Big data blues: The dangers of data mining

Big data might be big business, but overzealous data mining can seriously destroy your brand. Will new ethical codes be enough to allay consumers' fears?

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Full cookie disclosure

While setting internal controls can help, you can go a step further by offering consumers a firsthand look at what's known about them. One company that has an open-book policy like that is BlueKai, a Cupertino, Calif.-based vendor that offers a data management platform that marketers and publishers can use to manage and activate data to build targeted marketing campaigns. In 2008, BlueKai decided to launch an online portal where consumers can find out exactly what cookies BlueKai and its partners have been collecting for them, item by item, based on their browsing histories.

Consider, for example, a woman who is shopping online for a red bicycle. As she visits different sporting goods sites that partner with BlueKai, a collection of anonymous cookies is stored on her browser. Based on this browsing history, BlueKai marketing partners will display behavioral ads on the woman's computer that are relevant to her bike-shopping quest.

These days, most online shoppers realize that it's not a coincidence when they see ads that are clearly tied to their browsing histories. But the BlueKai Registry makes the process more transparent, and even allows visitors to opt out of the registry altogether or update their anonymous profiles by changing their preferences.

BlueKai CEO Omar Tawakol says the thinking behind the registry is that, "If there's data known about you that's tradable between any two entities, it should be completely controlled by the consumer." For this reason, BlueKai also encourages its partners to post private versions of the registry on their own websites to allay consumers' concerns and promote greater transparency.

"The beauty of what we do is we don't know who you are," says Tawakol. "We don't want to know anybody's name. We don't want to know anything recognizable about them. All we want to do is show you that your cookies are accessible, and that they have these attributes associated with them."

BlueKai isn't the only big data rock star that's handing out backstage passes. Marketing technology company Acxiom recently made headlines by launching, a free site where people can view some of the information the Little Rock, Ark.-based company has gathered about them. Details range from marital status to what kind of vehicle you drive. Visitors simply enter key personal information to find out what data advertisers are using to help tailor their marketing messages.

The fact that powerful data brokers such as Acxiom are helping to demystify data-driven marketing initiatives is no surprise to BlueKai's Tawakol. He believes that companies have no choice now but to respond to changing consumer sentiment around data privacy. "Years ago, people built data companies in the shadows where consumers had no control," he says. "It's a different age now -- consumers should be in control."

Davis' perspective on the move toward greater transparency is more cynical. Noting that "organizations are starting to face increasingly close scrutiny around their data practices," he says companies have an ulterior motiving for coming clean about how they use information like ZIP codes and credit scores: Doing so helps them avoid legal entanglements and bad press. What's more, Davis says, many initiatives that are touted as offering people insight into how they're being tracked are more about public relations than full disclosure. "What they're still not telling me is who's buying that data and what they're doing with it," he says.

Policies under fire

Unfortunately, greater transparency doesn't always translate into greater understanding. The privacy policies of industry titans such as Facebook and Google have recently come under fire for being hard to understand and far too long to slog through. Presented as 70-page novellas filled with vague terms like "non-personally identifiable information," some policies have even sparked probes by regulators at the Federal Trade Commission.

In fact, the results of an April 2012 survey by strategic branding firm Siegel+Gale indicated that users have little understanding of how Facebook and Google track, store and share their information. Survey participants were asked to review Facebook's and Google's privacy policies and then rate how well they understood them on a scale of zero to 100 (with 80 indicating good comprehension). Facebook scored 39 and Google 36 -- indications of poor comprehension.

"People don't understand what they're agreeing to," says Davis. "Organizations make it a lot more complicated than it should be." Besides, he adds, "reading all of the terms of services that we receive would take us 76 days a year."

That's not to suggest that privacy policies have no value in the world of big data. Rather, says Nans Sivaram, a client partner at IT consultancy and outsourcer Infosys, instead of sharing terms and conditions, companies need to "[communicate] the value consumers will receive if they part with certain information."

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