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Is Privacy an Anamoly? Collective Intelligence

December 1, 2008

The New York Times recently ran an excellent article by John Markoff about the changing concept of individual privacy in the digital age.  The article discusses some of the implications associated with being increasingly connected.  GPS enabled devices, online activity, social networks, credit card purchases, and other technologies can paint a vivid profile of an individual, which could be used by numerous sources for activites both good and bad.

How could such data be used for good?  Suppose a company possessed information about where you are, what you are doing, and why; they could offer you real time incentives to purchase specific products.   It would be analogous to virtual haggling to get consumers to behave a certain way.  Need a pair of dress shoes?  Are you at the mall?  You wear a size 11 right?  Well suppose a retailer within the mall knew you were there looking for a size 11 dress shoe, which they just so happen to have an abundance of in stock.  They could text you a message stating that for the next 3 hours you could redeem the text on a new set of black loafers – size 11.  Not only that, they also know that your spouse has a birthday coming up, and will offer you buy one get one 1/2 off to incent you to purchase more footwear.  They know the correct size, and have the ability to make suggestions based on past purchases and the purchases of similar consumers.

Now suppose that this offer is passed up repeatedly by consumers within a period of time.  Just like that, the deal could be modified until the desired consumer behavior occurs. Hyperefficient capitalism at its best.

How could such data be used for not so good?  Well, that retailer or perhaps the credit card company,  may note that you are buying special shoes designed for people with circulatory issues as well as special clothing to help improve circulation in extremities.  They may also note that you are purchasing sugar free candy at the counter, and that you bought a sugar-free latte.  Later, their video might capture footage of you sitting on a bench eating a cookie and drinking juice you bought in the store.  Now suppose an insurance company is concerned about the cost of covering people with diabetes, and wanted to obtain data regarding consumers of specific items that those with diabetes might purchase.   They could follow your activities thorough data purchased from the retailer and make judgements about your risk profile.  This data could then be used to deny coverage to consumers. Hyperefficient capitalism at its worst.

Both of these scenarios are hypothetical in nature and admittedly oversimplified.  One involves the use of data to help a consumer get something they desire.  The other involves the use of similar data to deny a consumer from something they desire. Both involve the elimination of privacy as more and more data is collected about us – sometimes knowingly and sometimes not.

Still, it seems that people overall are not particularly concerned with the collection of personal data.  The attitude toward the loss of privacy in exchange for convenience is overwhelmingly laissez faire.  As Markoff ponders, in an age of Google, iphones, GPS, and Facebook, has privacy “become an anomaly?”

The question becomes what is your company doing with its data?  For most, the reality of today is likely nothing, or at best very little.  For all of the hype surrounding the potential use of data, much of this valuable information sits fallow within the servers, computers, and files of firms.  The big ideas are out there, and now it is a question of who will capitalize on them – good, bad, or otherwise.

Is your company formally gathering, processing and utilizing data to influence consumer behavior?  Could you?  Are you adequately protecting the privacy of your Clients?  Should you be?  Are individuals within your firm potentially accessing sensitive information for their own interests?  Is your competition doing a better job of mining the collective intelligence provided by data than you are?

The reality of today is that you have an amazing opportunity to impact the lives of those whom you serve through data.  How you do so is largely up to you.  For the record, I am a huge fan of size 10 Adidas Gazelles, and I would love a red pair.  The next time I am near your store, text me and let me know if you have a great deal for me.

You’re Leaving a Digital Trail. What About Privacy? – NYTimes.com

Written by davidebowman · Filed Under Business & Leadership 

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