The Piracy of Your Privacy

Privacy on the Internet has become non-existent in the digital age.  Your digital footprint is tracked and analyzed by various marketing firms all vying for your attention.  They have found ways to weasel into your computer, tablet, phone, and other Internet-connected devices.  They know every website you visit, how long you were there, what you did there, how long you were there, how you got there, and even where you are signing in from.  Nothing is secret anymore, so be mindful of the information that you send to cyberspace. 

Web browsers like Google Chrome have found a sneaky way to track all of your digital movements across all devices.  They ask you to sign in.  This act allows Google to keep a history of all of your movements on all devices.  The “Stay Signed In” checkbox on the login page keeps this action further from the user’s mind because they do not have to sign in each time they open Chrome. 

Chrome is also able to combine all of your Google services.  Like the slogan on the page says, “One account.  All of Google.”  This means that they know of all of the Google Apps you are using and how you are using them. 

According to PC Mag, the Federal Trade Commission (FTC) issued an advisory on Web tracking of customers.  Chrome was one of many browsers to enable features that protect their users from advertisers.  They also have an Incognito Mode that allows users to move around the Web without leaving a footprint behind.¹  While these options allow a user their privacy, most users are not aware that they exist or understand their purpose. 

Further actions have been taken in the industry with the creation of websites such as donottrack.us.² which allows users to opt out of tracking by websites that they do not personally visit.  However, a Wall Street Journal Investigation found that the top 50 websites in the United States install an average of 64 individual trackers to visitor computers.³ These trackers are often fast and invisible.  Even though this article was written in 2010, it is not hard to imagine that tracking software changes as fast as its governing laws do.

Why do companies want to stay ahead of governance?  NBC News reports that is because online data has been transformed into a lucrative marketplace.  Information is being sold to the highest bidder.  This information includes names, addresses, phone numbers, and credit card numbers, which are being traded out in the open.⁴  This continues to be a growing concern among consumers.  According to a study performed by the Pew Research Center, fifty percent of Internet users are worried about the information about them online, compared to thirty three percent in 2009.  Of those surveyed, eighty six percent of people have tried at least one technique to hide their activity online or avoid being tracked.⁵  The study also found that 68 percent of people feel that the law is insufficient to protect their privacy.

Causes of Privacy Loss:

•  People are providing too much information on social network sites and email.
• E-Commerce sites are better able to hide their tracking
• Security breaches of E-Commerce websites

 Laws for security breaches come from individual states.  Currently, states require businesses and public agencies to notify consumers of security breaches of personal information.  According to USA Today, California often leads the way in challenging privacy issues.  They are considering multiple protections for Internet users.⁶

•  Password Protection – California feels that security breach laws should also protect passwords, usernames, and security questions.  Hackers for popular social media websites such as Facebook, Twitter, Google, and Yahoo stole nearly two million usernames and passwords.
• Do Not Track – While current legislation does not ban tracking, the new legislation requires companies to disclose how they comply with requests from Internet users who ask not to be tracked.
• The Teen “Eraser” Law – Requires all website and mobile app operators to provide a way for those under 18 to delete a posting or photo.  The reasoning is to protect those under 18 from publically sharing “ill-advised pictures or messages”. 

Works Cited

1. Muchmore, Michael. "Google Chrome 31." PCMAG. PC Mag, 11 Dec. 2013. Web. 18 Feb. 2014.

2. Mayer, Jonathan, and Arvind Narayanan. "Do Not Track." - Universal Web Tracking Opt Out. Center for Internet and Society, n.d. Web. 16 Feb. 2014.

3. Butler, Christopher. "Unlimited vs. Limited Web Tracking." Tracking Best Practices. Newfangled, 01 Sept. 2010. Web. 18 Feb. 2014.

4. Sullivan, Bob. "Online Privacy Fears Are Real." Msnbc.com. NBC News, 6 Dec. 2013. Web. 18 Feb. 2014.

5. Flaherty, Anne. "Study Finds Online Privacy Concerns on the Rise." Yahoo! News. Yahoo!, 05 Sept. 2013. Web. 18 Feb. 2014.

6. Prah, Pamela M. "Target's Data Breach Highlights State Role in Privacy." USA Today. Gannett, 10 Feb. 2014. Web. 17 Feb. 2014.

An Update on Do Not Track and Privacy

In his January 2013 post to the Digital Analytics - University of Utah course blog, McCall Lewis wrote about the ongoing debate surrounding online consumer privacy and efforts towards a standard for "Do Not Track" [i].  McCall correctly stated that 2013 would be the year that these issues came to the consciousness of the consumer at-large. In this post, I intend to explore the ongoing saga of Digital Privacy and how consumers and online entities are reacting.

Digital Privacy in 2013, In a Nutshell (Help!  I'm in in a nutshell!)

It is safe to say that by the close of 2013, no American was completely isolated from developments in the world of digital privacy.  This was the year of Edward Snowden and Wikileaks, which exposed such government spying programs as PRISM, Tempora, and MUSCULAR [ii].  If people were not previously concerned with the monitoring of their internet behavior, it is hard to believe that they were not starting to think about it.  Most relevant to Digital Analytics is the allegation that the NSA was using cookies to piggyback on the tools that digital advertising firms were using to "pinpoint targets for government hacking and to bolster surveillance".  Google, Yahoo!, and Microsoft announced plans to encrypt traffic between their data centers, with Microsoft indirectly comparing the threat to that of Chinese government-sponsored hacking [iii].

Beyond allegations of government spying, other news events triggered a growing concern for digital privacy amongst citizens.  It was revealed that Google, despite their unofficial corporate motto being "Don't be evil", was collecting and storing data on WiFi networks while driving the avenues and boulevards in their mapping vehicles [iv].  Inadvertent or not, this revelation made big headlines in the year of Digital Privacy concerns.  Beyond government and corporate spying, there were a number of black-hat news stories as well.  Major retailers such as Target and Neiman Marcus were victims large-scale data breaches in which personal and credit card information were stolen from their servers.  While nothing connected to a network is ever totally secure, some of the details surrounding these breaches made it clear that retailers were not doing everything that they could to protect this sensitive data. In this particular case, the suspected security snafu source was an HVAC contractor that was given the keys to the castle, which were thusly compromised [v].

Current Sentiment

Not surprisingly, there have been numerous studies trying to suss out what the consumer reaction is to all of this. A University of Vienna focused on the act of "Virtual Identity Suicide" within the online social networking site Facebook.  The single biggest cause for this phenomenon, where a user deletes as much of their content as possible before permanently locking themselves out of their account, were concerns over privacy.  Among users studied, over 48% expressed this viewpoint [vi]. It turns out, they have a right to be concerned. Austrian law student Max Schrems found out, in 2010, that Facebook had over 1,200 pages of data on him alone.  This included data that he had never been supplied, but had been linked to him through his friends contact list.  As big-data analytics gets more powerful, this could translate into an enormous amount of personal information being available to online companies [vii].

Using information like Facebook collects, identification of protected classes is not only possible, but on the verge of child's play.  The Center for Digital Democracy is making efforts to address its concerns to the FTC.  They state that technologies such as hyper-local targeting, geo-fencing, and cross-platform targeting will allow for rampant discrimination.  The sorts of questions that it is illegal for employers to ask (age, marital status, sexual orientation) will become easily attainable information [viii].

TrustE, a digital privacy management company, conducted a study regarding consumer opinions about Online Behavioral Advertising recently [ix].  They found that 69% of internet users understood the value trade-off of online ads versus free content, but only 26% are willing to actually accept the same.  It seems as though most internet users feel powerless in the process that they need to just accept what is offered.  The study also showed that 62% of users would be more willing to do business with a company that allowed them to opt-out of targeting.

Ongoing Efforts

The WC3 is spearheading a Do-Not-Track and privacy working group, but things are not going as well as could be hoped.  One of the biggest internet watchdog and lobbying organizations, the EFF (Electronic Frontier Foundation), has lost confidence in the group [x].  They have directly stated that if the group continues in the direction that it is currently headed, that they may be forced to drop out.  Another watchdog group has a similar stance.  Jeffrey Chester, of the Center for Digital Democracy as called the efforts of the group "a farce".  It appears as though the group cannot even get the definition of tracking nailed down.  Are they concerned with 1st party cookies, 3rd party cookies, or other methods of data collection?  Original efforts in the Do-Not-Track space only targeted 3rd party cookie based ads, providing a guise of privacy to the relatively uneducated user.

It is unclear what the future may bring in terms of digital privacy, but it is doubtful that it will continue to be as unregulated as it currently is.  The European Union is enacting tough laws, requiring explicit consent in some areas, rather than the arguably implicit consent given by endless EULAs and TOCs that no one actually reads.  If the FTC gets involved in the United States, things are likely to change.

[i] Lewis, McCall ‘The “Do Not Track” Debate’ Digital Analytics – University of Utah, January 26, 2013. http://dauofu.blogspot.com/2013/01/the-do-not-track-debate.html

[ii] Wikipedia contributors, "Edward Snowden," Wikipedia, The Free Encyclopedia, http://en.wikipedia.org/w/index.php?title=Edward_Snowden&oldid=595457266 (accessed February 5, 2014).

[iii] Wikipedia contributors, "MUSCULAR (surveillance program)," Wikipedia, The Free Encyclopedia, http://en.wikipedia.org/w/index.php?title=MUSCULAR_(surveillance_program)&oldid=595197410 (accessed February 5, 2014).

[iv] “Street View: Google given 35 days to delete wi-fi data”, from BBC News: Technology, June 21, 2013. http://www.bbc.co.uk/news/technology-23002166

[v] Feinberg, Ashley “Last Month's Massive Target Hack Was the Heating Guy's Fault” Gizmodo, February 5, 2014. http://gizmodo.com/last-months-massive-target-hack-was-the-heating-guys-1516926877

[vi] Munson, Lee “Half of Facebook-quitters leave over privacy concerns” NakedSecurity, September 18, 2013. http://nakedsecurity.sophos.com/2013/09/18/half-of-facebook-quitters-leave-over-privacy-concerns/

[vii] Solon, Olivia “How much data did Facebook have on one man? 1,200 pages of data in 57 categories” Wired.co.uk, December 28, 2012. http://www.wired.co.uk/magazine/archive/2012/12/start/privacy-versus-facebook

[viii] Submitted by demedia, “CDD Calls on FTC to Protect Privacy in today's Hyper-local, geo-targeting, cross-platform, Big Data Era/Warns of Discriminatory Practices with mobile device tracking”, Center for Digital Democracy, February 6, 2014. http://www.democraticmedia.org/cdd-calls-ftc-protect-privacy-todays-hyper-local-geo-targeting-cross-platform-big-data-erawarns-disc

[ix] Deasy, Dave “TRUSTe Study Reveals Increased Transparency and Privacy Controls Produce More Positive Feelings about OBA” TrustE Blog, September 19, 2013. https://www.truste.com/blog/2013/09/19/truste-study-reveals-increased-transparency-and-privacy-controls-produce-more-positive-feelings-about-oba/

[x] Fung, Brian “The Internet’s best hope for a Do Not Track standard is falling apart. Here’s why.” The Washington Post Online, The Switch, October 11, 2013. http://www.washingtonpost.com/blogs/the-switch/wp/2013/10/11/the-internets-best-hope-for-a-do-not-track-standard-is-falling-apart-heres-why/

Customers Behavior: Changing How Company’s Compete

 

“In virtually every industry, many former strategic alternatives are no longer viable or likely to be successful.” [1] 

  

 More and more companies are facing increasing levels of difficulty to perform financially.  In many circumstances the tools that gave companies a competitive advantage no longer work as effectively.  To stay relevant companies can no longer look backwards solely at their financial metrics when making decision. [2] Companies need to learn how to harness the power of data from their customer’s behavior. 

"...a new form of competition based on the extensive use of analytics, data, and fact-based decision making."                                           

                                                                                                         - Competing on Analytics [3]
  

         

Image taken from: http://econsultancy.com/us/blog/10288-companies-struggling-to-perform-attribution-and-online-offline-measurement

The company SAS® describes wonderfully on their website how utility companies can use customer analytics to make more informed decisions.  While the text below is taking from SAS's promotional information, it illustrates the concept of how companies need to be looking at the data from consumer behavior to add more value to the customer and the company:

Every Customer interaction is an opportunity to capture data and convert it into knowledge that can improve decision making.  With SAS, you can:

·    Create an accurate, single view of the customer by consolidating data from every source, using embedded data quality routines to correct, standardize and verify data, then transforming it into a complete picture of the entire customer relationship.

·      Use advanced analytic techniques to comply with regulator guidelines for energy efficiently efforts by discovering how different customer segments consume energy during peak or off-peak hours.  Effectively recover debt by gaining insights into the major factors that cause customers to pay late or not at all and adjusting billing strategies and plans accordingly.

·      Connect the right offers to the right customer segments by using automated campaign planning to pull more relevant, predictive lists, then pair that information with knowledge of the right opportunities so you can respond to customer needs or opportunities in the generation/transmission value chain.

·      Improve organizational decision making by using predictive analytics to model future customer behaviors, forecast growth in demand by various customer segments and optimize utility reactions based on past events. [

"...a new form of competition based on the extensive use of analytics, data, and fact-based decision making."                                           

                                                                                              

Image Courtesy of http://analyticsoc.com/humor/

 

Here are a some examples of how companies have started to use the data and statistic to change they way the compete and do business:

Image courtesy of Fathead.com

• Following the Oakland A’s use of analytics based off of players behaviors, the Red Sox’s started using data to shape their teams strategy, which is credited to have helped them win the 2004 World Series.

•  While the use of data is not new in baseball, the Red Sox’s used non-traditional data they had compiled about players behaviors to
  select their players.

•  Data is collected to measure the “fans experience.” How did they decided to attend a game, which route(s) did they take to get to the ballpark, how effective is the cleaning crew, etc.

• The data is used to help maximize the team’s revenue.  Ticket price elasticity is derived from the data and models were created to help add new seats in unused locations. [5]

Image courtesy of Fathead.com

•  The Patriots won 3 Super Bowl’s in 4 years, part of the success is due to their data analytical models.  The data helps the team on and off the field.

•  The analytics help the team select players, stay below the salary cap, and aids in the calling of plays based upon game variables and statistical outcomes.

•  Data is used to track and measure “the total fan experience.”  During home games, 20-25 employees are assigned to take quantitative measurements of the stadium food, parking, personnel, and bathroom cleanliness, etc.    

       

•  Data is collected and analyzed specific to external vendors.  The measurements are used to evaluate contracts and create incentives around performance.  [6]

Image courtesy of Wikipedia

• The American retailing company views new parents as customers who's  shopping habits are vulnerable to change.  Instead of waiting to send these new parents coupons after the birth announcement is made public (following the crowd of other companies that do this) Targets marketers wanted to figure out how they could send the coupons to pregnant women in their second trimester.

• Target assigns each customer their own “Guest ID number” that keeps track of everything they buy. [7]

• Using this data, Target was able to see patterns in customers purchasing behaviors and identify when someone might be pregnant.  Specifically, when women started to stock up on large amounts of scent-free soap and extra-big bags of cottons balls.

• Using 25 specific products, Target was able to assign the shopper a “pregnancy prediction score and even estimate the due date within a small time frame. [8]

To stay relevant, companies need to learn how to use the warehouse of data on consumer behaviors.  It is worth the cost.  For some companies the real challenge might the task of changing the companies culture to be data driven.
 

If you are interested in learning more about customer analytics check out this post: Customer Analytics: Incorporating Customers “Secret” Behaviors in the Company’s Strategy.   

To learn more about what the data should look like, check out Whartons' Customer Analytics Initiative.

 

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1.     Davenport, Thomas H., Cohen, Don, and Jacobson, AL.  “  Competing on Analytics.”  Babson Executive Education, May 2005

2.     Davenport, Thomas H., Cohen, Don, and Jacobson, AL.  “  Competing on Analytics.”  Babson Executive Education, May 2005

3.     Davenport, Thomas H., Cohen, Don, and Jacobson, AL.  “  Competing on Analytics.”  Babson Executive Education, May 2005

4.     http://www.sas.com/industry/utilities/customer-analytics/index.html

5.     Davenport, Thomas H., Cohen, Don, and Jacobson, AL.  “  Competing on Analytics.”  Babson Executive Education, May 2005

6.     Davenport, Thomas H., Cohen, Don, and Jacobson, AL.  “  Competing on Analytics.”  Babson Executive Education, May 2005

7.     Duhigg, Charles.  “How Companies Learn Your Secrets.”  The New Tork Times.  February 16, 2012.

8.     Hill, Kashmir.  “How Target Figured Out a Teen Girl Was Pregnant before Her Father Did.”  Forbes.com 2/16/2012

Customer Analytics: Incorporating Customers “Secret” Behaviors in the Company’s Strategy

Customer Analytics:  the collection, management, analysis and strategic leverage of a firm’s granular data about the behavior(s) of its customers.[1]

The idea of using analytics to gain a competitive advantage is not a new idea.  Businesses have used analytics to influence their companies’ strategy long before now.  What is new is how the analytics are being used by companies and how the use of analytics is spreading across a wide variety of industries.  Companies are using the data about human behavior to re-work their supply chain, sales theory, and marketing campaigns, reduce customer churn, attract new “lifetime” customers, reward customer’s loyalty, and the list of possibilities goes on and on.  Even sports teams have been able to use behavior analytics to increase tickets sells, improve stadium parking, stadium food, acquire better players and reduce player injuries.

“Analytical cultures and processes are appearing not only in professional sports teams, but in any business that can harness extensive data, complex statistical processing, and fact-based decision making.”[2]  

Photo Courtesy of http://chainbigdata.eventbrite.com/[6

I have not been able to find a manual on how to use the gathered data, it appears to be an art that each company can perfect, but here is a list of what the raw data should look like:

·         Inherently Granular:  must be individual-like

·         Forward-looking:  orientation towards prediction not just description

·         Multi-platform:  combining behaviors from multiple measurement systems, but with best efforts to do so at the individual level

·         Broadly applicable (and industry agnostic): consumers, donors, physicians, clients, brokers, etc.

·         Multidisciplinary:  marketing, statistics, computer science, information systems, operations research, etc.

·         Rapidly emerging:  traditionally viewed as just one form of “business analytics,” but starting to take on its own unique identity as a “standalone” area of analysis and decision making

·         Behavioral:  many firms’ customers analytics problems incorporate descriptors such as demographics and attitudes; but, the customer analytics primary focus is on observed behavioral patters

·         Longitudinal:  it’s ALL about how these behaviors manifest themselves over time

Courtesy of Wharton Customer Analytics Initiative

The use of customer’s analytics has enormous potential to positively affect companies ROI.  An interesting read is how Target is able to predict if its customers are pregnant.[3]  The use of these analytical techniques Target credits with its growth in revenue- $67 billion in 2010 compared to $44billion in 2002.[4] 

How the data is used also has the potential to level the playing field;

“We have the seventh-largest revenue stream in terms of ticket sales of all 30 teams and we’re the 20^th largest market in the NBA.  It’s because we can take data and analyze if so effectively.[5]”           – Alex Martins, CEO, Orlando Magic

The challenge from companies is to figure out how to use the collected data in the most productive way, without violating the customer’s privacy or by creeping customers out.

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[1] Htto://www.whartons.upenn.edu/wcai  Accessed on 1/15/2013

[2] Davneport, Thomas H., Cohen, Don, and Jacobson, AL.  “Competing on Analytics.”  Babson Executive Education. May 2005

[3] Duhigg, Charles.  “How Companies Learn Your Secrets.”  The New York Times, February 16,2012.  Nytimes.com Accessed on 1/15/2013.

[4] Hill, Kashmir.  “How Target Figured Out a Teen Girl Was Pregnant before Her Father Did.”  Forbes.com 2/16/2012

[5] www.sas.com.software/customer-intelligence
[6]  http://chainbigdata.eventbrite.com/