Each year, most of us receive annual privacy notices from firms we do business with -- whether they pertain to travel, hospitality, healthcare, entertainment, or financial services.
Companies are required to disclose how they will share the personal information they collect on customers, although unfortunately, not all consumers read this paperwork.
The Fine Print
Even though they may be user-unfriendly in appearance and tone, companies must pay close heed to their own privacy notices -- or else.
In many cases, the data collecting is far more comprehensive than people imagine it to be, thanks to new ways to plumb the data, such as reality mining, which gathers and analyzes information from machine-generated data that is capable of predicting individuals' social behavior.
On a website, this is done by tracking customer buying patterns. It's the reason why you see a recommended "buy" list of books or DVDs in the same general category as the last purchases you made on Amazon. Smartphones further extend this intelligence because they log calls, messages, and record where you are and even who you are proximate to via GPS. The final layer to this intelligence gathering is social media, where third-party services actually track your activities and who you affiliate with.
How does this help business?
If you're an online retailer, you've got a matter of seconds (while the customer is on your website) to consummate a sale. The better you are at predictive selling, the better your sales numbers will be.
If you're a healthcare services provider monitoring Alzheimer's patients in their homes, the more real-time data you can collect based on their whereabouts, activity sensors placed in their homes, and on their cellphones, the easier it will be to intervene if patients need help and are unable to request it.
If you're a metropolitan area monitoring city traffic flows, the more up-to-the-minute data you can collect about developing traffic jams, the better you can preempt complications by sending out messages to roadside e-billboards that inform motorists of upcoming congestion and advise them on alternate routes. You may be able to control traffic lights more effectively to control the flow of vehicles in the congested area.
If you're a financial institution, the more you know about a person's buying patterns (and potentially, even the people they associate with in social media channels) the likelier you will be able to reach out to more customers with the right products.
The balance enterprises need to strike in using this data is how far they should go to exploit this vast morass of data. This is the balance organizations must strike between helping the customer (and improving profits) and maintaining trust (which also builds profits).
Financial services is a good example, because major banks reserve billions of dollars for loans they anticipate will "go bad." Some of these institutions have begun using social media affiliations (or who their customers "hang around" with) as a new dimension of data intelligence that they apply to customers. Some consumers worry that lending institutions will start leveraging personal affiliations as one of the determinants of whether -- or not -- to make a loan to a particular individual. Banks and credit card services companies insist they only use only such information for marketing purposes, not for making any loan decisions.
Social media is an attractive route to increased information about prospective clients. It could help them capitalize on new sources of customer information that are good for business, while maintaining the trust of their customers. Enterprises should place the same emphasis on this as they presently do for regulatory compliance and internal policies.
Enterprises can proactively do this by:
Including the information that demonstrates how they balance their decision with due diligence whenever they roll a new source of intelligence into their operations.
Finding an automated way to integrate this new intelligence-gathering into their daily operations, so that line employees are not deciding how and where to use it.
Telling customers in their annual privacy statements not only about who they will share customer information with, but also how the information will be used.
The data is out there and tools are available to pull it all together, but organizations must walk a fine line so they don't frighten prospects or existing customers away. It is a balancing act, and corporate reputations depend on getting it right.
But I've got to think that some sort of "correction" is coming along--with more people beginning to feel that these predictive intrusions are well--intrusive!
In the Target/teen pregnancy case, Target sent coupons to the girl to help her save money on baby items. If the teen was, say, older and in an established relationship, had proactively wanted to become pregnant, and had the support of her partner and family, the coupons would have been helpful. Reading between the stories' lines, the coupons forced the girl to fess up about the pregnancy before she was ready to do so. Now, people can argue the pros and cons of that and push their own morals on this girl but I don't choose to go there! There was nothing "evil" in Target's intent and, even if a human was involved in this process, I don't know that any red flags would have come off -- even if her age appeared (which it may well have done so).
That there was more concern for an individual's privacy that what you suggest:
"[B]ut organizations must walk a fine line so they don't frighten prospects or existing customers away. It is a balancing act, and corporate reputations depend on getting it right."
That may not be the intention of the collectors but i doesnt stop people from snooping around that data. Problem is that many of those collecting the data don't do much to keep it safe.
but it's complicated. Yes, people can use the personal data for bad purposes, but generally that isn't the intention, and the information can be really useful. Let's not throw the baby out with the bathwater.
There needs to be some kind of filtering system i guess. One that uses an algorithm based on real life differentiation between what is appropriate and what is creepy. things relating to teenage pregnancy, death, and such touchy subjects cannot be left to an automated system to generate and push ads. It could easily spoil the company's reputation.
The teen pregnancy is an extreme example, but enterprises shouldn't underestimate how offensive it can be to find out that they know personal details from your life you didn't share with them, no matter how mundane.
The first example that came to mind for me was the Target/pregnant teen tale from 2012, which clearly emphasized just how much the retail chain knows about its shoppers -- and how targeted marketing campaigns can go astray. Seriously doubt Target wanted to out the teen's pregnancy when it sent her coupons for baby items, but knowledge can be a dangerous thing.
The ThinkerNet does not reflect the views of TechWeb. The ThinkerNet is an informal means of communication to members and visitors of the Internet Evolution site. Individual authors are chosen by Internet Evolution to blog. Neither Internet Evolution nor TechWeb assume responsibility for comments, claims, or opinions made by authors and ThinkerNet bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
The average yearly tuition cost for brick-and-mortar colleges and universities in the US today is more than $20,000, an expense that has increased 1,120 percent since 1978. By comparison, students of all ages can often earn an online education for one fourth of this annual cost -- and more businesses are starting to acknowledge online degrees.
Facebook's Graph Search may face some profound challenges and risks, first, because Facebook users haven't been thinking of their posts as product reviews; and second, because Facebook will now have to contend with the social-network equivalent of SEO "gaming" of results.
What can users today do to protect their online privacy? The simplest and most obvious option is to not use the Internet – at all. However, once all digital information is consolidated over the Internet, trying to protect digital identity by simply unplugging from the Internet becomes impossible – a fact that has manifest implications for civil liberties, Saunders says.
By 2011 the number of Internet-connected sensors will exceed 1 trillion, making your chances of doing anything or going anywhere unnoticed pretty much zero. Saunders talks about how the 'sensortization' of the Internet is eliminating the traditional divide between online and offline populations.
The 20th Century Internet was characterized by the ability to interact with other people and information on the Internet largely without anyone knowing who you were. The Internet of this century, conversely, will be defined by identity. Saunders explains how Internet users are unwittingly contributing to the demise of the anonymous Internet.
A recent release of the popular TweetDeck app for Twitter power-users gives new life to software that had previously taken a wrong turn. Here's a quick walk-through of the new TweetDeck, to show you why it should be at the top of your Twitter toolkit.
The quest for Webpage clicks and ad impressions is creating a market for sensational truths and lies in equal measure. How are we going to get to the bottom of any real issue online – like what's really going on with Carrier IQ, for example – if we can't separate hype from reality?
New York's Metropolitan Transit Authority is conducting a pilot test of digital kiosks to guide subway users to where they want to go more efficiently and at lower cost.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
While NFC's original goal was to enhance mobile commerce applications, it is finding its way into a number of other uses, which is creating both opportunity as well as challenges for IT departments.
Enterprises would like to move to cloud computing but are hesitant because they are concerned about providers’ ability to secure company data. Here are some tips that help to ensure that if breaches occur, the business is not left holding the bag.
Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
The automotive website uses propensity modeling to target ads and customer registration forms, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
Subsidized handsets, rather than locked handsets, should be the focus of regulators. We're not getting good deals, not fostering innovation, and weakening our power as buyers.
Expert Integrated Systems: Changing the Experience & Economics of IT In this e-book, we take an in-depth look at these expert integrated systems -- what they are, how they work, and how they have the potential to help CIOs achieve dramatic savings while restoring IT's role as business innovator. READ THIS eBOOK
your weekly update of news, analysis, and
opinion from Internet Evolution - FREE! REGISTER HERE
Wanted! Site Moderators Internet Evolution is looking for a handful of readers to help moderate the message boards on our site – as well as engaging in high-IQ conversation with the industry mavens on our thinkerNet blogosphere. The job comes with various perks, bags of kudos, and GIANT bragging rights. Interested?
To save this item to your list of favorite Internet Evolution content so you can find it later in your Profile page, click the "Save It" button next to the item.
Email This
