Privacy Advisor

An Interview with the Experts on the Value of Surrendering Privacy

July 1, 2006

Featuring: Bambi Francisco, noted columnist with Dow Jones MarketWatch, is the author of their popular Net Sense column. Her recently published article on the "Transparent Society" became the inspiration for this interview.

Alan Chapell, CIPP, is president of Chapell and Associates, a research and consulting firm that helps online and technology companies increase the transparency of their business practices. Alan is known for his work in the establishment of best practice standards for privacy and responsible marketing and today is recognized as a leading writer and frequent speaker on topics such as privacy permissions management, click fraud and behavioral targeting. Alan assumes the role of moderator.

Alan: In your article, "The Transparent Society" you commented on the increased willingness of many consumers to share what once was viewed as private information. Please provide an overview of that article and share what you believe are some of the benefits of giving up one's privacy.

Bambi: The column is about the willingness of society to be transparent or less private and that it's a conscious choice we make. I will discuss later how I came up with that conclusion but let me just say that society chooses to be more transparent because of the added benefits. One, we allow services to store information from our computers as cookies which track our activity, allow us to not sign in and not have to reregister for the website knows who we are.
Two, we give up information about who we are; our interests, hobbies, networks on community sites offering the benefit of meeting like-minded people and growing your network. You receive some recognition, or possibly not, or you can help others. And, three, we give up information about what we have purchased on many sites and the benefit is that these services begin to learn our likes and dislikes and make recommendations toward our future purchases. So, we do give up a lot for a lot of benefit.

Alan: When you talk about giving up your information I wonder if that is always a conscious decision made by consumers. When you talk about cookies, how many consumers really actively understand or know that cookies are being used on them? Maybe another example would be Facebook or the social networking sites. How many consumers really understand what the implications of providing that kind of information are?

Bambi: I would say a number of people in the mainstream may have heard about cookies, but have no idea that you can actually disable cookies on your computer. I think when you talk about the consumers on Facebook, you are talking about a very different group of consumers. They are pretty savvy. They have probably been on computers since they were in elementary school, so I think they have a better sense of what is online and what cookies are, and they probably clean out their computers every week if not every month. I just talked to four college students, around 20/21 years old, and they had just a created a new company. I asked, "How did you create that?" They said, "Well, we just used our parents' money and we had a server laying around." And, I said, "You had a server laying around?" (I didn't have a server laying around when I was in college.) Again, you are talking about mainstream and then you are talking about the new generation or the younger generation. I think the younger generation probably pays a little bit more attention or is a little bit more cognizant about stuff on their computer that is tracking what they are doing.

Alan: That is an interesting point, but I wonder even with the younger generation, as they become more aware of some of these implications, is there going to be less of a desire to be sharing personal information? I will site a couple of examples and admit that this isn't hardcore research. These are directional at best, but there are a couple of stories out there where people have been denied jobs because somewhere online was a picture of their college frat party days. Or another example is some people who are 18/19/20 years old starting to report on MySpace or starting to indicate to MySpace that they are actually under 13, with the reason being, they want to protect their anonymity a little bit more. I am just wondering if that might contradict some of what you are saying.

Bambi: No, I think that there is a trade-off and people typically, and I can talk about the younger generation as well as even people over 30, who probably don't realize the trade-off they are making. They typically give up certain information or photos for an immediate direct benefit and that benefit is either sharing with their friends or maybe starting some sort of buzz  - at some point that information comes back and haunts us or haunts them. They realize they have actually sold that personal information, thinking it wasn't a risk, that they were just giving that information and getting more of a benefit when down the road they realize they have risked a lot more. I think to your point, we really haven't seen a big story about a privacy issue. We are seeing and hearing a little bit more of what you mentioned. I heard some rumblings of that probably in the Fall when the social networks started becoming a little bit more notable and popular. I think that people will tend to not view the risk as immediate.

Alan: Just last night I saw on NBC Dateline where they set up sting operations for online predators. People who are 20/30/40/50 years old are talking with 11/12/13 year olds on MySpace and other social networking sites and it turns out there is an elaborate sting operation. I wonder if that is going to raise the overall social consciousness a little bit.

Bambi: I hope so.

Alan: In your article, you talked a little about Amazon.com and I think they are a great example of a company delivering such a benefit. Can you distinguish the benefit between providing information kind of on a one-to-one relationship with a trusted business vs. providing it on a social networking site where anybody and everybody can take at look at it?

Bambi: There is a clear distinction between offering up your credit card to a trusted retailer like Amazon or going onto your blog and making that public. There is also a distinction between sharing your pictures and photos with friends and in a closed and private environment vs. posting a photo on MySpace or Facebook like you mentioned.

Alan: Another thought is, we are talking about kids providing information on MySpace. I wanted to distinguish between providing information on MySpace to providing information to businesses, based on some of the research I have seen from the great work Parry Aftab's group has done. And Norcastle Partners is another research group that has done some great work on kids and teens and tweenagers.  What we are seeing is that younger age groups are actually much, much more likely to lie when asked for personal information from businesses. I am not sure if there is a question hidden in there other than just making that observation. I am really trying to draw that distinction again between providing a business with information and the willingness to display it out there for anybody to look at. My conclusion is that, and I would love to hear your thoughts on this, too many people are just unaware of the implications they are providing with that information. I think when they see a business using it, there is a thought the business is going to use it to bother them.

Bambi: I think what you are implying is that kids are actually very savvy and smart and they are not going to be willing to give up that information and that they don't trust businesses - and that if they want information, they are just going to make it up. Maybe they are really savvy and realize the potential risk. I have done it. Part of it is just my own testing and part is that a lot of these people who are setting up these services don't actually know what they are asking for, or may not know what they need. I think it is a big learning process.

Alan: This is a challenge for just about anybody in the relationship marketing business. What information do you really need? Then the big question is how are you going to use that? And, the third component, are you actually using it? I see very few companies really executing as effectively as they potentially could.

Bambi: I think Facebook is trying to provide that sort of trusted environment where most everything that you put on that site could be made up but that you are a legitimate person, that you are a certain majority, as opposed to MySpace, where you can pretty much have any identity. They don't even track that. One of the things I am starting to notice is that there is a process of actually having people look over what people are sending in to make sure it is appropriate for a particular site. I keep bringing up the privacy aspects.

Alan: I think it is an interesting point nonetheless. I think what you are going to have to see with many, if not most of these sites, is really two things. One is, some monitoring capability where there is some ability to see who is uploading information and what it is. The other thing I think that may become necessary, and it sounds like Facebook is doing a better job of this than maybe others in this space, but some ability to provide some level of authentication regarding who you are. That implicitly gives up at least some level of privacy and some people may not be entirely comfortable with that. I know that you are seeing that with some of the online dating sites where they are trying to make a conscious effort to do background checks and similar things.

Bambi: Yes, that is why you have those labels "trusted sites" on the Web sites, so you know that as a consumer you know how to interact with them. That is why consumer ratings are so popular on eBay, because you know that you will be more likely to transact with a merchant that has already received high marks. It is interesting. It has only been around for the last 7-9 years, but I start looking for user ratings all the time when I go online.

Alan: One more question to touch back on the subject of cookies. I come from an online marketing and research background and over the last year or two there has been a good deal of scrutiny around cookies and what they call online profiling - building a profile about a particular consumer based upon the sites they visit or the search terms they enter - and putting that information into cookies and then using that downstream to serve more relevant advertising. I wanted to talk to you about this, because you focused so much upon transparency. There are some companies in that space that are looking to allow consumers to actually view the profiles being developed on them. Do you think that is where the industry is going to go or where it should go? Is that generally something that consumers would find valuable?

Bambi: I think profiling is valuable if we are talking about profiling, meaning how you behave online, where you are going and what you are buying and what sites you visit. I think it becomes a contentious privacy issue when you
connect the profiling and the surfing with a person's name, personally identifiable information of that person and their credit card. Profiling/storing where you are, then storing what you bought, storing any type of service that you have used, is helpful for a consumer in the future. If you are looking for a virtual personal butler, you need to share the information with someone else and share it with technology which allows someone to store it. I applaud privacy advocates for standing up for those who are indifferent or maybe need some protection, but I think that needs to be up to the consumer, because if you want that level of service, you are going to have to allow for a certain amount of profiling.

Alan: Maybe part of accepting it is just that the default with almost every new technology seems to be that you are
giving up some privacy. Even if there is an opt-out of that process or that additional transparency that you are providing, very often it isnall that easy to find. You are finding consumers, many of whom don't have strong feelings on these issues, certainly aren't looking for the opt-out mechanism.

Bambi: Yes. They don't look for the opt-out. Some may. Those would be considered the privacy fundamentals. They may not even consider themselves that, but that is who they are. I remember meeting with this company, Grouper, back in 2004. They came to me with a site about sharing photos and pictures just with family and friends. That was well before video-sharing became popular, and they made it private. You had to choose who your private network would be and it was very slow. They found it a hassle to figure out who would be in your private network and the creation of little groups. Once they made it public - meaning once they said, 'Upload your photos and everyone can see them,' - it took off. People were actually willing to be more public.

Alan: So perhaps the desire for 15 minutes of fame is stronger than the desire for privacy.

Bambi: I think we all want to be recognized.


This interview is available in its entirety as a podcast on the IAPP's Web site, under Resources.