Internet Privacy: Human Right or Trade Commodity?

How do Hollywood studios know whether certain target audiences enjoy their films? Do they send spies into movie theaters to count the ticket purchasers, categorize them into demographic groups, and observe whether they appear to be enjoying themselves?

Well, no, but they do ask theater owners to report ticket sales data each week. On the one hand, this approach cannot inform studio executives whether certain films are more popular with certain demographic groups than others. Nevertheless, on the other hand, it does provide film marketers with a broadly defined measurement of customer popularity.

Television networks have always approached this task a bit differently. Because home viewers do not purchase tickets each time they change channels with their clickers, sales data are not available for analysis. Instead, the networks have traditionally relied on market research firms like Nielsen to pay randomly selected American citizens to report their viewing habits.

Automation for the Sake of Accuracy

Prior to the advent of sophisticated computerized surveillance systems, Nielsen’s participants actually kept handwritten diaries of their individual viewing habits and mailed them in for comparison to devices that were attached to television sets each week. But later, while rolling out more complex electronic viewer recording systems across the nation, the Nielsen folks made a startling discovery: the handwritten records were not “matching up” to the electronic records!

In other words, Nielsen learned that viewers could not be relied on to report accurately about the shows that they were watching in their homes. Some delayed their record keeping responsibilities and then relied on faulty memories to “catch up” with their handwritten entries. Others failed to note that they only watched portions of television shows instead of entire shows.

The music industry discovered a similar truth about its customer base in 1992, when Billboard adopted the Soundscan system and began requiring music store owners to shift from handwritten sales reports to automated electronic data. To the surprise of many record producers, country music proved to be far more popular in America than any other genre, and Garth Brooks was the most popular solo performer in the country!

The “bottom line” imperative for all of these initiatives has been that marketers need to know, with as much statistical precision as possible, whether their target customer groups are purchasing and enjoying their products and services. And such information can be far more effectively gathered through the use of automated tracking systems that elude the attention of customers and vendors, thereby avoiding any possibility of human bias or error.

Privacy vs. Accuracy

Today, of course, the internet offers an ideal environment for pinpoint accuracy in tracking, one that can satisfy every marketer’s needs. Once web site visitors log in with user names, each of their clicks can be recorded and analyzed to identify their personal preferences. Each second that they spend, viewing each web page, can be quantified as well.

In fact, it is no longer necessary for visitors to log in with their user names any longer. Instead, as soon as they open web pages, tracking cookies can be deposited onto their personal computers without their knowledge or permission. And even if they take the time to explore their browser settings and delete those cookies, certain programs (such as Adobe’s Flash video player) may maintain tracking capabilities any way.

Tiny software programs that are deposited on the personal computers of private users without their knowledge or permission? Programs that report personal viewing habits to marketers in a secretive manner? Law enforcement investigators may be unable to tap private telephone lines without search warrants, but in the pursuit of accuracy in tracking personal web site viewing habits, marketers routinely perform such activities without stopping to consider whether they are engaging in invasions of privacy.

Government to the Rescue!

Within the past two weeks, a pair of federal government proposals have emerged to address this situation. Although legal scholars have long debated whether the United States Constitution implicitly guarantees each citizen a right to privacy, over the years, federal mandates such as the telephone marketer’s Do Not Call registry have been implemented to protect Americans from the inquisitive eyes of third parties who seek to intrude on their private moments.

That’s why the Federal Trade Commission recently proposed a Do Not Track registry for internet viewers, modeled on the Do Not Call registry for telephone users. And that’s why the United States Commerce Department recently proposed an internet Privacy Bill of Rights, to be managed by a regulatory Privacy Policy Office.

Such proposals still remain in their infancies; they have not yet been codified into formal legislative bills and placed through the customary Congressional vetting and voting processes. Nevertheless, despite Facebook founder and CEO Mark Zuckerberg’s assertion that privacy is no longer a social norm, the current backlash against secretive internet tracking activities may continue to dominate industry debate well into the future.