Privacy Advisor

Protecting the Trust of Consumers and Advertisers

September 1, 2003

Dave Morgan

Privacy is a concern that uniquely plagues the online industry. Whereas consumers don't seem to mind when their account balance, in-store transaction, catalog purchase, or magazine subscription information is sold, or that security cameras record their comings and goings, ask them to click a few buttons and fill in a few fields on an online form and hear the outcry.

There is likely more to fear in how offline personal credit records are compiled than in whether cookies are tracking you when you click an Internet ad, yet the public remains convinced there is something sinister about the collection and use of online data.

Or do they?

Privacy vs. Trust

Consumers rightfully complain about the intrusiveness of pop-up and pop-under ads and the incredible amount of irrelevant spam filling their inboxes. They suspect they've become targets when they complete online registration forms, sweepstakes entries, e-commerce orders, or newsletter sign-ups with their e-mail addresses. These complaints are regularly offered by the press and by privacy pundits as evidence of significant consumer concerns about violations of their privacy.

But is the concern about privacy — or trust?

Most people don't read privacy policies or have a clue about privacy laws and regulations; consumer angst comes not from privacy violations, but from the abuse of trust. According to a study released recently by the Annenberg Public Policy Center of the University of Pennsylvania, "a solid majority of U.S. adults who use the Internet at home misunderstands the very purpose of privacy policies," and they "have no clue about data flows."

Blind trust drives most Americans when they enter information on a registration page, download an application that they think will be helpful (or have been warned is essential), or blindly surf the Web while being "beaconed." They trust until they are burned and learn that their trust was misplaced. That is how they deal with every other business relationship, from media companies to telecommunication providers, from services and utilities to retailers. The Annenberg study tells us that fully half of Americans who don't want their personal information shared among companies will readily give their real name and address to their favorite Web site if asked.

This erosion of trust has a significant impact on the ability of the Internet to take its rightful place as an important advertising and marketing channel for businesses around the globe, and raises the question, "how do we start building long-term trust with consumers and advertisers?"

Building Trust

First, as an industry, the online advertising community must find ways to control those practices that irritate and offend consumer and advertisers the most and we must help stop unwanted spam. Consumers can differentiate between relationship- based communications received from legitimate marketers vs. non—permission-based solicitations.

According to DoubleClick's Q1 2003 Email Trend Report, e-mail marketers will see the most success by forging strong relationships with customers based on trust. The report says, "Marketers can build upon these relationships by asking their customers about the type of content they would like to receive, as well as how often they want to be contacted."

Many of the names that are sold in our industry as "opt-in" are nothing of the sort. Too many of us operate under a "don't ask, don't tell" policy. If we don't explicitly know that an e-mail list was improperly harvested, we don't really care. We just want more fresh names to sell. If we don't act as an industry, legislatures will (there are a half dozen bills in the House or Senate right now).

Second, we must begin treating consumers and their data with more respect. They should be given real notice of what we are doing and a real opportunity not to participate. We should do this in practice, not just in legal theory. We should end the tricks and gimmicks or end up in the same place as subscription clearinghouses (remember them?) after the courts and legislatures stepped in.

We should stop trying to fool or scare consumers into giving data because they have been told that their computer is in desperate need of cleansing, optimization, or a desktop utility that will tell them the time, but is really only there to suck every bit of their personal browsing data out of their machine and send it back to a third-party data collector to resell for direct marketing purposes. I suspect consumers who download these tools neither know nor understand the application's actual purpose.

In registration, we need clear and simple language informing what data is being captured and what the consumer can expect will be done with the data (not "we will not sell or distribute consumer data to third parties under any circumstance").

In the delivery of ads and syndicated content, publishers and Web services with direct consumer relationships should be explicit about what information is being captured, how much, and by whom, and even take a stronger role in evaluating and potentially blocking much of the data being captured. Third parties, like ad servers, should take significant steps to actively inform consumers of what data they capture and what they are doing with it. Very few consumers realize that with every ad banner and Web page downloaded come innumerable Web beacons and cookies from third parties. If the publisher or Web service or third party does not tell them explicitly, how else will they know?

Third, as an industry we must actively develop and promote best practices in the capture and exploitation of consumer data and targeting advertising. We need to put aside competitive differences and help support the many industry initiatives being driven by organizations like the Interactive Advertising Bureau and the Online Publishers Association to help us grow our industry responsibly.

Finally, we need to vigorously police ourselves and call out those with data practices that are improper, unethical, or illegal. As an industry, we have looked the other way too many times. We can no longer afford to make the same mistakes — at the cost of consumer trust.

Dave Morgan is CEO of Tacoda Systems (www.tacoda.com), a New York City-based developer of online advertising and transactional profiling applications. Morgan can be contacted at (646) 674-2721, or via e-mail at dave@tacoda.com.