D.
Geller - April 26th, 2000
Event
Summary
Twenty-six companies that have an interest in personalization technology
have founded the Personalization Consortium. The companies range from
marketing to technology specialists, and have as a major goal developing
self-regulation guidelines to avoid government regulation of their industry.
Concerns about such regulation have become acute since DoubleClick announced
and then was forced to retract a plan for tying online identities with
actual names and addresses.
DoubleClick
is one of the founding members of the consortium, which will be chaired
by Dr. Martha Rogers and Don Peppers of Peppers and Rogers Group, which
studies and consults on personalization.
In
its first survey on privacy and personalization the consortium surveyed
4,500 Web users. Some of the characteristics of the sampled population
are:
- 97% spend at last two hours a week surfing; 63% spend at least
eight hours
- 85% have made recent purchases online; 49% have spent at least $100
- 94% are registered with at least one website
- 97% have provided personal information to at least one website
- 77% know what a cookie is; of these 62% generally accept cookies,
53% purge their cookie files periodically and only 43% know how to
reject cookies.
Thus,
while privacy is a concern, it is not a big concern. For example, while
it may not be surprising that in order to have a site offer some kind
of personalization, 96 percent would provide their names and 95% would
provide their e-mail addresses, almost as many would provide that information
to a site that did not provide any personalized features.
See
Figure 1 for a complete display of the difference between the two cases,
and note that about 7% of users are willing to provide a social security
number to almost any site they visit!
Market
Impact
It will be important to see how the consortium approaches the development
of guidelines. DoubleClick is heavily invested in the kind of individual
attention that brought it notoriety. It was always the company's goal
for this information to be used on a permission basis only, and the more
savvy of the protests were focused on pointing out that in their opinion
consumers were not well informed about the program and could not easily
opt out.
So DoubleClick in theory would be satisfied with guidelines that require
better notification and perhaps even explicit "opt in" by consumers, but
also knows that the more such features are made known to consumers the
fewer will be likely to accept them. (In fact, though, the study results
can be read as saying that consumers don't really care all that much.)
Interestingly, DoubleClick's main rival, Engage Technologies, which has
a powerful personalization technology that does not require identification
of individuals, does not belong to the Consortium. If it did it might
have an interest in arguing for restrictions that would interfere with
the use of DoubleClick's technology. To what extent there are other sets
of conflicting interests in the Consortium remains to be seen - but if
there aren't any it's hard to see how the eventual recommendations will
have any weight.
User
Recommendations
Any company that is engaging in B2C e-commerce should be thinking hard
about how best to use personalization on their site, and clicks-and-mortar
types will also be interested in tying their retail data to their web
data. Anyone not interested in this data, which serves both to hone marketing
decisions and to keep visitors coming back, is heading for an e-catastrophe.
So the work of this Consortium has the potential of being very important
indeed, and should be watched closely both by companies actively developing
personalization tools and by those planning to use them.