A number of lawsuits have emerged in the past decade which accuse firms of using too much personal information when targeting ads over the World Wide Web. Simultaneously, internet companies are experimenting with new technologies to enhance consumers’ ability to maintain anonymity while engaging in internet-based transactions. Marketers must also be able to balance the cost and the benefit of collecting and protecting consumer data.
“Privacy is now an integral and critical part of the marketing mix,” says Robert Blattberg, Ph.D., executive director of the Center for Marketing Technology. “Best-practice companies are installing privacy officers and crafting clear and transparent privacy strategies so that their consumers know why their personal information is needed and how it will be used." Blattberg notes that concerns about privacy have been increasing exponentially in the past few years.
“Companies’ approaches to consumer data vary by industry, by country of origin and by the countries in which a company wants to do business. Building a strong and beneficial privacy strategy must involve an understanding of external factors, such as existing case law, firm-specific factors, a cost-benefit analysis, government and industry regulations, and a plan for implementation. The challenge in building such a strategy is to deliver high-level privacy protection that eases consumer concerns while simultaneously minimizing the costs to the firm.”