Why Do Not Track Hurts Consumers

Chains wrapped around computer keyboardEveryone is hurt by “Do Not Track” and other well-meaning privacy initiatives that  hurt the economy, reduce the number of online options consumers have for news, entertainment and research and could even change pricing of mobile phone, Internet, television and other plans.

Most business leaders would agree that any short-term gains generated by compromising customer privacy would be offset by reputation damage and may eventually drive an organization out of business.  But consumers may not understand what happens when they install ad blocking software or take advantage of Firefox’s proposed “do not track” flag.

By informing companies that they don’t want their activities tracked or they don’t want to see advertising on websites or smartphones, consumers will block  the activity that allows organizations to provide free and subsidized services.   Google said that today that they would make code available for Internet developers to embed this opt-out mechanism in future browsers, but even The Washington Post conceded that doing so might cause repeated or less relevant ads.

Smart advertisers aren’t tracking you–they are tracking the activities of a computer session to serve better, more relevant advertising.  That tracking leads to better advertising targeting which means the companies sponsoring the information and connectivity are more profitable and can continue offering free services.  Imagine a world where  you pay a membership fee for access to a search engine or for Facebook or to watch a video.

Advertising pays for all of the services and more, including subsidized telephone services, broadband pricing initiatives and a global economy where a small business in Europe can compete with a multinational conglomerate in Los Angeles for the same consumers in South America.

You must know that companies have to be paid.  Someone pays the employees, pays for the lights to be on, pays for the things we all enjoy now free.

Forget free applications and consider how your daily surfing habits would change.  Email would likely remain free, but would probably have more restrictive sizes that wouldn’t allow pictures or files to be transmitted.  Even browsers are advertising or product supported.

Two popular browsers, Mozilla’s Firefox and Google’s Chrome, are directly supported through donations from Google, an organization that creates almost all of its revenue from online advertising.  You don’t pay $29.95 to buy browser software as you were expected to during the web’s nascent days.  And that’s true in so many situations because online advertising is affordable and effective.

I know that because I help small businesses and non-profits generate more revenue from their online advertising efforts.  That profit means they can create new jobs, keep prices stable a longer time and fund philanthropic activities.  Today’s Wall Street Journal print edition featured a story about Mozilla’s “do not track” future capability on the front page of its Marketplace section.  Further inside the section and no coincidence was an article about The New York Times’ plans to begin charging consumers for access via Amazon’s Kindle and the Apple iPad.

The Journal called this “the biggest test to date of consumers’ willingness to pay for news they’re accustomed to getting free.”

Providing bandwidth, content and creating websites costs money.  When consumers realize that some of their favorite activities may now be unavailable for free, it may be too late to restore some of those services.  Online ads are effective thanks to the tracking mechanisms that make ads appeal to the proper audiences. If ads become random and less efficient, you just may pay for the privilege of telling law-abiding companies that you don’t want to be tracked while organizations who don’t follow the practice or are not based in the United States will do as they please.

Ad blocking and “do not track” initiatives are bad for America’s businesses and worse for America’s consumers who use free Internet services.

Source:  ”Web Tool on Firefox to Deter Tracking”, Wall Street Journal, 1/24/11
Source:  ”Times Prepares Pay Wall”, Wall Street Journal, 1/24/11
Source:  ”Google, Mozilla Detail New Privacy Procedures“,  Washington Post, 1/24/11
Source:  ”Do Not Track FAQ“, Mozilla, 1/24/11
Source:  ”Keep Your Opt-Outs“, Google, 1/24/11
Image:   Courtesy of Armin Hanisch

Scaring Customers

I talked with a grocery chain employee who shared a taste of how much data the company tracked on shoppers. Her words were a recipe for making me want to pay cash at her store except there is a surcharge for not showing your frequent shopper card.

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Her chain offers a choice. My telephone company and cable company don’t offer those choices. Neither does my ISP, which will bundle my surfing data along in a neat advertising package.

Services like Gist, Blippy, Google and the ever-ubiquitous Facebook means that you probably know a lot about your customers. And if you run a small business, your client base may be segmented fine enough where a small number of clients mean big bucks.

Monitoring them online has never been easier.

Before a friend went on a job interview, I used our competitive intelligence template to put together a dossier for her on the folks she was interviewing with. She had everything from Amazon wish lists to pictures of their homes (thanks, Google Street View) to political contributions and more.

Now, picture yourself interviewing this woman who misspeaks and shares some of this information. Wouldn’t you feel a bit violated?

But her having that information was not only easy to accomplish, but well worth her time because she could familiarize herself with things of interest to interviewers. Played smartly, that’s a great strategic advantage when competing against other job applicants.

And you can create the same advantage when talking with your clients or prospecting for new clients. Bear in mind, though, that our world has far too much information available free with little effort.

Genealogy is one of my hobbies (yes, you’re shocked that a search engine marketer likes to search history too…) and the explosion of new sites and databases has made personal privacy available to the consumer market for little or no cost. Clicking a button last week brought my brother-in-law’s birth certificate from the 1960s to my computer along with information about his parents. A few more clicks brought their information, including marriage and birth records, to me as well.

This information has long been available, but it’s only been the last few years that the data is available to everyone without qualification. And by saying the wrong thing, you could easily spook someone who wonders why you’re studying them so closely.

Your takeaway as a small business leader is to think about the information you compile and how you use that data. Sure, knowing a spouse or child’s name is great. By all mean talk about favorite sports or television shows. But tread carefully when you apply the information you’ve learned online to your conversation.

While you’re doing that, consider this wonderful video about what future privacy could look like. (Hat tip to Bill over at WinPatrol–a great security system– for posting the video and raising the questions again. And no, I won’t tell you how I know him)

Oversharing Dangers

Meet Thomas Richards.  He’s my  newest, bestest friend.  I can tell you more facts about Thomas then I can tell you about some folks I’ve known for years.

Mouse and credit cardsThomas, which isn’t his real name, is one of the lemmings who jumped on the Blippy bandwagon.  If you don’t know Blippy, the online service gathers your credit card, bank and other payments and publishes them online.  Using collaborative technology, the company allows you to create RSS feeds, invite your friends, follow each other, comment and so on.

Think of Blippy as your personal Quicken file pushed to the web and shared with your friends.

Now besides being a marketing treasure trove (any affiliate marketer can mine this data from Google or other search engines), the key issue here is privacy.   I’m still shocked at the number of people who insist that Facebook is ruining their privacy yet sign up for services like Blippy.  A year or two ago, I went to the hospital overnight for some tests.  I told three people outside my family.  But if I were a Blippy customer and set up my data feeds a certain way, everyone would’ve known.

Let me know what I tell you about Thomas.

  • First, that’s not his real name because I don’t feel like violating his privacy more than he has done.
  • He’s a software student at a well known tech college in the East and grew up in Detroit
  • I know the names of 10 people he follows and 9 who follow him (that’s what I call a nice open social graph)
  • I have detailed financial transactions from multiple merchants with direct feeds as well as multiple credit cards that show merchant name, date, amount and some other detail but maybe not exactly what was purchased.
  • As I write this, there are 459 financial transactions viewable for non-members using a search engine along with this guy’s real name.
  • And the names of his friends.
  • And he thoughtfully annotated some of his purchases.

Let’s talk dossier.  I know who he is and in about 10 clicks, found out his life’s history on LinkedIn and a few other sites. Then I used data he published to Blippy to learn:

  1. He’s a junk food addict.  Many 22 year olds are.   Buffalo Wild Wings is his favorite, but he’s at a junk food place at least every other day.
  2. He pays the minimums on the credit cards he’s hooked up to the site.
  3. He likes throwback music and is an active iTunes purchaser
  4. His hair cuts cost less than $20 (and buddy, you need to change that soon)
  5. Fueling his vehicle costs $40-$50
  6. He has an iPhone and actively buys apps
  7. He is taking calculus now and also bought an intro Flash book.
  8. He bought Esquire: The Man’s Guide to Looking Good and skipped the haircut section.
  9. He just bought tickets to see Wicked with his girlfriend Kathy.  (yes, I changed her name too)

Look, he’s pushing 500 transactions to the web.  And he used his real name.  And I know his tuition, his taxes how much he pays on his credit card and all sorts of things.   This isn’t voyeurism.  If I mine his data along with the other public data, I can quickly find offers to sell him and craft offers to him via email, direct mail, Twitter or Facebook.  If the subject is:  Special for [town name] fans of [sport] and [music] and I micro-target 15 of these guys, my conversion rate goes through the roof.  If I automate that, I actually make money.

A couple of simple scripts to scrape the public data, bounce it against other public data and I have a database of actual purchase history.  We’re not talking Facebook’s self-identified interests.  We’re talking real transactions.  The mind boggles at what a skilled marketer can do with this information.

I love people who do this because they make my job easier, but for the love of all that’s holy to you, stop sharing your locations on Foursquare and Google Latitude, stop sharing your transaction history on sites like Blippy and stop whining about privacy if you’re living life in public.

Google Listens, Retrenches Buzz

The automation in Google Buzz — a new social media area within Gmail — is less automatic.

The search company announced changes today that would make email addresses more secure.  ”We’re moving to an auto-suggest model. You won’t be set up to follow anyone until you have reviewed the suggestions and clicked “Follow selected people and start using Buzz,” wrote Google Buzz Project Manager Todd Jackson.

The product will also stop automatically linking to content users had previously made public such as shared items from blogs or photos from Google’s Picasa web service.  These items were linked to Buzz in a form of one-stop shop that made them much more visible and linked to people’s email addresses.

None of the issues may be as big as creating a separate “Buzz” tab on Gmail’s settings page that allows users to completely opt out of the system.  The settings page will allow users to treat buzz like they do Gmail’s chat feature.   Some may choose to link web content to the site and others may completely turn the feature off.

Google Buzz was a rocky launch and created copious amounts of negative press.   The company deserves extra credit now though for understanding the criticisms and quickly reacting.  Google may be a multibillion dollar organization, but the search giant still acts like a nimble startup sometimes.

Understand the Buzz changes before you activate the service.

Google Buzz Privacy – Fast Friday Fact

Yes, you’ve been buzzed.  We all have.

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The way that Facebook’s Beacon project or Amazon’s long ago Buying Circles shredded another layer of privacy.   Using Buzz it’s deceptively simple to share a private email address with a group of people.  Part of that is tied into the use of what is fast becoming an Internet standard:  an @ symbol in front of someone’s name.

Google Buzz includes an email address that you or your correspondent select as part of the reply.  So if I have one regular email address and another super-secret one and you use the @ reply with the super-secret address (maybe because it’s the one you have), you’ll send the email address out into the ether.

Google is rightfully taking lumps because the company didn’t explain this in this beginning.   The folks at Lifehacker have written the perfect primer on Google Buzz privacy.   I encourage everyone to read that work.

But before you go, are you using Google Buzz?  If so, what do you think of it, and did you know about the privacy issues?