This weekend, the Wall Street Journal supplied readers with a detailed look at the world of data mining. The tone of this massive article is one of shock - websites are tracking your behavior! The surveillance state is upon us! But in some respects it is the surprise that comes as a surprise.
In fact, it should be obvious to anyone who has been paying attention to the Internet, and especially the social media revolution of Web 2.0, that data mining and tracking software is the killer app of e-commerce. Before the Internet, companies had to rely on market surveys and anecdote in order to track the behavior of their customers (and, even more importantly, their potential customers). Data was often unreliable, and even when it reflected consumer preferences it was often received months after the relevant transaction.
The Internet, and particularly the interactive aspects of social media, suddenly provide industry with a wealth of tools to understand their consumers and build correlation models to better comprehend what they do and why they do it.
But with the power of these powerful insights comes an obvious dark side: in order to get that information, you need to snoop. The big question in all of this is whether consumers are complicit in this snooping (in other words, do they understand that they are exchanging access to cool things on the Internet for less privacy) or are they largely unaware of the extent to which everyone now knows the details of their browsing life.
Companies like to think that everyone knows - that everyone can read their privacy policy, and no one has any right to complain. After all, they don't have to agree to use their sites. But the FTC is not so sure that this type of knowledge can really be imputed to consumers. In fact, just this past week something very interesting happened.
On July 27, 2010 FTC Chairman Jon Leibowitz told a Senate panel that it was considering a "do not track" registry. This idea, which would presumably track the logic of the FTC's popular "do not call" registry, would represent a dramatic change for online marketers. "[C]onsumers could opt out of behavioral advertising more easily, rather than having to make choices on a website by website basis," he said.
If this idea comes to fruition, it will force everyone to reconsider their activity in the behavioral marketing space. But why wait? Instead, you should start thinking about it right now. How are you gathering information from consumers, and what are you doing with it? Are you installing tracking software on their computers? What types of disclosures are you using?
The answer to the question of "how far is too far" in this space will vary from company to company, of course, but you need to think through your plans, and how they mesh with consumer expectations. Right now. If you don't do it, someone may do it for you. And sooner than you may think.