The Dirty Secret Behind User Data Collection & Tracking

Posted by Sean Carton | March 23, 2012 | 3:37pm

By Dr. Sean Carton, Chief Creative Officer and Professor of the Practice at the University of Baltimore

Privacy’s always been a big concern on the Internet. Ever since the invention of “cookies” back in 1994 there’s been an ongoing (and sometimes contentious) debate over who gets to collect personal data about users, how that data is collected, and how it’s used.

On one side are the marketers, retailers, advertisers, and publishers trying to gather as much data as possible in order to target advertising more efficiently, sell more products, and deliver content tailored to users’ needs and wants. On the other side are privacy advocates, “hacktivist” groups like the now-infamous Anonymous, and consumer organizations who contend that collecting data about online behavior is an invasion of users’ right to privacy. But while the privacy advocates have won a few skirmishes in the war over the decades, the trend vectors have always pointed towards collecting more and more information.

Recently the debate flared up again over Google’s moves to capture and aggregate data from across their many properties (including Google+ and their ubiquitous search engine) in order to form incredibly detailed profiles of users and their online behavior. While Google has been labeled with charges that they’re betraying their “don’t be evil” unofficial motto, alleged actions such as bypassing browser privacy settings in order to track users via cookies have made their protests ring a bit hollow in the ears of the public and have spurred government regulators into launching an investigation of Google’s actions.

There’s no denying that having your behavior tracked online can make anyone a bit uneasy. Even if you’re the most straight-laced Web surfer on the planet, the idea that someone, somewhere is looking over your shoulder and recording your every move online is a bit creepy, not to mention a little too 1984 for many of us. Nobody likes being watched, especially when “being watched” also includes recording absolutely everything you do.

On the other hand, whether we like it or not tracking online behavior has become an integral part of online marketing. While early online ads were usually served up on a straight CPM basis with little targeting beyond what section in a site they appeared in, ad serving software has become increasingly sophisticated over the years. Today, behavioral targeting of online ads has become the norm, serving up ads to users based on their search behavior, browsing patterns, and social media interests. While the Holy Grail of online advertising—delivering the exactly right ad exactly at the right time to exactly the right user in order to drive response—hasn’t arrived yet, we’re a lot closer than we were when HotWired ran the first banner ad for AT&T back on October 27, 1994.

But it’s not just advertising that’s being driven by tracking data: increasingly publishers are using behavioral data to serve up everything from search results to news articles. In fact, one of the big changes that Google has instituted has been to tailor search results based on past searching and browsing behavior…and not just paid search results: organic search results are being targeted, too. Facebook also uses behavior to tailor the information we see in our News Feeds, serving up postings from our online friends based on a complex algorithm that takes into account what we post, what we read, and what we “like.” While many feel that algorithmic content targeting can be beneficial, serving up more content we want to see and less we don’t, others (such as The Filter Bubble author Eli Pariser) have worried that this kind of targeting will lead to a polarization of discourse as users increasingly see only what they want to see and aren’t exposed to dissenting viewpoints or information.

And so the Data Wars rage on. But while privacy advocates and online businesses continue to fight pitched battles over the ethics and methods of online tracking, it turns out that there’s a dirty little secret that nobody’s talking about.

It turns out that very few people are actually paying attention to the terabytes of data being collected. “Big Brother” (or “Big Advertiser”) might be watching, but he’s really not paying all that much attention.

A recent study by Columbia University’s Center on Global Brand Leadership and the New York chapter of the American Marketing Association found that more than half of senior-level marketers report that lack of data sharing across their organization is a “major obstacle” to their effectively calculating the ROI of their marketing efforts. Nearly half (45%) of those surveyed reported that they’re not using data to effectively target their marketing communications and a nearly identical percentage (42%) reported that they’re not able to link data to individual customers. When it comes to tracking user data from newer platforms (such as social media and mobile channels), even fewer were even collecting information, with 35% reporting that they collected social media data and only 19% reporting that they collected data from mobile users.

One might be tempted to dismiss one survey, but it’s harder to ignore when similar results are reported by other studies. In fact, a January 2012 study by business-intelligence firm Empirix found that only 39% of C-level executives in the US and Western Europe reported that their companies were “making the most” out of data generated by prospects and customers. Another survey released in late 2011 by IBM found that more than 70% of global Chief Marketing Officers (CMO’s) felt “unprepared” for the explosion of data they’re now collecting from customers and prospects. A more recent study released in February of 2012 by data management firm DataFlux (PDF download) found that a mere 17% of companies surveyed have achieved a unified view of their customers…and only 1 in 10 respondents knew whether or not their company was trying to do anything about it.

Clearly there’s a huge gap between the vision of malevolent omniscience often described by privacy advocates and the reality of companies struggling to stay afloat in the tide of data now available to them. While there’s no doubt that lots of data is being collected about our online behavior, it turns out that most companies don’t seem to know what to do with it. And even if some in the company want it, it turns out that most aren’t equipped to combine multiple streams of data into the kind of coherent total picture that many fear.

Does this mean that we think as advertisers we should be striving to eliminate consumers’ privacy in an effort to wring out (and use) every last drop of behavioral data? No. Besides the fact that we actually believe Google’s erstwhile “don’t be evil” motto, we also believe that too much data can be a dangerous thing for a number of reasons:

  1. First and foremost, there’s no “us vs. them” when it comes to tracking consumer behavior. We’re all consumers, too…and all that behavioral information gathering makes us uneasy, too.
  2. Until the Law catches up to the reality of user data collection and storage, it’s probably better to err on the side of caution. While one company might have all the best intentions in the world when it comes to collecting, storing, and using tracking data, there has been no definitive legal precedent in regards to protecting that data from being transmitted to other (potentially not-so-ethical) parties who may want to use it. On the one hand decisions handed down in cases such as Viacom International, Inc. vs. YouTube, Inc. have said that companies can’t be compelled to hand over user data, while other decisions have affirmed that the government can get access to your online data without a warrant. Until there’s a definitive decision one way or another there’s no way of knowing who can get access to your data and under what circumstances anyone can be compelled to provide it.
  3. It’s one thing to collect data…it’s quite another thing to do something intelligent with it.  If you’ve ever had your recommendations suddenly go haywire after buying gifts for the children in your life (“My Little Pony,” anyone?) or have been bombarded by ads for products you were searching for long after you’ve made a purchase, you know that the algorithms that govern behavioral targeting aren’t exactly perfect. Actually using the data you collect intelligently requires a lot of time and effort. Using it incorrectly can result in irritated customers who go somewhere else.
  4. Paying too much attention to short-term numbers can result in losing sight of your long-term goals. As Ben McAllister points out in this piece in The Atlantic, companies who become too reactive can fall into what he calls “The Measurement Trap,” a focus on short-term thinking that can damage long-term brand value.

Are we saying that measurement is wrong? Absolutely not: paying attention to advertising channel performance, response rates, user trends, and other campaign key performance indicators (KPI’s) is more important now than it ever was. We’re long past the days where agencies could just smile and ask their clients to trust them that a campaign was working. Accountability is where it’s at, and it’s a core part of what we do here at idfive (and why our campaigns provide so much value to our clients). Likewise with targeting: being able to hyper-target your campaigns to your audiences vastly increases the performance of your advertising (and stretches your marketing dollars, too).

But examining performance trends and targeting customers based on aggregated data are one thing…collecting personally-identifiable information on customers and not being able to protect or intelligently use that data are something else entirely.  While today the possibilities offered by data collection and aggregation technologies may not match the realities of actually using it, as that gap narrows, “Big Data” is sure to become an increasingly-popular buzzword in the world of advertising and marketing. It’s important that as we move forward we all remain aware of the benefits and drawbacks of capturing user data and work collectively to use it ethically and responsibly.