Digital Privacy in the Marketplace

T
he information environment in which marketers and consumers oper
ate is growing in complexity every day. New technological innovations
have the accelerated the exchange of information between marketers and
consumers, resulting in numerous privacy problems. Examples of such
technologies that cause privacy problems include prediction models that
identify pregnancies before families get to know, glasses that can take
pictures of people unobtrusively in public, tracking software in phones
that can be used to observe consumers movements throughout cities and
within stores themselves, and facial recognition software that can be used
to match consumer images with databases to identify individuals in pub
lic spaces. These advances raise the question of whether privacy is at all
possible.
Managing the new information environment is akin to trying to drink
water from a fire hose (Perreault 1992). There is simply a lot of data avail
able. Data, when combined with other data, become information, and its
value increases (Data and information are used interchangeably through
out this book). With the proliferation of new information technologies,
marketers have access to more information than ever about individual
consumer’s purchase behaviors, their online browsing behaviors, and
their social lives that they willingly document on social networks. Data
mining and modeling techniques are helping marketers to connect dis
parate pieces of information about consumers together to create accu
rate purchase intention profiles. These developments can help marketers
be more successful in “understanding what consumers want,” but these
actions also bring up privacy concerns.
It is imperative for marketers to address privacy concerns because not
dealing with them can have negative impact on their market performance.
In the current environment, the access and flow of information among
consumers and businesses is creating tremendous opportunities and a
foundation for economic growth. Yet, privacy concerns are not going
away and in fact will continue to grow in severity. How privacy issues get
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INTRODUCTION
resolved will have a direct impact on the economy. In order to reap the
benefits of the big data environments and to protect consumer interests, it
will be necessary for marketing managers to create information exchanges
that at the same time preserve consumers’ legitimate needs for privacy.
The Purpose of the Book
T
his book examines the privacy problem from both consumers’ and busi
nesses’ perspectives. To address these issues, this book focuses on the data
exchanges between marketers and consumers, with special attention to
the privacy challenges the data exchanges present for both marketers and
consumers. The perspective offered recognizes that information exchanges
are beneficial to both businesses and consumers. Information helps busi
nesses improve their marketing efforts and helps consumers have access
to information to make better purchase decisions. At the same time,
there are technological and marketplace developments that heighten
the need to put more attention toward protecting information privacy.
Advancements in information technology are happening at a pace that,
without proper supervision or regulation, are creating privacy violations
that end up offsetting the efforts of both businesses and consumers to
benefit from the information exchanges.
To better understand the privacy dilemmas brought about by the new
technologies, this book serves as a background source to help the reader
think more deeply about how privacy issues affect both consumers and
marketers. It covers topics such as why privacy is needed, the techno
logical historical and academic theories of privacy, how market exchange
is tied to privacy, what are the privacy harms and privacy protections
available, and what is the likely future of privacy.
A core feature of the book is the review of the information exchange
process, where the inhibitors and promoters of the process are high
lighted. The book concludes with the importance of marketers and con
sumers reaching mutually agreed upon norms of behavior to eliminate
the creepy and damaging marketing practices that are occurring today.
It offers suggestions for change, including a call of putting privacy in the
forefront of education and business practices.
INTRODUCTION xv
T
he specifics of the following chapters are as such. In Chapter 1, the
information environment and the privacy problem is reviewed, which is
created by markers and consumers differing expectations for technology
use. In Chapter 2, the question of whether privacy is dead is examined
and privacy is reframed in terms of social norms. Then there is a review of
the reasons why both consumers and marketers need privacy. In Chapter 3,
there is a review of the history of privacy and technologies and an expla
nation of key modern academic theories of privacy that apply to the busi
ness world. The theoretical theories inform how marketers and consumers
negotiate information exchanges that meet data and privacy requirements.
In Chapter 4, privacy in the market place is discussed. Here, the role of
social contracts is discussed within the context of the influencing factors
attributed to marketers and consumers. Next, in Chapter 5, there is a
review of privacy harms and a discussion of the marketing technologies
that can lead to these harms. Following, in Chapter 6, there is a review of
the forms of privacy protection offered through legal, self-regulatory, and
technological avenues. In Chapter 7, the final chapter, there is a discus
sion about the direction privacy protection is likely to take in the future, a
discussion of the creepy actions taken by marketers, recommendations for
the establishment of mutually agreed upon norms between marketers and
consumers, and suggestions for improving the role of privacy education
and business practices.