By Jared Chausow
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By Jon Campbell
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Target marketing. Selling is no longer focused on products but on customers. There are only so many ways to improve upon hand soap, but the amount of information about its buyers is a seemingly bottomless pit. More than any other medium, the Web facilitates what is known euphemistically as customer "relationships." Every click, every transaction can be archived and analyzed for new insights into consumer behavior.
Accountability. Half an ad budget is wasted, goes the adman's cliché--he just doesn't know which half. The Net stands to improve that ratio with an ability to track consumers unparalleled in other media. Nielsen ratings, box office receipts, and magazine audits are crapshoots next to the data the Web can offer.
What's more, the old revenue models are largely irrelevant. Advertising isn't paying the bills, and Web users seldom pay for content.
Thus, the way for sellers to maximize the power of the new medium is for users to forfeit privacy. Just about everyone making noise about privacy dances around this central contradiction, though, and for good reason: users don't want to give themselves up. The issue is the number-one reason people cite in public opinion polls for staying off the Web--a point not lost on privacy groups racing to establish industry self-regulation.
The industry has responded with two fixes: one a branding campaign, the other technical. The first is championed by TRUSTe, a nonprofit sponsored by AT&T, IBM, Excite, Netscape, Netcom, Wired, and others. Promoting itself as a sort of Better Business Bureau of the Web, TRUSTe licenses its Trustmark logo to be displayed on participating Web sites. To get the Trustmark, a site must clearly display a privacy statement disclosing the type of information gathered, how it will be used, and with whom it'll be shared; and the site must pay TRUSTe an annual licensing fee of $249 to $4999.
Unfortunately, as anyone who has ever actually clicked on a privacy statement knows, understanding one requires a good deal of specialized knowledge. In fact, those who know enough about data collection to understand a statement aren't really the people most likely to have a problem. It is the millions out there who'd respond to a Reader's Digest survey with intimate details about their health who need the most help.
Regardless of one's data savvy, who wants to click on and read a privacy statement--often up to two pages long--before visiting each site? (Worse, some privacy statements only apply to specific pages; one site could have several.) Talk about reasons to avoid the Web: brain drain, anyone?
Yet, ironically, the Trustmark works by providing psychological reassurance, by providing an honest front. Disclosure is no doubt helpful. You can't very well regulate Web sites without them acknowledging their practices. But disclosure also makes a handy straw man--as if the problem isn't that businesses are routinely collecting piles of data on their customers, but simply the fact that we don't know about it.
Another straw man: anonymity. TRUSTe and big media overpersonalize privacy abuse, playing up imaginary stalkers to deflect attention from the way corporations actually use data. TRUSTe's print ad campaign, for instance, pictures a grinning beach bum with the caption: "After 17 years, Matt is starting a new life. With your name and social security number."
If this ad expresses the realistic fears of anyone, it's the digiterati creating this stuff--the starry-eyed libertarians who want the ability to hide. While "identity theft" does happen, it's rare; data collecting conducted by corporations, on the other hand, is institutionalized. In fact, it's one of the key reasons corporations invest in the Web. But unlike some hacker/boogeyman or conspiratorial Big Brother, corporations don't want to know whom you're sleeping with, whether you like your boss, if you called mom this week. Companies don't care about you, only what you'll buy.
The "solutions" offered, then, include those like Engage Technologies (which is a sponsor of TRUSTe): new, higher-tech data-gathering systems that trace users without collecting names and addresses. The joke is that companies don't really need your name and address. What they need is a unique identifier--a number will do--to keep track of your preferences and actions so they can target marketing messages more efficiently.
If TRUSTe's campaign is successful, most people will see the seal of approval and feel reassured. What they're unlikely to realize is that TRUSTe does not prevent companies from collecting as much data as they want and trading it. TRUSTe simply requires that companies disclose their actions.
Ultimately, TRUSTe is about PR--by its own definition, "dedicated to building users' trust and confidence on the Internet, and in so doing, accelerating growth of the Internet industry." The message to Web publishers is clear: if you disclose privacy practices to users, you'll ultimately get more out of them.
In other words, privacy isn't necessarily the problem, the image of privacy is. Small wonder, then, that so many of the so-called champions of privacy are those who have managed to collect the most personalized data. Take software company Firefly, a specialist in "personal profile management online." Before it was purchased by Microsoft, endorsed by TRUSTe, and licensed by Yahoo, BarnesandNoble.com, and Merrill Lynch, Firefly's bread and butter was an online "community" predicated on data collecting. On its Web site, Firefly promised users that they didn't "classify you into a fixed demographic group." Yet the media kit to advertisers told a different story: "Firefly lets you monitor the status of a campaign, both demographically and psychographically. . . . Think of the Firefly audience as one large, prequalified focus group."
More recently, Saul Klein, Firefly's vice president, told Business Week, "The whole point is to put the [consumer] in control of personal information."
Of course, if Klein and the gang really wanted to put the consumer in control, they'd make not collecting information the default. They'd make companies have to request data rather than disclose what they've already done.
To its credit, however, Firefly is helping to implement a technical platform, P3P, to augment TRUSTe-style branding. Developed by the nonprofit World Wide Web Consortium, P3P will allow users to set their own privacy preferences into browsers. When Janey runs into a site that doesn't meet her preferences, her browser will send a pop-up warning.
For P3P to make an impact, it must become a standard, adopted by the browsers and Web server developers alike. Some heavy hitters (Netscape, Microsoft, TRUSTe) are already on board, however. If all goes according to plan, P3P will start appearing in products by the end of the year.
But--and this is a pretty big but--the factors that make the Web profitable (targetability and accountability) aren't going to go away. Once implemented, P3P won't mean squat if Web users aren't aware of how it works. The key: changing the defaults. When software incorporating P3P is available, chances are the default settings will favor corporate profiling. Routine practices such as trading to third parties and tracking and mining an individual's interests may not bring up the pop-up warning.
Considering that only 10 per cent of all Web users are said to ever change their browsers' default settings, this is no small hurdle. Like TRUSTe, P3P runs the risk of alienating those who need privacy protection the most--the untech-savvy.
Two basic musts that people need to learn: (1) When P3P arrives, change the defaults. P3P will encourage public interest groups to endorse their own "recommended settings." Users can then go to a trusted source--I'd recommend Electronic Privacy Information Center (www.epic.org)--and download their recommendations. (2) If there's one thing worse than no data, it's false data. When presented with online marketing surveys and questionnaires, LIE!