Discrete Online Marketing: A Privacy Primer

Online privacy has suddenly become a front-burner issue for e-commerce. Once it was a matter of evolving ethics. But now it’s affecting the bottom line – click-through rates for ad banners are dropping, in part, because of concerns that advertisers just might know a little too much about individual Web surfers.

Internet marketers simply cannot ignore the hot-button issues of privacy. As more people use the Internet for purchases and transactions, a consensus is emerging about the level of privacy they should expect.

The quandary is that e-commerce is a personal business. A commercial Web site has to establish a one-to-one relationship with each visitor to be effective, supported by data about personal tastes, preferences and demographics.

Fortunately, there are proven ways to connect with online customers while ensuring their privacy. These solutions combine technological safeguards with practices that foster confidence and trust.

Web surfers are becoming more savvy all the time. Most want to know exactly what information a site is collecting about them and how it will be used. They need that reassurance before they feel truly comfortable.

To provide it, a Web site needs a thorough privacy policy. It then has to highlight and promote that policy prominently.

There is currently no universally accepted framework for an industry-standard privacy policy. But the building blocks are emerging in the Fair Information Practices endorsed by several industry groups.

Promoted by the Online Privacy Alliance (www.privacyalliance.com), these practices are the core tenets of the widely recognized TRUSTe program (www.truste.org). To participate in the program, a Web site must agree to notify users of:

• The information it gathers about individuals.

• What it does with that information.

• Who the site shares data with.

• The site’s opt-out policy.

• Its policy on correcting and updating personally-identifiable information.

• This site’s policy on deleting or deactivating names from its database.

Taking part in the TRUSTe initiative carries a significant benefit: Web sites can prominently display a logo on which visitors can click to verify the site’s compliance.

Compliance with TRUSTe also enables a Web site to take a stand for industry self-regulation, thus helping to keep unwieldy government regulations out of the issue.

Understanding the Data You Keep

To protect privacy, a Web-site sponsor has to understand the data kept on visitors and be clear about its application.

Registration is the traditional approach to personalization based on data derived from online registration forms filled out by visitors. The key distinction here is that individuals have complete control. They volunteer the information in the understanding that Web site sponsors will use it to tailor their online experience and conduct special promotions.

A customer’s history of purchases, response to promotions and inquiries comprise an excellent overall indicator of interests and tastes. However, some consumers may not be aware that a company tracks this type of information. Others may assume it, but might not like it. Virtually every Web visitor now expects a site to let them choose whether or not it may share the information with other companies.

User profiling determines Web visitors’ personal preferences through a range of clickstream data, such as content viewed, time spent viewing each content category, how often the visitor accesses specific types of information or subjects, and date of visits.

It correlates this data with an extensive hierarchy of topics, general geographic location, and other information such as registration data and customer history. The most advanced type of profiling links into a global database that comprises multi-site profiles of a user’s activity across the Web.

By extension, profiling is logically emerging as a focus for online privacy issues.

Profiling technology has a number of variants. It’s no surprise that the approach now working its way into the infrastructure of e-commerce is the one that best protects privacy. It does this by keeping personal information completely anonymous through several safeguards built right into the database architecture.

It assigns a random alphanumeric identifier to each profile. This anonymous ID gives Web sites access to the individual’s profile data but does not include any sort of personal details such as name, e-mail address or date of birth. It does not include host domain names and IP addresses as part of an individual’s profile.

The data structure enforces separation of individual profiles from other information such as registration data and customer history. It cannot track user identities under any circumstance.

Browser software cannot compromise an anonymous profile. Most browsers can provide certain personal information for Web fields that “remember” previous page requests, user names and passwords. However, that information is never logged in an anonymous profiling system.

Provide a Way to Opt Out

Even with the assurance of anonymity, some Web visitors may be uncomfortable with profiling. It’s important to give them a way to opt out of the profiling system if they want to do so.

The best way to accomplish this is by providing a Web link to a special page where they can follow simple steps to leave the system. Typically such an opt-out procedure deactivates the individual’s profile throughout the system and replaces the anonymous identification code in the browser cookie file with a special tag that prevents further profiling.

Experience shows that most users will not opt out of a profiling system if they understand the benefits of personalization. For them, it’s enough know they have the option of doing so at any time.

A good way to assuage privacy concerns is to put visitors at ease with customized content and one-to-one marketing. Experience shows that the following subtle measures can mean a lot:

• Do not personalize content or promotions based on controversial or provocative subject matter.

• Avoid sensitive terminology in customized communications.

• Know the comfort zone. Don’t make things too personal.

• Think globally. Be aware of cultural differences if a site has an international audience.

The burgeoning e-commerce field is a long way from maturity, and the ground-rules are still evolving in parallel with the technology. While the momentum accelerates, commercial Web sites need to get future-viable privacy platforms in place.It’s clearly more than a matter of doing the right thing. It’s good business.

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