How many of you have one of those customer loyalty cards that are prevalent these days? Back in Hawaii, Foodland provided shoppers with discounts for “free” through a “Maika’i Card.” Here in California there’s a similar program with Albertson’s. I put the word “free” in quotations because the discount really isn’t free. We are selling our data and behavior. In the Age of Information, it’s become easier and easier through technology for companies to keep track of a customer’s behaviors and make meaningful conclusions out of it. Prior to relatively cheap technology, it was simply unfeasible for a company to sift through the large amounts of data (or even collect it).

Target has a similar program although they don’t use a card like Foodland and Albertson’s. Andrew Pole, a statistician at Target, says Target uses a Guest ID system – “If you use a credit card or a coupon, or fill out a survey, or mail in a refund, or call the customer help line, or open an e-mail we’ve sent you or visit our Web site, we’ll record it and link it to your Guest ID.” Target uses this data to better target (hah!) coupons to their customers. Just a couple months ago, some of you probably read an article about just how accurate Target really is. Target’s algorithm predicted a teenage girl was pregnant and mailed coupons for baby items to the home. The girl’s father, of course, did not know the girl was pregnant and was furious with Target for encouraging teen pregnancy. A manager at Target apologized at the time (hey, the customer is always right, right?) but it was the father who was in the wrong as his daughter was in fact pregnant. You can read more about Target and this incident here.

Google and Privacy

It’s not just retail stores that are collecting data from us. Probably the biggest company doing this unbeknownst to many is Google with Q1 2012 revenues of $10.65 billion. Much of Google’s revenue is generated through online targeted advertisement. Based on a user’s keyword searches, Google can tailor-fit ads to the user. However, Google doesn’t stop with its search engine. Google uses Gmail, YouTube, Maps, Chrome, Google Plus, and other set pieces of their platform to construct a better picture of a user. Ever wondered about those advertisements in Gmail? A machine scans your e-mails and ads are generated based on keywords found in them! Let me tell you, I have A LOT of ads about MBA programs (and probably will continue to for years to come). The services Google’s platform provide are “free” but we, as users, are providing Google with something even more valuable: our behavior and online identity.

Back in March, a new privacy policy (read more here) unified all of Google’s services and allowed the sharing of data on a single user across the entire platform. Privacy is a HUGE issue here. Most people, especially the older generations, are not comfortable sharing information because it’s hard to know what companies are doing with it. Yes, everything is actually laid out in the Terms and Agreements provided to new users when signing up for, say, Gmail. But who reads that lengthy document anyway, right? Not to mention the verbiage in these windows are often left vague. None the less, there’s a certain unsettling feeling when one thinks about  a single company knowing what websites we go to or about the e-mails we sent complaining about work. Remember, the internet has a long memory and is unbiased.

My Thoughts on Privacy

Personally, as a member of Generation Y, I am not overly concerned about “sharing” myself and my behavior with Google or other companies with their loyalty cards. Getting ads and coupons that better match me – that have a higher chance of being of use to me – is a good thing, right? My problem is actually the unbiased nature of it all, which is especially true with Google and the next company I want to talk about: Amazon.com.

Amazon, much like Google and retailers, tracks a user’s search history and purchases and then provides suggestions based on the data it collects. This is not unlike Target with its targeted coupons or other websites that have a “You may also like…” or “Other customers also viewed/purchased…” The problem I have, as mentioned earlier, is how unbiased this data collection is. It has to be to maintain its seamless in the background status. However, and I’m sure most of us have experienced something similar, what happens when a friend comes over and wants to use your computer? He (or she, but I’ll be sticking with he) searches Amazon or Google for items or topics HE is interested in. Of course, Amazon and Google have no idea that it’s your friend and not you, but it logs the search as if it was. It is unbiased. Here are a few examples of things that could happen that wouldn’t be an accurate reflection of an individual:

1. Friend uses your computer to search;

2. Buying a gift for a friend off Amazon;

3. Group purchases will have items that aren’t specifically for you;

4. You’re doing research on a particular topic to help a friend or family member.

All of the above are pretty harmless and innocent. However, let’s take it one step further: What if the research is on a questionable topic? “How to build a bomb?” “How to make meth out of over the counter drugs?” Or how about a novelist looking up exact details on how murders happened? Most of us probably heard about the Casey Anthony case where part of the defense over the Google search phrases “neck breaking” and “how to make chloroform” were brought into question by saying Casey’s parents also had access to the same computer.

Sure, frequency most certainly plays a part in searches, but that is certainly not true for Amazon. I still get a number of e-mails because of one-time gifts I purchased for friends and family.

Closing

There’s no denying that more and more of who we are are being collected by companies in this Age of Information. Analytics can then be used on the data to customize ads, coupons, search results and more based on past behavior. The idea is that past behavior can predict future behavior. However, that just isn’t the case all the time. We, as humans, are constantly evolving and maturing – learning. We are a sum of experiences. Privacy and how this information is used are concerns going forward. Further, the data collection process is unbiased and can include anomalies. The information gathered and the ASSUMPTIONS created by the data collection can be dangerous and/or wrong.

Moving forward, it’ll be important for everyone to understand what is being collected and how it will be used. Companies also need to be clearer about how the information will be used. Can they sell the data to another party? More importantly, how can customers delete the data collected by companies? There are many questions that need answers to and a number of business practices and laws that need to be clearly defined. The idea of data collection and analytics at the scale seen today is relatively new and, as such, will take time to clarify. Companies are still in the process of discovering exactly how much they can push and pull before consumers bring up privacy concerns and other entities such as governments step in. In the end, it will take time… but, while we are waiting, ask yourself: what information am I comfortable sharing and what implications may exist?