Debra Goldman's Consumer Republic

Do you know me? Not if American Express can help it, say a recent pair of witty self-referential ads touting AmEx's new privacy products. As explained by Joe and Jane Web Surfer, their faces pixilated like the perps on Cops, the new program allows card holders to buy online without sending their real credit card number through cyberspace, thus exposing it to data bandits.Later this year, the ads promise, an additional product will address the legal side of data stalking: software that will allow consumers to travel the Web without leaving a trail of electronic crumbs for marketers to follow. "Don't leave home pages without it," they conclude. Some cynics might say relying on a financial-services firm, with its minute records of every customer purchase, is like relying on the fox to guard the henhouse. But AmEx reads the polls, and the numbers tell us that consumer concern over privacy is at fever pitch. We fear both the identity thieves and the marketing voyeurs. The Internet has us so spooked that some Americans feel that peeing into a cup for one's employer is less an intrusion on privacy than being followed by an ad server while buying a gift online.For many Internet users, the ads for the AmEx products will be their intro to the click-and-cloak software that has emerged online. The most recent survey from the Pew Internet and American Life Project, conducted this summer, shows that a lot more online Americans are concerned about their privacy than know what to do about it. One in 20 Web users has used cloaking programs offered by services such as Anonymizer or Privada, which is supplying the software for the AmEx product. About one-fifth have sought to protect their real e-mail address by creating a second one for inquiring Web sites. And about one-quarter of onliners opt for the low-tech solution: They lie when asked to cough up personal info.The bad news for the data hounds is that the Pew survey indicates that the longer one has been online, the more likely one is to fake or cloak one's identity. This suggests that familiarity with the Internet does not build trust but erodes it. What the vast majority of online consumers really want, the study says, is an opt-in Internet. Since marketers are working hard to make sure that's not likely in the near term, the immediate future of the privacy war is an arms race between the software of the data catchers and the software of their prey. The irony of the weapons build-up is this: It remains unclear that either the data or the privacy is worth the fight. The assumption that all this click-stream data is economically useful is unproven. Much of this data is being collected because the technology allows and even encourages it, not because anyone knows what to do with it.Indeed, we already know that targeting reaches the point of diminishing returns. Increases on return on investment shrink the more finely a market segment is sliced and diced. Besides, if those servers, their computers bulging with data, do such a good job targeting banner ads to prospects, why are click-through rates so dismal? There may be less to gain from these vast data stockpiles than marketers hope—and less to lose than consumers fear.Consider the case of a Web-savvy friend of mine. She's been engaged in a research project that sends her looking for sites about body image—everything from amputation to piercing to tattoos. After doing this work for a while, she found that when she logged on, she was greeted with banner ads for breast implants. This marketing blitz puzzled her until she surmised "they" had been tracking her research travels across the Web. They decided she was the kind of gal for whom ads for implants would be relevant. They were wrong. Which shows that just because they can follow you, it doesn't mean they know where you are going. It happens my friend is amused that she is "known" around the Internet as a woman who feels inadequate about the size of her breasts. She sees it as proof that her true identity and desires remain hidden, leaving her existential privacy intact. Still, a lot of consumers would be outraged to be so misrepresented in the datasphere, and they are the potential customers for click-and-cloak software. But there is also perverse comfort for the consumer who asks of marketers, "Do you know me?" The answer, even in the era of surveillance and data mining, is no.

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Debra Goldman's Consumer Republic

Debra Goldman

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Debra Goldman