Privacy is dead. It died a long time ago.
If you have ever used a credit card, ordered from a catalog, subscribed to a magazine, answered a survey, or supported your favorite charity, you have provided marketers with information they consider extremely valuable. Long before the Web was invented, you were counted, cataloged, sorted, indexed, cross-referenced, sold, and redistributed countless times.
In the late 80’s, I had a part-time job as a telemarketer for a major public television station. I was given a stack of printed leads and told to call them all to ask for money. I called. I brought in hundreds of dollars an hour. Was it my charming personality and silky smooth voice that convinced total strangers to hand over their credit card numbers to me? I’d like to think so.
More likely, it was that stack of leads, which told me not only names and phone numbers, but what these people did for a living. What kind of cars they drove, the names and ages of their children, how often they went to the theater, recent major purchases, and so on. This public television station had purchased their personal information.
It’s very easy to get a sponsorship from a parent when you deliver a line like “Can your preschooler count on you to help keep Sesame Street on the air?” If you really want to see someone run and grab their checkbook, tell an opera fan that by joining at the President’s level, she will get to meet Placido Domingo the next time he’s in town. Any die-hard anglophile will gladly hand over their credit card number when they are told that it will pay for a 24-hour Benny Hill marathon.
Recently, companies have been exploring the idea of using personal information to derive and provide value. A new type of website has started to emerge on the Internet: the aggregator. They are also known as infomediaries, metamediaries, metamarkets, and disintermediaries. The players in this space combine a large database of user information with a large collection of goods and services in order to play matchmaker.
These aggregators can collect large amounts of user preferences and then shop for special deals. For example, knowing that I am looking for an Executive Barbie is of little value to a vendor. However, knowing that 10,000 people are shopping for and are willing to pay no more than $20 is invaluable to a vendor. The vendor can decide to lower the price in order to make 10,000 new customers.
In the age where getting and retaining customers is everyone’s number one priority, vendors are happily trading margin for volume. In addition to volume sales, the seller can also benefit from relevant up sells. For example, a new Executive Barbie customer might eventually be convinced to purchase other related products, like a new Barbie Browser.
Aggregators are able to provide consumers something even more valuable than great deals on products and services. They help consumers regain some of their privacy. By divulging personal information to trusted aggregators, consumers can derive the benefits of sharing their interests and preferences without fearing that their personal information is spreading across the Internet.
Aggregation may be a situation where everyone wins. Consumers and vendors can each deal with a single point of contact. Consumers are ensured that their information remains private while using that data to secure good deals from vendors. Vendors are happy to have access to a new set of consumers who want their products and services. Aggregators can profit from commissions.
There are some areas that are prime territory for aggregators to step into. Products which require extensive pre-sale research. Big-ticket items whose prices can fluctuate. Complimentary products and services which can be combined into packages. Services which require the collection of large amounts of customer information. Products and services where the purchase process is either inefficient or unpleasant
As consumers realize the value that aggregators provide they will slowly begin to part with some of their personal information in order to enjoy the benefits and security aggregation can deliver.
The Internet has succeeded in increasing awareness about privacy concerns, both on-line and off. Unfortunately, the popular press has tended to focus exclusively on the negative issues around Internet privacy. As a result, consumers have developed a certain degree of paranoia regarding their personal information. Though protecting one’s personal data is very important, it is also important for consumers to know how to effectively use personal information for their benefit.
The Internet is not uniquely responsible for invading your privacy; it is simply the newest place businesses can track your personal information. Instead of harboring the illusion that you can live and buy in this society in utter privacy, consider the power you hold and use it to your advantage.
Iliya Rybchin is a strategist in Viant’s Boston office. He likes to convince himself and others that he is also a technologist by claiming that in a previous life he wrote C++ and Java code that compiled and didn’t cause crashes. But we know better.
Things We Think is a forum for Vianteers to express their passions and preoccupations about the digital economy. We push ourselves to push our own ideas, to strike a chord or even touch a nerve. We feel it’s more important to provoke your reactions and response than always stay safe and comfortable. We hope you’ll tell us what you
