Consumer Groups Say Proposed Privacy Bill Is Flawed (New York Times)
As many seasoned marketers will readily admit, in just a short time span the Internet has transformed all areas of marketing. Its impact can be seen in such decision areas as: managing customer relations (e.g., offers marketers the ability to communicate rapidly with customers); product distribution (e.g., makes every company a potential global marketer); sales promotion (e.g., presents new ways to offer purchase incentives); competitor research (e.g., allows for instant connection to multiple sources of competitive information); and customer tracking (e.g., permits marketers to monitor customer activity).
In fact, some marketers take the position customer tracking is the Internet’s most significant contribution to marketing. Customer tracking provides insight on customer activity that was previously a time-consuming process to obtain but is now available in an instant. Through tracking research website marketers know what attracts customers to their site (e.g., used search engine, clicked on advertisement, etc.) and how customers behave when they are on the site (e.g., what pages they viewed, what promotions they responded to, etc.).
While marketers love the information they obtain from tracking, as we discuss in our What is Marketing? tutorial, tracking for marketing purposes is a much criticized research gathering method with many concerns raised regarding potential violation of customers’ privacy rights. The critics of Internet tracking have been stressing these concerns for many years and it now appears their voice is being heard. According to this story, the U.S. Government is considering implementing new rules that would have important implications as to how marketers track customers.
What is intriguing about this issue is that the potential new rules not only limit tracking over the Internet, it also would apply to other tracking methods such as information gained from customers’ use of loyalty cards during in-store purchases.
Essentially, companies would need to alert consumers whenever any information the companies are collecting can identify a single person or a single computer or device.
Significantly, the bill also requires companies to advise consumers even when they are collecting any of that information off line, which could include data houses and direct marketers.
As noted in the story, consumer groups do not seem pleased with the proposal. What appears to be their main concerns and why do some marketers feel these concerns are overly exaggerated?
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