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Consumer Privacy - is it really that big of a deal??

From: <richard_at_tenagra.com>
Date: Wed, 31 Mar 1999 16:28:32 -0600 (CST)

Hey all,

This story came out today.

IBM Shoulders Consumer Privacy Wired News
http://www.wired.com/news/news/business/story/18858.html

In essence, it says that IBM has announced it will pull its
online advertising from any site without a privacy
statement.

This stance is an outgrowth of the Federal Trade
Commission's report to Congress in June of 1998, which you
can view online at:
http://www.ftc.gov/reports/privacy3/toc.htm

I'd like to know if others think this is a real issue or a
bunch of crap.

Here are my opinions:

1.) Reading some of the FTC report, I find stuff that is
written in a vague and misleading way. Example:

"Web sites also collect personal information through
means that are not obvious to consumers, such as
"cookies."

If someone has figured out how to collect personal
information with just cookies, I'd like to shake his/her
hand. Cookies cannot divine the contents of your wallet.
Cookies can encode personal information, but only after the
consumer gives it (thus becoming obvious to the consumer).
This simple law of computer programming contradicts the
FTC's statement.

2.) Another thing about the FTC report is more than 50% of
it deals with collecting information online from children.
Yet it is lumped together and presented as consumer privacy
online. To me, they are separate issues. Children do not
have enough experience to understand the ramifications of
giving out personal information. That makes them vulnerable
in a way adults are not.

3.) The FTC report references only two studies to support
its claim that privacy is a major concern among consumers.
The first one, "Commerce, Communication, and Privacy Online,
A National Survey of Computer Users" by Louis Harris &
Associates and Dr. Alan F. Westin was done two years ago.
The second is a Business Week/Harris Poll done a year ago
(March 16, 1998). From this they concluded:

"...consumers will continue to distrust online
companies and will remain wary of engaging in
electronic commerce until meaningful and effective
consumer privacy protections are implemented
in the online marketplace. If such protections
are not implemented, the online marketplace will
fail to reach its full potential."

I'm curious to see what the methodology of these reports
was. The conclusions are counter to my admittedly limited
experience. I've seen people countless times willingly give
personal information online. (My girlfriend runs a site
where people frequently fax and e-mail her their credit card
numbers for products.) The online auction phenomenon is
another example of the consumers willingness to pass
information to parties with which they have no previous
relationship. Would IBM have us put up a privacy statement
to sell our Furbies on E-bay?

It seems that it is more a matter of if you trust the
organization to which you are giving your information and
you want what they are selling. (I'm curious if any one has
done a study of if more consumers fill out an online form
with a privacy statement versus one without a privacy
statement.)

4.) And if this doesn't sound sinister, I don't know what
does. And I quote (from the FTC report):

"Web sites can also collect information about
consumers through hidden electronic navigational
software that captures information about site
visits, including Web pages visited and information
downloaded, the types of browser used, and the
referring Web sites' Internet addresses."

Hidden electronic navigational software?? I think the
"non-conspiracy" term for this is Web server.

The reporter of the Wired story asked me if I thought the
IBM move was significant. I do in that it is a significantly
clever PR move on IBM's part. They took a "hot" issue and
came out supporting the popular way of thinking. IBM might
as well as have come out in support of not beating baby
seals. The fact is all the major sites on which they
advertise already have a privacy policy (and that is all IBM
is asking for, not if the sites truly follow it). I highly
doubt IBM would pull any ads if it meant they were unable to
spend half or more of their online budget.

What I really wish is that someone would speak out about the
real issue here - that there is incredible misinformation
going out to consumers through mechanisms like the FTC
report about what we as marketers can track. The fact is the
Internet makes it easier to collect information, but it
doesn't make it easier to process into a useable format. If
anything, that problem is worse than ever.

Opinions?? (I'm sure you have some.)

richard

--------------------------------------------------------
richard hoy
moderator, online advertising discussion list
vice president, marketing and client promotions
the tenagra corporation
http://www.tenagra.com/
p: 281.480.6300 | f: 281.480.7715 | e: rhoy_at_tenagra.com
--------------------------------------------------------














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Received on Wed Mar 31 1999 - 20:51:33 CST


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