Sacramento Bee - Leading The Way in Online Consumer Privacy Abuse? (Or Just Ahead of The Pack?;-)
On May 15, 2007, The Sacramento Bee wrote the piece shown below...On that same day I contacted David Holwerk, Editorial Page editor and Maria Henson, Deputy Editorial Page Editor with the email copied below - I have received no response as of May 25th.
Summary - The editorial piece written by The Bee beats the consumer privacy drum warning of almost certain privacy abuse should the "mega-merger" of Google and DoubleClick be allowed to happen. The alarm is sounded based on their collective ability to build "A remarkably intimate profile of the Internet surfer... without that user realizing what is happening".
Big Problem - The Sacramento Bee (and presumably other McClatchy web sites) have been doing this exact thing for years and apparently without the knowledge of the higher-minded editorial brethren.
Read on...
Editorial: Rights on the Internet?
Google merger raises privacy concerns
Published 12:00 am PDT Tuesday, May 15, 2007
Story appeared in EDITORIALS section, Page B6
http://www.sacbee.com/editorials/story/179684.html
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New York, not California, is taking the lead when it comes to suggesting that users
of the Internet don't give up rights to privacy as they surf about, searching for information or bargains.
A mega-merger of the Internet's most popular search engine (Google) and the largest Internet
advertising company (DoubleClick) is prompting the debate.
The New York State Consumer Protection Board is urging a delay in the merger until consumer privacy issues are sorted out.
Google and DoubleClick are trying to dodge the issue by voluntarily taking some measures to prevent the sharing of information.
The real question shouldn't be whether the Internet has some ground rules, but what those rules should be.
Firms like DoubleClick like to keep track of what computer users like to buy.
A remarkably intimate profile of the Internet surfer can be assembled without that user realizing what is happening.
In one respect, this can be a convenience because those advertisements on the computer
screen may be uniquely designed to cater to the consumers' preferences. But for now, using the
Internet is akin to giving tacit approval for search engines and advertising companies to assemble
sophisticated, individual consumer profiles. Should the companies themselves hold all the power
in this relationship? No.
The Google-DoubleClick deal raises a number of issues:
• Disclosure: The New York Consumer Protection Board wants Google to disclose its precise
data collection methods and to release to a computer user what information Google and DoubleClick have collected.
• Information sharing: DoubleClick and Google are voluntarily pledging not to exchange information
about what a computer user is looking for on Google and how they like to shop via DoubleClick.
Shouldn't there be clearer rules on what any Internet company can do with consumer information?
• Opting out: A telephone user can choose to avoid marketing pitches by joining a do-not-call list.
Should Internet users have a similar right to ask Google to quit tracking them?
Workable ground rules that clarify the rights of consumers and those of Internet companies are in everyone's interest.
Email sent in response to the Editorial:
"Hello David, Maria,
I would not expect you to remember me, but I served as The Bee's New Media Business Dev. Manager for about 6 years ('99-2005 - back when there still was a new media department...).
I was interested to read on B6 today your comments about privacy concerns with the pending Google/DoubleClick merge.
The concerns discussed were all about what MIGHT these two companies be able to do should the merge happen and how this could impact consumer privacy.
I am sure you will be shocked to learn that EVERYTHING you wrote about as a possible, future scenario for Google has been happening, everyday at Sacbee.com, Sacticket.com for nearly three years. I know - I lead the team there that built the system.
Registered users are served different Ads based on their home address, income, and other valuable demographic data - all gathered offline and without permission or user knowledge in the same way The Bee's direct mail department does - list creation and credit bureau profiles.
You see, if I know your name and home address, I can buy information on you, use that information to create a "user profile" and then append that data to your online account. When a user from a more affluent group visits sacbee.com, I can serve an Ad unit to him/her based on his demographic information, assembled through offline sources like Experian, Dataquick, and others. The primary resource for these profiles used by The Bee is Claritas (I believe).
It goes deeper.
Say a user does not want to register or The Bee wants to add to a registered user profile by tracking what stories and sections a user views online and how often. This is done with a system in place now, pioneered by a smart little company called Tacoda. Tacoda works in tandem with the Nando developed registration system called Insite (sp?).
Although Tacoda has since changed their business model, Tacoda allows The Bee to build a user profile based on recent and aggregated online habits. Regardless of registration status - known or anonymous a user can be targeted by email, banner Ads or pop-ups based on behavior analysis - without his knowing or being asked permission.
This is not just an "Internet thing"
These same profiling processes happen in your circulation, marketing and direct mail departments as well.
Darrell Kunken, Sacramento Bee Market Analysis Manager (reports to Ed Canale) is a genius at this.
Your subscriber database has been an un-worked goldmine for years. For almost all of The Bee's history you knew little more than subscriber name and delivery address. Not any more. Using the above cited database companies, and I am sure, many others, detailed customer profiles have been and continue to be assembled on your current and past (lapsed) subscribers. In large part the goal is to identify life-cycle attributes of subscribers and then to seek similar or "look alike" consumers in the market who are not subscribing. This list then becomes your marketing department targets. They buy radio and TV ads based on the consumer profiles assembled. Telemarketers are unleashed for the same purpose with the same lists. You use direct mail to target specific households that data access tells us have occupants that exactly or very closely match those demographics shown to be primary newspaper consumers. Your Direct mail people also sell access to these same households to advertisers wanting to target by income, age, car ownership, address, ages of kids in the home, you name it.
The risk from your perspective
Here is the dark scenario most consumer watchdogs bark at... The rich get better incentives. The poor get nothing. When database profiling is done well the end result can be custom coupons and discount offers that are never even seen by "lesser" demographic groups.
When one of the big car dealers wants to make a really deep discount offer and they are presented with a choice of who to make it to, do you think El Dorado Hills or South Sacramento residents will get the offer? What about restaurant ads and coupons? Do these small business owners want to give a free meal away to someone who normally could not afford to eat at their restaurant or someone who may eat out frequently because they have a household profile that shows a lot of disposable income? You don't need a crystal ball to guess how a marketer will prioritize his offers leaving the end result that doesn't look great for profiles created for lower income families.
But is this wrong?
I don't know. In business, we have protected the "right to refuse service to anyone" for many years. Online and in other marketing is that right protected based on profiling and demographic indicators?
As a consumer the idea that "generic" ads will become tailored offers that I will likely be actually interested in is appealing. This is why search engine marketing works so well - you don't get and Ad until you ask for information you actually wanted - allowing the Ad you do get to be better targeted and possibly of interest.
Let me know what you think about all of this. Happy to fill in the blanks."
Conclusion –
The main point here is that none of this is really new. None of this is particular to the Internet or online advertising and it is not wise to allow the ignorance of old-guard media to throw hypocritical stones at new media business models that might actually have a chance of making advertising more beneficial for all concerned, especially the consumer.
Its time that we reexamine old wife's tales about what is ok and what is not when publisher-advertiser-reader communications are examined. Yes, there need to be rules established and yes disclosure should play an important part in those guide lines, but equally important is the opportunity for consumers to receive information and offers that may actually carry some hope of relevancy not simply interruption based on assumption.
Jim Bonfield - Interactive Media Director
posted by Jim Bonfield @ 7:08 AM
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