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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In a recent Infosys global survey, 39% of the respondents said that they consider data mining invasive. And 72% said they don't feel that the online promotions or emails they receive speak to their personal interests and needs. Yet, Sivaram says, "consumers are willing to part with personal information, provided there's good reason to."

The result is a high-tech Catch-22: On the one hand, consumers want to receive highly targeted and personalized products and services. On the other hand, they don't want to feel as if their personal data is up for commercial grabs.

"Retailers need to do a much better job of using the data that they already have to reach their customers," says Sivaram. "At the same time, they have to be careful about being seen as invasive because they don't want to get into trouble and lose the trust of their customers."

So what's the solution? According to Sivaram, the answer is for big data collectors "to establish the right incentives" for people to divulge their personal details. For example, by showing people that sharing their information can earn them loyalty points or discounts, companies can create greater value for their customers while converting consumer trust into a competitive advantage.

The same rule of reciprocity applies to online content as well. Says BlueKai's Tawakol: "When we have asked people in surveys, 'Would you prefer to pay for your content or would you prefer to have targeted ads alongside your content?' it's usually in the high 90% of people who would prefer sponsored content."

Setting a code of conduct

However, not everyone believes that the burden should be placed on consumers to blithely agree to share their data, decipher confusing privacy policies or swap credit scores for grocery coupons. For example, Michael Walker says that big data professionals should adopt a code of ethics. A managing partner at Rose Business Technologies, a Denver-based systems integrator and IT services provider, Walker has drafted a 12-page data science code of professional conduct covering everything from the role of data scientists to their daily responsibilities (see story below).

"Companies are starting to understand the danger of secondary uses of information and how people's personal data can be abused," says Walker. "Once they start to think about it, they're very much in favor of an ethical code."

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