Nuts & Bolts - Eye on Privacy : Is the Privacy War Over?

I've worked on privacy issues for 20 years, but I never imagined the phenomenon or the privacy implications of social networking. Twenty years ago, businesses, which were driven by consumer information and consumer advocates alike, characterized consumers as fiercely protective of their privacy. Consumers were distrustful of businesses that gathered information on them and were willing to let the government put tight controls with severe penalties on those businesses so that they could sleep better at night. Could it be that we had it wrong?

Facebook, a leader in social networking, has rolled out new, broader connection capabilities and new privacy controls for sharing information through those connections. There will be controversy over whether the privacy disclosures are easy to find, simple to understand and effective enough to appease privacy watchdogs. But Facebook users will decide for themselves how much of their privacy they're willing to give up. Is this how the Privacy War will end? If so, was there a winner or a loser?

I always suspected that acceptable information use was a value proposition. If consumers felt there was a fair trade of convenience, service or savings for the information shared, then the use of their information was positive. If consumers felt their information was misused, shared with third parties without their knowledge or unnecessary for the transaction, then the use of their personal data was viewed as negative.

Consumers began to develop trust and loyalty as more positive information trades occurred. They might walk away, never to return, after just one negative trade. These trade-offs become mini-negotiations in the marketer's relationship with a consumer. There are no strict rules that can be applied; each consumer and each trade-off is different.

This has not been an easy lesson for traditional marketers. We were taught that there is value in data—all data, more data, even data that we didn't need. The truth is that data, or information, is valuable only if it leads to a positive customer experience. Data that we didn't need, sold or traded under the radar, or lost has only gotten us into trouble.

So, how do marketers know valuable data when they see it? A credit card number, for instance, is valuable if it helps a consumer make the next purchase without having to find his card (and only if he agreed to let us store that card number for him). It is not valuable to the consumer if we hand the credit card number off to a third party for a product or service that the consumer has not yet agreed to purchase.

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