Privacy: The Next Big Opportunity for Marketers

It's fall 1997, and I'm eating a quick lunch at the basement cafeteria in one of the legislative buildings in Washington, DC. With me are two executives from the Direct Marketing Association's national office and three other executives from Atlanta representing Georgia companies involved in direct marketing.

We are doing a one-day visit with our lawmakers to lobby on behalf of issues important to DMers. The day has been arranged by the DMA, and one of the executives with us at the table is the DMA's chief lobbyist in Washington, so this is really his show. We are just along to bring the issues home to our local representatives.

This morning we met with Reps. “Mac” Collins and John Lewis. For the afternoon we have the heavy hitters: Sens. Paul Coverdell and Max Cleland. Bob Barr had us scheduled, but had to duck out at the last minute. Apparently this happens a lot, and it doesn't bother the DMA's senior lobbyist.

What did bother him was the comment I just made about telemarketing.

Telemarketing was one issue on our agenda, and I told both of them that I was uncomfortable with the DMA's stance that the DMA and the American Teleservices Association should handle the problems through self-policing.

“It seems to me,” I said naively, “that calling people who don't want our calls flies in the face of the concept of targeted marketing.”

Both men shot me a reprimanding look and noted how many telemarketing jobs would be lost if the federal government imposed mandatory restrictions on the ability to telemarket.

I returned to Atlanta and was contacted a few months later by the DMA's Georgia state lobbyist (who coincidentally was a former lobbyist for MCI). Georgia's legislature was considering a bill that restricted what telemarketers could say when selling insurance to seniors.

“We gotta stop this thing,” the voice on the other end of the line said. “Get as many business people as you can to call their legislators. The AARP is against us on this one, and it's gonna be tough.”

I never called my state legislators, but instead wrote a polite e-mail to my contacts at the DMA resigning my position as Government Affairs chair for the DMA's Atlanta chapter. In my e-mail I told them that I thought the DMA was on the wrong side of the telemarketing issue and that if the industry didn't do something substantial soon, it was likely to face serious regulation that would make things even worse for everybody.

Fast forward to today. The do-not-call list is in full operation, and direct marketers everywhere are learning to do without as much reliance on consumer telemarketing as they once enjoyed. Unfortunately, I was right then.

And I think I'm right now. There's a new issue that could be more problematic for an even wider range of industries: privacy.

If you believe the papers, several data companies appear to have inadvertently provided hundreds of thousands of consumer files to criminals, including Social Security numbers and driver's licenses … enough information to wreak havoc on these customers' credit and their lives. Predictably, legislators at every level are getting involved, and they are threatening regulation.

Why the rush to act? Like the backlash against telemarketing, this one has been brewing for a while. It has not gone unnoticed to consumers that something is slightly akimbo when a group of companies collects the most private information on individuals, sells it to other companies so they can make decisions about that individual and then turns around and sells the individual's own personal information back to him so he can check whether the company got it right.

Admit it. This industry does, on the face of it, treat consumers and their information as a commodity to be packaged and sold. And consumers don't like it or trust it. This is not new. This mistrust has been there for decades. Only now it's magnified by the reality of the Internet.

Plainly, every industry that uses consumer data needs to immediately treat this as a problem to solve, not just an annoyance to overcome. We should rally around the privacy advocates and offer to help them in any way we can. We should find ways to take positive and real steps to ensure that, as marketers, we actually do protect the privacy of consumers' information.

But will we? A lot of powerful players are in this one with big money at stake. There are the credit bureaus and data aggregators that collect and sell the information and the financial institutions and other businesses that use it. And there are various middlemen and ancillary companies surrounding the industry who also make a tidy profit on the consumer data trade. Unlike telemarketing, this issue touches a broader range of industries, and they all have reasons to maintain the status quo.

Many different industries use consumer information for all kinds of purposes, including credit offers, employment and, of course, marketing. Changing the privacy landscape, if not done correctly, could have much more extensive implications than the no-call list did.

What will the marketing community do? I hope we don't blow it again. I hope we find a way to do more than stall and obfuscate. I hope we get on the consumer's side, take the bull by the horns and lead the charge for change.

We need to put short-term gain aside for long-term profit. If this service has a significant downside, then the service needs to be overhauled. If even a few consumers have their lives ruined so somebody can make a profit, then we need to fix the system.

If we don't, as Yogi Berra once said, it could be deja vu all over again.

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