Consumer Privacy Versus Big Data

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Michael Peterman, VeraData
Michael Peterman, VeraData

As a country, as a world, as legislators and consumers, how do we balance Big Data and consumer privacy? How do we protect individual privacy, while taking advantage of the economic benefits of micro-targeting? Considering the raging debates in Washington, it is prudent that we, as an industry, make clear to the world how and what data is being used by commercial entities. It is critical that we, as a society, understand how our information is being used so that we can make informed decisions, have intelligent debates, and ultimately vote in such a way that maintains and enhances our economic strength.

As a country, we tend to over-legislate nearly everything to the point of the lowest common denominator. As an example, our national parks apparently need signs to tell visitors not to jump off 120ft waterfalls and not to pet the bears…really? Is our population really so remedial as to require these types of warnings? In Africa, do they bother with signs that say “Don't ride the water buffalo” or in China, do they post warnings “Don't pet the tigers”? No. But in the U.S. there comes a point at which someone finds it necessary to protect everyone from everything, and it very much impedes on natural freedom of choice.

As you can probably tell, I'm not a fan of such over-legislation. I believe that it's detrimental to our society and is preventing innovation and invention. Where does this insane over-protection end? Hopefully, with Big Data.

As a marketer and data strategist by trade, the past decade has been like our vertical's version of the industrial revolution. The amount of information we know as a species doubles every year. Computing speed and technical bandwidth is accelerating at an even faster pace. We can “look at” data in millions of dimensions within minutes, using machine learning to build infinitely complex algorithms solely designed to make sure we deliver the right offer to the right person at the right time through the right channel (or combination of channels). The purpose of which is to make our marketing more efficient.

As consumers, the immediate fear is obvious: thinking that companies know too much about us and our identities could be stolen. The reality is, no company I know wants to steal identities; they want to save money on marketing and only spend money delivering their message to the consumers who are most likely to buy their product or service. Privacy fears are exponentially exacerbated with every instance of criminals stealing money or a hacker somehow breaking into a company's database.

Should privacy legislation eliminate (or significantly reduce) the global competitive advantage big data provides to American corporations? Should we prevent organizations from becoming more efficient—all because a couple of bad guys do stupid things?  

What about the environmental impact? If a major national corporation can reduce its direct mail volume by 20%, that could mean 20 million fewer paper packages sent – and that's just for one mailer. Imagine if all companies could use Big Data to eliminate 20% of their advertising mail? How many trees would be saved? How much fuel would be saved from harvesting to manufacturing to transporting?

What about all that “junk” mail in your mailbox? If a company could figure out which of us don't ever respond to direct mail, wouldn't it be nice to only get the mail that we want? No more unsolicited and unwanted offers and coupons. How nice will that be?

That's what Big Data is doing. No company wants to invade our privacy. Companies (all of them) seek operational efficiency. They want to spend less and earn more. They want to eliminate the waste and make their companies more profitable and their brands more respected. They are just beginning to figure out what data can really do when used in a high-tech, contemporary environment. Cognitive scientists are at the cusp of understanding what makes people want things and when. Data strategists are working with marketers to fine tune their communication efforts to optimize how, when, and how frequently to send offers to customers.

Big Data has the potential to materially enhance corporate profitability, which means more jobs, more tax revenue for our government, more competitive advantage for American companies, less intrusive, unwanted advertising, the list goes on.

In the end, do we prevent the sustainability of American business just to thwart the plans of a few bad seeds? Or do we make the penalties for identity theft so egregious that it becomes a self fulfilling safeguard? Tell us what you think.

Michael Peterman is CEO and founder of VeraData.

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