An inconvenient flip side

There has been a continuous background noise in the media about behavioral targeting and consumer privacy. The pro-privacy groups are relentless in insisting that no vendors have a right to track consumer behavior without explicit consent, and the more accurate the tracking mechanism, the more shrill the privacy advocates become.

Here’s the issue. Why are these companies interested in tracking or profiling consumers? So they can do a better job of serving the consumers need for information, products, or services. Do you hate getting good service? Does it bother you to walk into a retailer, be recognized, and have people falling over themselves to give you what you want? This type of scenario apparently bothers the privacy advocates, and they have decided they know what’s best for you.

The most compelling aspect of being on-line is having access to unlimited information, goods, and services. However, the infrastructure that delivers this unlimited choice needs to be paid for, most often by advertising revenues. The advertisement is only cost-effective if site visitors click on the banner, or link, or whatever has caught the consumer’s attention. Knowing what type of advertisement a consumer is interested in is likely to increase the response to that ad; the consumer gets what they want, the vendor sells more product, the economy grows, and everyone is happy (except the privacy advocates).

So lets’ say the privacy advocates are correct, and the legislature rolls over and give them what they want. What are the likely effects? First off, spam on an unprecedented level. Why? Because vendors will have no way to accurately target consumers, and will be forced to a one size fits all model. There will also be a noticeable decline in the delivery of on-line services, because the model that pays for them will be hamstrung. On-line companies will be forced to cut back, the technology vendors that support them will be forced to cut back as well, and sectors of the economy that are normally on the leading edge of customer service will be hit very hard. You can also kiss personalized service good-bye, vendors will be forced to treat all customers as unidentifiable drones, so again, if you hate getting good service, this is your lucky day.

The behavioral targeting space has done a miserable job of convincing consumers that it is in their interest to be targeted, as a result, the privacy advocates have claimed the moral high ground, and are yelling at the top of their lungs. To makes matters worse, the only ones who are really listening are the legislators (most of whom have a thin grasp of business, and an even thinner grasp of technology). I believe there is an elegant way through this, where nearly everyone comes out ahead, and this is something I will be addressing in upcoming posts.