The same battle has been raging for years. On one side are marketers whose success lies in presenting consumers with highly relevant messages and offers. That means mining consumer data for behavioral, psychographic, transactional and other information and/or purchasing multi-dimensional portraits of consumers from list providers and data brokers.
On the other side are staunch privacy advocates, some of whom happen to be senior members of the House and the Senate, who want to restrict such activity through government regulation and enforcement of data collection.
The latest skirmish was announced last month at the Direct Marketing Association’s annual conference. Their current round of ammunition consists of a website called the Data-Driven Marketing Institute and a million-dollar campaign devoted to raising public awareness about “the mischaracterizations of what marketers do, whether online or offline,” according to Linda Woolley, CEO and president of the DMA.
A million dollars is a joke considering how much money is at stake. Last year, spending on direct marketing was $163 billion (including more than $32 billion on digital channels). That’s roughly half the total amount of money spent on advertising in the U.S. last year. The figure will likely increase this year, especially now that consumer confidence has reached a five-year high, just in time for the holiday season’s direct marketing blitz.
Surprisingly, not much has changed in the decade that I’ve been thinking and writing about this topic. Marketers, of course, have become increasingly sophisticated in their ability to collect, integrate and act upon consumer data. And, for the most part, Americans continue to be “privacy-sensitive.”
Which brings me back to a basic question I explored years ago: What, exactly, is meant by privacy?
There’s a notion that privacy requires a place where peering eyes are kept at bay by protective measures, if not by a sense of propriety. So when we imagine our privacy being violated, we usually think of someone breaking behavioral conventions to infiltrate our presumably secure places.
We even have a name for such a person: Peeping Tom. But alas, the original Peeping Tom could hardly be blamed for his voyeurism; and privacy expectations are often in the eye of the beholder. According to legend, Tom was a tailor in the town of Coventry who refused to avert his eyes on that fateful day when Lady Godiva wore a smile and nothing else on her gallop through town. After catching a glimpse of the lady in all her glory, Tom was struck blind by a reproachful god. And so today “Peeping Tom” is used as a pejorative term, shorthand for those perceived to invade the privacy of others. That a naked woman was riding a horse through the center of town seems not to matter. Tom peeped, and so Tom paid.
This same sense of scorn applies broadly to marketers who acquire and wield consumers’ personally identifiable information, whether their Social Security numbers, their purchase histories or simply their first names. A number of articles have recently put a spotlight on the issue, including one in the New York Times (“You for Sale: Mapping, and Sharing, the Consumer Genome“) that took Acxiom to task for amassing the world’s largest consumer database. The company’s 23,000 servers reportedly process more than 50 trillion transactions a year and contain an average of 1,500 data points on 500 million consumers worldwide. It’s easy to understand why some people might find these numbers to be both incredibly impressive and somewhat disturbing.
That consumers routinely behave like exhibitionist equestrians—telling the world practically everything there is to know about themselves on Facebook, Twitter and Google+, opting in to mobile programs that use geo-fencing and other technologies to track their whereabouts, and clicking on all manner of reckless overtures from major companies and less-than-reputable firms alike—seems to many of these same people to be beside the point. Marketers engaged in the collection of consumer data have all been painted with the same Peeping Tom brush, no matter how complicit many consumers are in their own exploitation.
Through the consumer caterwaul over privacy a simple fact remains: Marketers who don’t grasp the sensitive nature of consumer privacy are actually working against their stated objectives of retention and growth. Yet the pursuit of a coherent privacy philosophy is often one of quiet desperation. What’s needed is a simple operating idea that at best allows marketers to fly above the fray of existing and pending legislation, and at worst keeps them from sinking into the morass of consumer distrust and paralysis.
In reality, there’s a deceptively simple roadmap for marketers to follow. The endpoint is the consensual customer. It’s a scenario in which marketers focus on securing customers who willingly engage in a first-person, ongoing exchange of data for value. For companies committed to this path, here are some guidelines:
Communicate the benefits of information liquidity. In thinking about the benefits of consumer data, marketers need to remember the profound ripple effect across the organization in terms of being able to anticipate demand, improve customer service, etc. Customers must hear about these benefits to relate value and data. It’s all about creating a reciprocal value exchange—a quid pro quo, if you will.
Grant data autonomy to your customers. Simply stated, customers must be able to access, alter, and suppress their customer data. Consider how you might reinforce a sense of privacy for your customers when asking for personal data, perhaps by creating a section of your website where they can access and modify their data. Many companies, including Amazon.com, which even allows you to edit your browsing history, have made good progress in this direction.
Only ask for what you need. Early Internet marketing efforts were largely land grab exercises. The metric for success was quantity not quality, new customers not profitable customers. That same gluttony continues to characterize many marketers’ approach to data collection. But why pursue and store your customer’s hair color if you’re in the oil change business?
Consider and explain context. Imagine you’re walking down the street and a stranger calls you by name. It’s the stuff of government conspiracies. It’s also a primary tactic of aggressive marketers. Yes, consumers desire personalization. But even more important to them is freedom from surprises.
History reminds us that privacy is a hot button that never entirely cools off. Legislation, litigation and technology will forever remain locked in a tug-of-war between privacy zealots and marketing terrorists. Somewhere in the middle are companies that espouse a privacy philosophy that emphasizes consensual relationships.