Art & Commerce: Consumer Republic

Why are people willing to trade privacy for discounts? Last week, in an effort to raise the comfort level of interactive consumers--not to mention the Federal Trade Commission--a consortium of Web marketing intermediaries, including DoubleClick, Adknowledge, Flycast Communication and Matchlogic, met in Washington to outline their plans to protect the privacy of Joe and Jane Web Surfer. Published privacy policies, which are showing up on Web sites, are only the beginning. Soon, courtesy this group, there will be a techno-idiot proof means for consumers to opt out of Data Nation. Privacy advocates remain unimpressed. True, cynicism about marketing is never inappropriate; but it may miss the mark here. Online marketers can afford to be sincere about yielding to consumers' demands for more control over the data trail left by their consumption. Happily for the data miners, consumers don't necessarily want to withhold personal information. All many desire is a bigger say in giving it away. They're demanding control over their privacy, not privacy itself. A recent survey conducted by Primary Knowledge, an e-business optimization company, and Internet research firm Greenfield Online suggests that for online consumers, the privacy issue is a red herring. Seventy-six percent of those surveyed said they believe their every mouse-click is tracked, but only 8 percent said that knowledge influences their online behavior. Strong majorities are willing to trade information for benefits: 76 percent said they'd do it for "miles" or "points," while 73 percent would exchange data for members-only discounts. No doubt if this survey were conducted with respondents who'd never been on the Internet, the answers would have been different. The unconnected are more likely to be creeped out by invisible stalkers. But then, few marketers care about such consumers, who will either die off or ultimately go online. On one hand, the Internet and all the interactive technologies to follow create unprecedented amounts of data about individuals. Yet at the same time, that point-and-click convenience makes us less, not more, sensitive to the risks involved. After all, people go online precisely because they want to be part of the great electronic give-and-take. The ability to connect--to friends, taste cohorts, information communities and, yes, marketers--is the Web's main product benefit. It attracts people who want to opt into, not out of, the information flow. Fatalism plays a role, too, in people's willingness to share personal data. Banking reform has merged banks, brokerages and insurance companies into financial megacorps. Your loan officer can access your medical records--and there's nothing you can do about it. Consumers know someone is benefitting from their personal data. So they figure, why shouldn't it be them? There are benefits to going with the data flow. A year ago, I involuntarily "opted out" when I moved and the direct mail databases temporarily lost track of me. The stream of catalogs to my mailbox dried up--and I hated it. How could I chart the drift of mass middle-class taste without my monthly Pottery Barn catalog? What developments in postmodern lifestyles was I missing in the absence of Williams-Sonoma? I was losing touch with a vital information source. If the cost of regaining that information was my purchasing data in a strange computer, so be it. Needless to say, the data catchers have caught up with me. But after my brief sojourn in the direct mail desert, I understand why only 3.4 million of us exercise our right to delete ourselves from mailing lists. The good news for that minority is that if the online industry follows through on its self-regulating initiative, we'll retain the right to defect from Data Nation. But there's a cost to opting out--and it's going to get higher. Resisters won't just get left out of the information flow; they'll become second-class consumers. They won't have access to the same services as those who provide the information a site requests. They'll pay for items and services the info-volunteers get free. They'll have to settle for mass solutions to their problems, while their counterparts use their data to buy personal ones. The incentives to cough up personal information or allow it to circulate freely will multiply--and the disadvantages of withholding it will become more onerous. Once personal data becomes currency, all the best privileges and perks will go to those who sell it. Online marketers happily promote the consumer's right to bow out of the data loop--as long as they make sure it's an option nobody will take. K

Brand Marketing

Art & Commerce: Consumer Republic

Debra Goldman

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Debra Goldman