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Might Rockefeller's Lemon Result in Marketing Lemonade?

2/18/14

By Ken Magill

If anyone needs protection from the potentially damaging effects of inaccurate marketing data, it’s not consumers. It’s the businesses that buy the data.

After all, the worst thing that can happen to consumers who have been inaccurately profiled for marketing purposes is they get off-target pitches. The real harm lies in the possibility that money changed hands in return for misrepresented consumer profiles.

So if Congress passes a law resulting in increased marketing-data accuracy—even if data accuracy for the benefit of marketers was not its authors’ intent—we should consider embracing that law.

Or at least maybe we should not dismiss it out of hand.

Sen. Jay Rockefeller [D-WV] and Sen. Edward Markey [D-MA] last week introduced a bill that would give consumers access to data held by so-called data brokers and allow them to correct information about them or opt-out of the use of that data for marketing purposes.

“Consumers deserve to know what information about their personal lives is being collected and sold to marketers by data brokers,” Rockefeller said in a statement. “This booming shadow industry, that generated more than $150 billion in 2012 and operates with very little scrutiny and oversight, is making tremendous profits off practices that can be disturbing and totally unfair to consumers.”

Dubbed The Data Broker Accountability and Transparency Act of 2014, or the DATA Act, the bill is the latest development in a privacy witch hunt Rockefeller has been conducting for at least a year and a half.

One would think after months of scrutinizing data-driven marketing, Rockefeller would have gained at least some understanding as to how it works.

He hasn’t. Consider a statement Rockefeller made during a privacy hearing in Washington in January.

“This [data-driven marketing] affects anybody. Everybody. … I can’t prove it’s wrong, but there’s something lethal about it,” he said.

Suffice it to say if Rockefeller does anything to benefit marketing, it won’t be on purpose.

The Direct Marketing Association correctly criticized the DATA Act as an unnecessary security risk that does nothing to protect consumers from harm.

“Imposing an access and correction regime on marketing data is not necessary to protect consumer privacy and doing so would make it harder for companies to keep data secure at a time when consumers are more concerned about identity theft than ever before,” said Peggy Hudson, the DMA’s senior vice president of government affairs, in a statement.

But at the risk of being labeled a heretic, what if Rockefeller’s misguided efforts result in better marketing data?

First, giving people the ability to opt out of data-driven marketing efforts is an idea we should embrace. Inertia being the powerful force that it is, few will make the effort. And for those who do, good riddance.

“As an industry we believe that greater transparency about what data is available and a lot more ability for consumers to say: ‘I don’t want my data to be used for purposes of marketing to me,’ we encourage that,” said Don Hinman, a senior vice president at Epsilon, in an interview with the Magill Report. “We would like people to opt out who truly want to opt out.”

Not surprisingly, one of the main objections to the DATA Act is giving consumers access to and the ability to change information in their profiles. Even assuming access can be properly restricted, what if people lie or just generally muck up their profiles?

Some certainly will, but what if most don’t? And what if so-called data brokers could figure out a way to offer incentives for people to help keep their profiles accurate? Steep discounts on goods and services tailored to them might be just such an incentive.

When consumers access their profiles data brokers could offer them drop down menus where they could tick off categories of offers they’d be interested in receiving.

Conceivably, people who take the time to manage their profiles and express interest in marketing categories might be hot prospects. Lists of such people could command a premium, resulting in an unintended new revenue stream for data brokers—certainly unintended by Rockefeller, anyway.

Is the DATA Act a solution looking for a problem? Yes. Will it do anything to protect consumers? No. Is it a needless security risk? Absolutely.

But if the DATA Act doesn’t become law, another bill like it will follow. Privacy advocates are hell bent on giving consumers notice, access and choice to and about information concerning them. And certain members of Congress are hell bent to do their bidding.

Wouldn’t it be nice to frost some privacy advocates’ asses by giving them exactly what they claim they want and turning it into a net positive for marketing?

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Terms: Feel free to be as big a jerk as you want, but don't attack anyone other than me personally. And don't criticize people or companies other than me anonymously. Got something crappy to say? Say it under your real name. Anonymous potshots and personal attacks aimed at me, however, are fine.

Posted by: robinteractive
Date: 2014-02-18 17:26:57
Subject: Re: Luke's Comments

Luke makes some great points. What does make this different than credit reports, though, is that credit reports are based on hard financial data. While I can access my credit report for free and dispute certain items, in the case of the data profile mentioned above I would be able to simply change things arbitrarily: three kids to 14 kids, $50k income to $500k income, wipe out any indication that I read ___news.com, etc. I'm more inclined to favor the opt-out option than the build-your-own-marketing profile option (though anyone who has Facebook and surfs the Web arguably does the latter). On a related note, I'd encourage Magill to run Lightbeam on Firefox for a month (using Firefox for that month if he doesn't already) and report on his experiences/impressions re: the Web of data tracking: https://www.mozilla.org/en-US/lightbeam/ And I don't have any bias with that suggestion, just curious about the resulting article with Magill's trademark wit.
Posted by: Luke
Date: 2014-02-18 17:05:07
Subject: The Data Act

I have to wonder how long they took to come up with a name that leads to the acronym DATA for the DATA Act? All kidding aside, I do believe consumers have a right to know what data is collected about them and a way for them to correct it if it is wrong. We do that with Credit Reports and bad or incorrect information can impact a person's credit score which does impact a person's financial life. Since credit reports and scores are one of the most sensitive pieces of personal data out there and we manage to securely manage that process, it should not be terribly difficult to do the same for consumer profiles. Marketers want accurate data, consumers want accurate data about them to get relevant marketing, seems like everyone wants the same thing here.

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