1. 1.    Privacy:

 

Privacy is a very interesting issues due to the fact that it has changed greatly over the years. When DoubleClick bought Abacus in the 90’s there was great debate over bringing together offline and online data for the purpose of ad targeting. Ultimately, it was agreed to keep the businesses separate. However, Double Click could not even really use that data or fuse it together in a coherent way since real time ad targeting would not become possible until 7-8 years later. All the hoopla, a solution to a problem that didn’t really exist. The key issue at the time was consumer advocacy. As a consumer its scary when someone can target me with advertisements. If you’ve seen Minority Report, with Tom Cruise, you’ve seen ads changing as you move through the street. This is actually possible today (though retina scanning isn’t generally used for it!). However, also as a consumer, at least most consumers, will trade privacy for anything: free content, a nickel or anything else.
Before going into the issues, it is important to look at the various kinds of data that is out there and how it all comes together:

 

  1. 1.    Credit Files:  This is your credit report files. Your mortgage and financial status is determined on it. Did you know that your credit score was created by a private company (FICO) and that your credit reports are housed by private companies (Experian, Equifax, Transunion). These are very sensitive. If someone steals your identity and say takes out a mortgage, it is then written to your credit file and it can be very difficult to get it removed.

 

  1. 2.    3rd party data: Any marketer out there can append data to your file using fields such as address, email or phone as a ‘key’ to match against. This has been going on as long as I can remember as marketers can trade and buy data to make their own marketing smarter. There are so many rich data sources now such as facebook, twitter, etc… that it very quickly can become a very deep user profile.
    1. Vendor purchase histories:  your history of stuff that bought from vendors are often resold
    2. Data Appends: Experian will sell you 200+ data points on you. Rapleaf has very powerful data sets tied to email.
    3. Public Records: there is a TON of data that is available publicly, some tied to zip codes, others to addresses and others to individuals (such as your voting history)

 

  1. 3.    Online Cookie Data: when you visit a website, a cookie is dropped on your computer and that cookie can track where you go on the web. While there are more advanced cookies (Flash) and deeper tracking (toolbars/browser level) it all functions basically the same. The cookie tracks where you go, where you click etc… and reports back. Then based on your behavioral pattern, you are served ads you are likely to respond to.  This leads to higher quality (though sometimes scarier) advertising and is essentially the first step towards the advertising in minority report. With cookies and behavioral targeting (which simply means based on your web based user behavior)  you are trading content, generally free for ads you will likely respond to – which should be better than random ads anyway.
  2. 4.    Geolocational mobile data: This is deep tracking of where you are based on either your mobile device or where you check-in on services like foursquare or facebook. This data allows a retailer to show you a coupon when you are around the block. Also by checking in to foursquare you are opening yourself up to stalking as people will know where you are. The way to protect against this is with awareness though.

 

Privacy can be broken into 3 issues:

 

  1. Data Security:  We read about cases of credit cards being leaked all the time. This  is in fact a serious issues. The data security that you need to worry about is sensitive financial data. Cookie data is never secure. You can see your cookies on your browser and it really doesn’t do anything but allow better ad targeting. The data you want to make sure is secure is your financial data and social security number. Currently, all data is being bunched into the same bucket though there is a huge difference between data that can harm you  (your credit card numbers) and data that can help you (targeting).
    1. An important thing to look at here is penalties. Visa often fines merchants for data breaches, which is used as a tool to extract more revenue. However, Visa is not fined enough for allowing breaches to occur. This data is sensitive.
    2. Mobile: Apple may say they won’t share your UDID (personal identifier) for privacy reasons yet they track your geo without telling you and using your UDID for their own ad targeting. At least on the surface that appears what is happening with Apple.  All carriers you have to assume are tracking you.

 

  1. Transparency (optin/optout):  Another important issue is transparency in that consumer have the right to know their data is being sold and shared. The truth here is that sure you can disclose anything you want in a privacy policy though most people never read it. Not even most enterprises. While it’s a hot button issue and sounds good, doesn’t mean much. For legal reasons, policies should have clear disclosures that data is being shared though the practical reality is that it won’t impact people much as they generally don’t look.

 

  1. Connectivity: This is the though issue in that if you are on a phone, you should assume you are being followed by your phone company – unless you want to go back to analog phones. Assume over the next 5 years, your data will be combined so that based on your phone, your web surfing, purchase and credit data will be merged by big companies to understand who you are and literally where you stand. We can legislate against it though in the long run, it helps consumers as it gives them better access to relevant content.

 

      Digital Industry Perspective:  Industry wants the ability to track and target you wherever you are and build as deep targeting profiles as possible. This makes them more money, enabling them to spend more on content and gives consumers a more relevant experience.

 

      Consumer Advocacy Prospective: Its scary that you’re watching me. I want to know your watching me and be able to opt-out of being stalked by evil advertisers.

 

      Non Digital Industry Perspective:  Data is pervasive. I want to understand how to tie my data into digital so im not left behind and I want to be able to use the data as much as possible.

 

      Practical Reality: Consumers want free. Free costs money. Better advertising doesn’t cost the consumer anything so it’s a natural tradeoff. Just need to make sure everything is disclosed (for what its worth) and penalties in place for serious financial data breaches. If someone ties digital targeting with payment information together it’s great for billing though it should come with stiff penalties for putting people at risk if you lose the data.

 
Key Takeaways: (note: opinion)

  1. Your personal financial information should be sacred and you should have the ability to control how its used for your own credit purposes to protect against identity theft. There should be stiff penalties for letting financial information slip in that if you let info slip, anyone whose record you let slip that gets identity theft within 12 months, you should be liable for whether its traceable to you or not. That should be enough of an incentive to take better care.

 

  1. Transparency should be there though is not really super relevant and there should be a clear opt-out of data collection. Carefully regulate ad data so that it is clear people are watching and targeting you.