The explosion of the internet as a viable marketplace creates pressing concerns for consumers and marketers alike. Consumers hoard or falsify their personal data, fearing identity theft or unwanted email or spam marketing schemes; they place different value on different types of data, tending to be more cautious with financial and health information; they are concerned about their own lack of awareness of a firm’s strategy for using and protecting their personal information; and they tend neither to read nor understand the privacy policy of the companies they do business with online.

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.”

The Center for Marketing Technology and Information aids marketers and academics by offering a white paper on internet privacy that summarizes good and bad practices for privacy issues, and suggests strategies for developing a viable privacy policy.