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Personalization Vs. Privacy Debate Heating Up

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Posted October 31, 2001 By Michael Singer     Feedback

A face-off between privacy advocates and mass marketers is expected to come to a head at upcoming content networking event in San Jose.

The fight between those who want to build great databases of customer information on the Internet and those who want to keep it private is becoming more vocal and the fight may come to a head in a few weeks in San Jose.

A panel of experts on both sides of the issue is expected to voice their opinions at the upcoming Content Networking Event starting December 4.

The face-off between privacy advocates and mass marketers has been gathering steam as the Internet has become a mainstream communications vehicle and as new technologies make it possible to identify users and manipulate Internet content to deliver better-targeted services.

But as a result of several pieces of privacy-related legislation passed this year - including an antiterrorism bill signed by U.S. President Bush last week - and the quickly escalating concerns about national security, the personalization vs. privacy issue has been thrust into the spotlight as a dilemma for which rules and policies need to be decided and enforced quickly.

The latest battleground involves the Federal Trade Commission's review of children's online information privacy and surfing habits.

"At this critical juncture, consumers' confidence and trust will be won or lost by businesses both large and small depending on how we act now using personal identification information," says ePrivacy Group, senior vice president and Los Angeles office managing director Michael Miora.

Part of the controversy stems from the uproar in 1999 over online advertising company DoubleClick's acquisition of direct-marketer Abacus Direct Corp., which made it possible for DoubleClick to link cookies that track users' Web activity anonymously with people's names and addresses in Abacus' database-generally without user knowledge.

A sampling of next month's panelists tend to agree that users' wishes should be respected and that Web sites should give users a choice to opt out of having their purchasing or subscription information stored and used.

Brad Templeton, chairman of San Francisco-based Electronic Frontier Foundation (EFF) says that destroying customer records makes it impossible for those records to be subpoenaed, thus providing the ultimate in user privacy. He says the model of "putting a quarter in a box to anonymously buy a newspaper" still holds merit in the Internet privacy debate.

Still, consumers at this time don't seem to be overly obsessive about the privacy issue. A May 2001 consumer survey from the Personalization Consortium found that 56 percent of respondents says they are more likely to purchase from a site that allows personalization, and 63 percent are more likely to register at a site that allows it.

According to the consortium, the survey also showed that 82 percent of consumers are willing to provide such personal information as gender, age, and ethnicity if the site will remember their preferences and personal information.

At this juncture, though, "most of the tracking that goes on now is anonymous," says Dave Yovanno, vice president of sales and marketing at ValueClick, a company that helps small to mid-sized Web sites gain brand recognition with large advertisers.

Yovanno says, though, that it is difficult to derive important customer information-such as whether someone is male or female-by the anonymous method of caching information about a user's Web activity in a cookie.

"Where personalization like this really becomes important is in customer relationship management and customer retention," says Yovanno.

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