Shoes is likely to be interested in ads for kids shoes.

The user then click on a few search results links including one from Keddy’s (fictional store name).  On the Keddy’s site, some shoes are reviewed and a pair is even added to a shopping cart but not purchased yet.  Guess what, the Keddy’s site added a cookie to the user’s computer that remembers what was looked at, when it was looked at, what was added to the shopping cart and if a sale was completed. The user exits the site and then goes back to work and closes the browser.  Now fast forward a few days and the user is on Facebook.  Suddenly an ad for Keddy’s shoes shows up and it highlights the exact pair of shoes the user put in their shopping cart and just by chance they happen to be 10% off.  How much of coincidence is that!  Well, it’s not.  The cookies that Google and Keddy’s placed on the user’s computer work together to present the ad for a product that was deemed interesting (by being placed in the shopping cart). Studies show that if presented with a familiar product again, people are more likely to buy it, refereed to as re-targeting, the process of getting a product back in front of a consumer increased conversion rate (Li, 2013).

So, is this a violation of personal privacy?  Is your browsing history something that should be protected from marketers?  Should an organization be able to put a cookie on your computer without you knowing about it?  This is where great strides are being made in privacy laws.  Between efforts of search engines and legislators around the globe (with a few exception countries like China) efforts are being made to limit what data are collected, what can and can’t be done with data gathered from and stored on a user’s computer and during other interaction types a consumer may have with an organization.

Search rules have changed considerably to address privacy concerns as well.  Until 2011, each search string that was used by anyone searching in Google was recorded and made available to site analytic services and site reporting applications like Google Analytics or Adobe’s SiteCatalyst (Google, 2011).  With new privacy rules being enacted and enhanced privacy settings enabled in browser applications, a large amount of search string data is now reported as “Unknown” or “Not Available.”  For some sites this can be over 55% of overall site traffic (Pollitt, 2013).  For marketers, this is concerning and frustrating.  Where did all the great data go?  How can marketers get it back?

Many consumers don’t understand how this tracking takes place or that it is even happening.  Privacy guidelines and regulations are put in place to help notify users that their activity is being monitored.  When a notice appears on a web site, users are well advised to read it and understand that their activity may be being monitored and recorded and then used for a number of marketing and/or research efforts.

What do you think?  Should organizations do more to educate or notify their customers and prospects that they are monitoring activity?  Do they have an inherit right to do this?

References:

Forrester. (2013). Privacy and Data Protection By Country. Retrieved July 24, 2013 from http://heatmap.forrestertools.com/#

Google. (2011). Making search more secure. Retrieved July 16, 2013 from http://googleblog.blogspot.com/2011/10/making-search-more-secure.html

Li, J. (2013). Study: Online Shopping Behavior in the Digital Era. Retrieved July 28, 2013 from http://www.iacquire.com/blog/study-online-shopping-behavior-in-the-digital-era/

Pollitt, C. (2013). Google’s Unknown Keywords Jump from 22% to 55% in the Last 30 Days. Retrieved July 12, 2013 from http://www.kunocreative.com/blog/bid/72355/Google-s-Unknown-Keywords-Jump-from-22-to-55-in-the-Last-30-Days

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2 Responses to “Striking A Balance Between Consumer Privacy and Marketing Analytics”

  1. Mike Kohler Says:

    Posted this on FB, Jerome, but just wanted to bring it directly to your attention. Fascinating study.

    http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/

    • Jerome Brown Says:

      It really is quite amazing when we think about all the data that we unintentionally provide when we go about our daily activities. We think no one is watching (and this sounds paranoid, but isn’t meant that way), but many organizations are. Patterns are fairly easy to establish through proper analysis and if someone at Target, BestBuy, WalMart, etc. knows to create an accurate query, they can be provided with very intimate shopper details. Thanks for sharing the study.

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