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The Great Data Debate
eMetrics '09: The Web has the potential to change the way companies and consumers interact, but how to make that happen is still up in the air.
Posted Oct 27, 2009
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WASHINGTON — John McKean, executive director of the Center for Information-Based Competition, was having a difficult time winning over the crowd at the eMetrics show here this week. One audience member called his view "very futuristic." Another simply said, "I don't buy it." 

As part of a panel session called "The Great Cookie Debate, or Your Personally Identifiable Information or Your Life!," McKean asked the mix of professionals to imagine themselves as aliens from Mars, coming to decide whether they want to settle based on the intelligence of life here.

(It was at least the second time this week that a presenter at an industry conference asked an audience to "forget everything you know." Earlier in the week, Ken Dychtwald had asked marketers at the Direct Marketing Association show in San Diego to dismiss their perceptions of elderly consumers.)

At least from the business perspective, McKean argued, there's waste and inefficiency, and increasingly less innovation -- a situation, he said, that can only be remedied with "massive innovation" from the buyer side. "The relative amount of information is getting smaller and smaller on the sell side," he said. Therefore, he predicted, we will see a world in which buyers have complete control of all their personal information, thereby empowering them to invite the seller into their "supplier network." Only when there is massive innovation on the buy side (e.g., user ownership of user data), McKean said, can there be massive innovation on the sell side. This concept of "massive innovation," he noted, fundamentally requires an understanding of three things:

  • context;
  • future intent; and
  • an understanding of "who I -- the buyer/individual -- am" at all times.

All the interactions will be understood and agreed upon in very simple terms and once the relationship becomes irrelevant or the context changes, the buyer can pick up and move on -- no hard feelings.

"The world is going to evolve," he said, pointing to an evolution that's already taken place driven by Google. This is not going to be a colossal, Big Bang-type shift, he assured the audience, rather that it will, in fact, continue to be an evolution. "We have all witnessed a historic moment in our lives where consumers have more control than business," he said. "The final evolution of that will be them waking up and taking control of their information," he said -- and that relationship, enabled only by virtue of the Web, will require a fundamental infrastructural shift in how data is monetized today. He says it will be the "geeks with money," the early-iPhone-adopter types, who will be first to set this own-your-data trend in motion.

The audience -- or at least the portion of it that was vocal -- was incredulous of McKean's proposition. Forrester Research analyst John Lovett twittered that "McKean shares vision of individuals owning their own privacy data -- I can't see it." René Dechamps, CEO of NextStage Analytics, twittered that McKean's idea "looks nice," but wondered, "is it doable (practicability)."

McKean's fellow panelists -- Bob Page, head of analytics engineering at Yahoo! in the San Francisco Bay Area, and Aleecia McDonald, a Ph.D. candidate in engineering and public policy at Carnegie Mellon University -- invoked a less-dramatic dissension from the buyer-seller relationship we have now, but they did agree that companies turning to online technologies have many obstacles to conquer in terms of getting closer to users.

"We as an industry haven't been doing a good job of articulating the value exchange," said Yahoo!'s Page, citing businesses like casinos that are more clear about the benefits and trade-offs. Moreover, general misperceptions are increasingly mudding consumer understanding of what's really being "tracked."

[Check out Jessica Tsai's news story from the recent Predictive Analytics World for a related story on the opportunities and pitfalls of predictive analytics.]

And education is certainly one of the obstacles in this "Great Cookie Debate." Even if McKean's world were feasible, McDonald argued that before a "massive evolution" could ever take place, there needs to be "massive education." According to her, 50 percent of people think that online cookies are about their browsing history [Learn more about cookies in this article by HowStuffWorks.com. Hint: It's not about your browsing history.] There are still people struggling with using Google Search, let alone understanding the intricacies of analytics and targeting. More than 70 percent of people believe Web ads are just pop-ups. Basically, most people don't even know the power of their own information.

In a recent blog post for 1to1 magazine, Christopher Carfi, chief executive officer of business solution provider Cerado, emphasized that even while service providers are using your information, it's important to remember that "it is your information" and you have an active role in what happens to it.

McDonald referred back to the Web protocol P3P (Platform for Privacy Preferences Project) which was the industry's attempt at increasing transparency and giving users control over how their information. If the objective doesn't jibe with the consumer's comfort level, they could bail out. "There's a prenegotiation before you get to the site," McDonald explained, which sounded a little like McKean's theory. But P3P didn't take off for two main reasons, she said:

  • Technology lacked the education component and was therefore never widely understood. (Proving her point, less than a third of the audience raised their hand when McDonald asked who understood what P3P was and could define it.)
  • Variations in Web browsers and myriad security marks (i.e., security logos, trust symbols) made it difficult to pinpoint what exactly consumers were comfortable with.

 "Why was it complicated?," McDonald asked. "Because privacy is complicated." People have widely differing views on what information they want out and in what ways. (While most people say they're OK with ads, there's a huge discrepancy in what's tolerable: Companies can store data, but can't share it. They can track what's being clicked but only for one week. They can deliver targeted messages but only if it's through email.)

Companies claim to have comprehensible privacy policies (Google's famous "Don't be evil" philosophy boils it down, at least for shareholders. Incidentally, the philosophy was dropped earlier this year because it was being "misunderstood."), McDonald said that most are written at college reading levels, while the average American reads at a seventh grade level. "It's not that they don't care," she said. "They don't have the knowledge to interpret the information out there." In her research, she calculated that the time it would take for a person to read all the privacy policies she encounters would be valued at some ridiculous number like $700 billion.

The time and money it takes to manage the information of every individual is staggering, McKean said, which makes self-management of identities all the more imminent (McKean said he sees this manifesting within the next 10 years.). He poses a model similar to that of doctors and accountants, where instead of owning the data, Web sites can either charge customers for services based on information given or somehow take a cut of the action on the Web property -- but ultimately, everything works fundamentally for the customer.

"As complexity increases, there's mathematically more uncertainty," McKean said. "So we have to be more invasive to maintain same relevancy." This sounds a little scary, but supposedly it's where legislation comes in.

Page recognized that attempting to abide by all legislation across all jurisdictions is impossible. Page suggested that the lowest bar on Web restrictions should be the law, and company policies should therefore be above that. Discuss and establish distinct bars around values, ethics, and what the company stands for, and if companies can live up to those policies, Page is confident that they will not only be above the policy bar, but safely away from the law bar.

[Editors' Note: In earlier versions of this article, the Center for Information-Based Competition was referred to incorrectly. The editors regret the error.]

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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