Monday, September 03, 2007

Data: It’s all about responsible use

Mainstream Article, Privacy and Data Use

I have been involved in web monitoring practically since there has been a web to monitor. Over the years I have often heard accusations about invasion of privacy and have done my best to make sure that they are not true. While I was at Clickstream this was fairly easy as we were the leaders in privacy friendly monitoring. Really we had to be; we could gather so much data so accurately and completely that, had we not been campaigning for more stringent privacy regulations, we would have been big brother. The online world promised so much in the way of “perfect information” and despite some disappointments it was actually able to deliver if you did things right.

What is now becoming ‘the next big scare’ is that it is not just online data that can be invasive. Articles are appearing in the press about abuses of data from all directions. I hear about the big brother aspects of the supermarket giants, and I cannot help but smile. It is all so familiar. I smile for two reasons:

Data is not inherently evil. Doing bad things with data is the potential problem, and at the moment I am not seeing signs that it would be profitable for the supermarkets to turn bad.

The supermarkets are just the tip of the iceberg and the bits that are underwater are much larger.

As number two points out, it is not just the supermarkets that have masses of data, they just happen to be the most currently visible aspect. Other areas that potentially frightening amounts of data are accumulating include, but are not limited to, Banking, Telecoms, Government, Media (Broadband providers, IPTV, etc), even manufacturing gets a look-in. At this point I should emphasise that they are only *potentially* frightening. If there is sufficient interest in this topic I shall write about what the different areas are gathering and some of the implications of this in another article. For the moment it is just worth bearing in mind that all of these sectors are gathering huge amounts of data; more than that, they are turning that data into huge amounts of information.

Information is power and with great power comes great responsibility. This sounds trite and clichéd because it is, but it is also true. The power of data has been loosed upon the world and we are not going to change that without driving ourselves back into the dark ages. Think of it as a bright light shining down upon us, and work out how much shade we need and where we should be shining our torches.

One way of looking at this, which seems to make sense, is by examining explicit consent. If you are burgled you feel violated and invaded because someone has been rummaging through your private things and walking in your home without your permission. If you invite someone in to do a job for you then you feel grateful to them for taking the time and trouble. You may even pay them for the services provided. The loyalty card is the difference between an invasion and an invitation. A loyalty card is saying “here is what I want, watch what I am doing and work out how you can help me”. The same data can be gained from credit card transactions but the user does not use their card specifically so that upermarket can make them offers and improve their shopping experience. One is invitation the other is nosiness at best and at worst full blown invasion (*) The law acknowledges this and protects the consumer from this kind of direct snooping. It does allow aggregate data gathering, saying this many people do this kind of thing, but not specific snooping (on this date you were in this store doing this).

The worst argument against the way that supermarkets use the data is that they use it to sell you more things that you do not need. The best argument in favour of them is that they change their offerings, ranges and way of working to fit the customer’s needs. If a loyalty card is inviting someone in, then the store deciding to change to match it’s customers is the workman doing his job. As long as the vendors are incentivised to fulfil our best expectations then the problem of big brother is not a real and present danger.

So the next question is whether the incentives are sufficient to make it in the data holder’s interest to play nicely. I do not have a definitive answer to that. I do have some evidence, but it is not sufficient to be certain, so I can only offer advice and suggestions, not answers. It is my guesstimate that the lifetime value of a happy customer is a greater incentive than the quick profit of an over-sold customer, but I do noy yet have the figures to back this up. I am however certain that the company I am working for believes this lifetime value argument and that this is what they are providing to their customers. Looking at the retail market it is also what a lot of the experts are saying. Whether they are doing it or not retailers are at least paying lip service to the idea that customers have the power to walk away and so you need to treat them as well as you can,

An encouraging comment I came across in the retail bulletin seems to support this responsible view:

“Effective retail media solutions in the modern world are all about adding value for consumers and ensuring they receive something personally worthwhile as a trade-off for their time and attention”

The quotation is from Martin Hayward Director of Consumer Strategy and Futures at Dunnhumby where I am now working; it is this attitude that lets me feel comfortable working here. As an added benefit, working here will supply me, over time, with the hard evidence to back up this view. Certainly Dunnhumby make their money out of learning how to do the right thing for consumers, so they (we) have a real incentive to show that this is worthwhile.

Rufus Evison,

(*) this is misleading because it is only true in context, so I will delve deeper into what can/should be done with credit card data in a later entry.

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