Privacy vs. personalized marketing debated

By Rick Perera, IDG News Service |  Business

Promoters of techniques for personalizing content on e-commerce Web sites say the techniques are a valuable marketing tool. But privacy advocates caution that it's bad business, as well as bad ethics, to misuse personal data.

Speakers Wednesday at the Komm conference, held at the Internet Commerce Expo (ICE) in Dusseldorf, Germany, offered tips on how businesses can better tailor Web content to individual users' needs.

"Personalization has something to do with marketing, of course," said Rainer Zahner, manager of Nuremberg, Germany-based Internet consulting firm Eskatoo, "but of course it has a lot to do with the user as well." Visitors to e-commerce sites are just as pleased to have their individual needs anticipated, he said, as a shopper at a department store would like to be personally greeted by a salesperson who already knows the shopper's size and what color shirt or tie he would be likely to buy.

Advantages of personalization are that the customer feels understood, information is delivered on an individual basis, and users are offered a quicker path to relevant data, he said.

But Thomas Gessner, managing director of Broadvision Deutschland, a subsidiary of e-commerce software provider Broadvision, warned that data collection in e-commerce is a two-way street.

"Remember, there's a relationship between what I want to know and what I give [the user]," he said. "If I don't offer sports news, I shouldn't ask him if he's interested in sports."

He mentioned an online questionnaire posed by a German wine dealer. After inquiring about the user's tastes and preferences in wine -- reasonable questions, Gessner said -- it asked for the user's annual income. Irrelevant questions are off-putting, he said, and likely to contribute to users' impressions that companies are collecting sensitive personal data about them.

Jason Catlett, president of Greenbrook, N.J.-based Junkbusters, offered another hypothetical: Say an online bookseller tracks what books users place in their shopping cart but then remove without purchasing them and then [the bookseller] offers the same titles at a discount on the user's next visit. A good marketing tactic? No, he said. "It spooks the customer ... to have it rubbed in their nose that you're tracking their every move."

Other "idiot marketers" have dreamed up the idea, he continued, of tracking what shop windows customers are looking at, then sending tailored discount offers to their mobile phones. "Don't stalk the consumer," he warned.

Collection of personal data, Catlett said, should be relevant to the service provided and anticipated by the user. Otherwise it's likely to scare off repeat customers and lead to damaging media criticism and risky legal headaches.

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