Friday, December 4, 2009

Does Behavioral Tracking Threaten Consumer Privacy?

According to a recent study by researchers at the Universities of Pennsylvania and California at Berkeley and sponsored by the Rose Foundation for Communities and the Environment, consumers think it does! Whatever marketers themselves think, these opinions threaten behavioral advertising, and we should take them seriously.

The New York Times had an excellent article when the report was published. It’s an important report, and I’d encourage you to use the link in the Times article and download it to read the entire thing. You will find careful methodology and a carefully chosen, if not huge, sample.

The findings are what’s most important, and here are two of the key ones:

• Even when they are told that the act of following them on websites will take place anonymously, Americans’ aversion to it remains: 68% “definitely” would not allow it, and 19% “probably” would not allow it.

• Americans mistakenly believe that current government laws restrict companies from selling wide-ranging data about them. When asked true-false questions about companies’ rights to share and sell information about their activities online and off, respondents on average answer only 1.5 of online laws and 1.7 of the 4 offline laws [questions] correctly because they falsely assume government regulations prohibit the sale of data.
(pp. 3 & 4)

I think the incorrect beliefs about government regulations contribute to the aversion problem; it’s another instance of people feeling duped when they find out the truth. This is a societal problem, not a problem for any one business. Still, individual businesses can be open and honest about their own activities, building trust as they do so.

Both these issues are important but let me present just one chart on aversion to behavioral tracking with the two columns you need to compare highlighted.
First, note that the respondents are more willing to allow tracking when it produces discount offers they want. We’ve been seeing a lot lately about how intensively consumers are using the web to look for promotions and discounts, so that makes sense.

Second, lower table, when the question includes specifics about the information used to tailor the ads, discounts and news, the percentage of people willing to accept goes down—a little less for discounts, but they all go down. Look further; when information is brought in from other websites (the essence of behavioral advertising) or from offline, the willingness to accept plummets.

The full report also had a breakdown by age segment. Younger people are more willing to accept the tailored offers than older ones, but there’s not as much difference as I expected. And younger people show the same pattern of being less willing to accept tailored offers when the source of information is specified.

This is disturbing to the Internet marketer, and there is no easy solution. There have been a few meager efforts by coalitions of businesses and trade groups to better inform users about the nature and benefits of collecting and using consumer data and the differences between anonymous and identified data. The efforts appear to have been half-hearted and it’s clear that they had little impact.

Worse, that’s the only real solution I can think of. Do you have any better ideas???

In the meantime, keep building your trusted brand!

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