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This article offers a brief overview of the relationship between privacy and marketing.

Discussion

The rise of internet usage has led to greater opportunities than ever for advertising companies to target consumers with advertising of greater relevance to individual consumer interests than ever before. Many firms that supply internet advertising or marketing services track internet usage across member websites through methods including, but not limited to cross site tracking cookies, IP logging, and web beacons which use information providing the advertising provider with a unique identifier for individual users which they may use to monitor browsing habits of users across multiple websites in order to develop profiles which may be developed on users in order to draw conclusions on the interests of internet users.

The effect of these technologies that track internet usage in order better target advertisements to individual users is a higher click through rate which generally translates into a higher rate of return on investment for entities submitting their advertisements to consumers through advertisement targeting services, and it tends to increase revenues for content providers hosting targeted advertisements due to an increased profitability for firms advertising their products or services.

The imposition of a new privacy policy which would prohibit the tracking of an individual’s internet usage by companies without the explicit permission of the user through an opt-in system would severely restrict the market for targeted advertisement services and it would have the primary effect of restricting the overall effectiveness of internet advertisement targeting by restricting the pool of data available to marketers for analysis of consumer behavior. In addition to the primary effect, the new privacy policy would have several other effects on consumers, businesses, and the United States economy as a whole.

Two primary effects for consumers would be increase in privacy along with a corresponding decrease in quality of service from advertising service providers. A likely effect would be an increase in advertisements encountered by consumers as they explore the web in an effort from advertisers to still provide consumers with content relevant to their interests. A potential increase in advertisements encountered may range from a small and barely noticeable increase to a substantial increase constituting a major annoyance for internet users.

Businesses conducting e-commerce operations would be seriously affected by the restrictions on monitoring online consumer behavior. The major advertising and consumer research firms currently employing these technologies would suffer almost immediately from a tremendous loss their audience which would immediately hit their return on their sometimes substantial investments to develop these web tracking technologies. It would also seem to promote a shift to context based advertising similar Google Adwords which targets ads tailored to the individual web pages hosting the ads rather than relying on a detailed analysis of the individual’s aggregate online behaviors. Additionally though businesses creating content which are supported by advertising revenues may suffer as a result of not having the efficient revenue structures in place as they were able to enjoy before with behavior targeted advertisements.

The primary general effect on the US economy as a whole would be a devaluation of the internet marketing industry as a whole while discouraging future innovations into fields related to the individualization of web experiences for unique individual users. The national privacy policy could also fail to prevent foreign companies from collection dossiers on internet users in the United States which would have an especially negative effect for the computer security sector in the United States if the computer security companies in the United States were prevented from tracking internet usage.

Computer crime and security industries in the United States would also suffer. Victims of botnets, large collections of computer compromised to perform illegal tasks without the consent of the computer owner may be unable to seek help from computer security products or services to prevent their systems from being compromised or may not be notified if their systems are compromised due to the inability of internet security firms to notify individual computer owners of their predicaments unless the computer owner ad already opted in to have their internet traffic monitored. Overall the effect of the national privacy policy would be mostly negative with the exception of the increase of individual privacy for individuals to the extend that those individuals do not choose to surrender their internet privacy through even more intrusive terms of service, with those failing to opt in suffering in quality of experience from many web services out of fear for surrendering their rights.


Internet | Marketing


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