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The Data Implications of Do Not Track

by Elizabeth Glagowski
Published by 1to1 Magazine

March 2011

Marketers, privacy experts, technologists, and trade groups discuss how Do Not Track initiatives may affect corporate data strategies and tactics.

The online data world is at a crossroads. Companies have more data than ever before to enable them to deliver on the promise of relevant, targeted, valuable customer interactions. Yet data capture and use is also seen as nefarious, where companies will exploit customers' personal details for their own short-term gain.

This has become such a hot topic that last week Time Magazine's cover article was a story called "Data Mining: How Companies Now Know Everything About You." It details what sort of personal information is accessible online, and how companies use (or manipulate) it. The article comes on the heels of legislation proposed in Congress last month to mandate behavioral tracking tools and policies among online marketers. In addition, Firefox, Google, and Internet Explorer browsers have recently added options to block companies from tracking usage. And these efforts run parallel to those by the Direct Marketing Association, the Interactive Advertising Bureau, and others to self-regulate.

Regardless of the many proposed solutions to the issue—legislation, self-regulation, or technology—the reality is that companies need to step back take a strategic look at their online data use in the new, Do Not Track–sensitive environment.

Most of these new tools and proposals involve giving individuals the option to opt-out of being tracked as they surf the Web. Items to opt out from tracking include everything from IP address to website visits to, in rare cases, personally identifiable information. But marketers know that understanding customer needs and collecting data is important, especially to deliver a relevant experience online. So what is a company to do? We've gathered a number of players involved in the issue to share their thoughts on the data implications of Do Not Track.

The privacy professional
"Use more data, not less." This isn't the typical response of a privacy professional, but it's what Jules Polonetsky, former AOL chief privacy officer and current director of the Future of Privacy Forum, recommends for companies.

"Get out of the adversarial situation with consumers," he says. The reason the industry got to this point was because data issues have been kept hidden from consumers, leading to misinformation and distrust. "Companies should lean in a progressive direction to use more data to have better engagement with users and [give them] more control instead of providing something that people will immediately opt out of if given the choice."

Regardless of what happens with Do Not Track initiatives, companies should "featurize their data use." In other words, drive data use into user experience design and feature design. Use icons and other design elements to show users what's happening. "As data becomes central [to relationship building], it's got to stop being a disclosure," Polonetsky says. "It's got to be a feature. Turn the conversation into 'how I can do things better for you.'"

The direct marketer
"This is the perfect time in the maturity of the [Do Not Track] discussion to frame it so that the customer is in control," says Ernan Ronan, direct marketer and author of Voice of the Customer Marketing.

Instead of an opt-out model, Ronan advocates an opt-in one that's built from a trust-based relationship. "Customer centricity doesn't mean telling people to leave [by opting out]," he says. "We as marketers have the burden to show the value proposition of behavioral tracking to encourage consumers to opt in."

If people choose to opt in, the amount of data they're willing to share is exponentially greater than if they opt out, Ronan adds. Companies need to create a compelling value proposition so it's in the consumer's best interests to opt in. "Opt-in databases are more accurate, more detailed, and we find double-digit response rates compared to about 2 percent from traditional databases," he says.

In addition, companies should make better use of the data they do track, Ronan says. Instead of fighting Do Not Track efforts, which focus on aggregate usage and transactional data, companies should base more decisions on frequency of contact, contact preferences, and what content is being viewed. "This goes into fine-tuning data that most marketers aren't looking at," he says.

The industry trade group
The Internet Advertising Bureau is on the forefront of the self-regulation effort, working with other industry groups to develop usage standards, as well as a dedicated website (http://www.aboutads.info/) to inform the public about behavioral tracking. The trend in the past few years has been to do more targeted advertising, because it's so much more effective, says Mike Zaneis, head of public policy. And data is needed to do that. "Do Not Track discussions will allow marketers to embrace privacy and transparency instead of running away from behavioral targeting. It's important to do it responsibly, not shy away from it."

The data isn't the issue, Zaneis says. Fear is. "As long as the advertising industry is transparent with the data they collect, it won't harm the marketplace. Fear-mongering and theoreticals will drive people to opt out, because they're scared of something that's not happening." He predicts that the Do Not Track options most likely won't result in many opt-outs, because most companies are using customer data correctly.

The technology company
Sean Jackson, vice president of marketing at Kognitio, says that in general he doesn't see companies tracking individual-level data. Most companies are interested in trend analysis and grouping. But even with aggregate-level data, he says, companies need to be smarter about telling customers what's being tracked. "You need to get customer buy-in to the fact that they will be tracked," Jackson says.

He says the amount of data available can be overwhelming, which is why intelligent segmenting is a growing strategy based from online behavioral tracking. "It's a lot of work to track one person," he says. "Groups are better. Otherwise you can suffer from too much analysis. Just because you can do it doesn't mean there's value in doing it."

Rick Buck, vice president of privacy and ISP relations at E-Dialog, agrees with Jackson. "This boils down to a 'good segmentation' issue, not a privacy issue," he says. "It's not the do-not-call concept. He predicts that self-regulation among marketing groups will gain momentum and ubiquity, allowing users to opt-out of sharing information like their IP address, clicks, time on site, sites visited, etc. Also, adding more fields to give the consumer more control, such as opting out of third-party tracking or opting in with preference data, gives companies more information to do better segmentation.

Current Do Not Track efforts in the works will reduce the ability to serve targeted ads and the ability to measure effectiveness of campaigns, Buck says. But consumers want relevance and customization. So the conversation needs to shift, he says. "People are less concerned that you're collecting information than they are about the protection of that information."

He agrees that a good data strategy is really a good relationship strategy. In the registration process, for instance, he recommends that companies point consumers to a preference center, where they can choose how often they want to be contacted, what channel they want to be contacted in, what behavior they choose to be tracked, and other preference data. "Let the consumer micromanage the relationship."

New Book Release: Voice Of The Customer Marketing
"This is the definitive playbook for this new customer-driven era."
—Frank Eliason
Senior Director, National Customer Operations, Comcast
"Thank you, Ernan, for tuning us in to the inner voice of our customers! A deep understanding of our customers' needs and preferences is essential for our future growth."
—Karen Galley
President, Patient News Publishing