Monday, August 02, 2010

The Web’s New Gold Mine: Personalizing Your Online Experience

Past weekend, WSJ published a story titled Web’s New Gold Mine: Your Secrets on online tracking and advertising (behavioral targeting). It appears to me that the author of this article is either confused between malware and cookies is or she is just doing what she is supposed to do to sell the story i.e. using words that instill fear in people.

The article projects any tracking, business and advertisers do to serve relevant ads or personalize the users experience on web, as malicious. Businesses have been trying to understand consumer preferences and then make personalized recommendations ever since the humans existed. We do it offline all the time. So how is online tracking for the same purpose malicious?

My dad used to run his clothing store in India, way before internet existed. He used to gather all the information (in his brain) about consumers browsing and purchase behavior to make personalized recommendation to existing customers and new customers. He used all that information to determine what products, colors, sizes, quantities etc. to stock. He knew almost all of the existing customers by their name and what they preferred. Was that spying? Nope. Customer loved it.

If someone can understand me and provide me exactly what I want then why won’t I like it? If they miss the mark well then I have a choice of not paying attention to them.

Do you know that Visa, MasterCard and American express have more information about you than any cookie or advertising company has? Your super market collects your information and tries to guess about what you might buy next. Have you ever got a coupon from an automated coupon dispenser when you check out from your local super market? Well do you know that it is based on your current and past purchases, you zip code etc? Do you ever worry about that or happily walk away with the coupon? Why is the fuss about online tracking for the same purpose? Don’t you love personalized recommendations from Netflix or Amazon?

In my opinion advertisers/publishers/network should invest in consumer education and make tracking and targeting more transparent and articles like this should help with the education instead of branding all tracking as bad.



  1. Interesting thoughts and i think the online business face a major challenge to copy the insights and actions of the offline world as in your examples. However, is it fare to compare it with the third party tracking mentioned in the article. I think a lot of people enjoy recommendations they have opt in for, and that the site doesn't share your info with anybody willing to pay for it. But not knowing that your browsing on one site may lead to certain ads on other sites is à different story to me. I have just skimmed wsj and may have misunderstood the discussion...

  2. Good point,
    and I think we all as consumers enjoy the benefits (most of the time) of these tracking practices, however the difference between brick and mortar stores and web based shopping is that in the first you realize that you're making public what you do, but in the second you weren't necessarily planning on anyone "watching" you. So the issue is not so much what is or isn't being tracked it's the lack of disclosure of that fact. Consumers will always be wary of web "spying" unless it's presented to them up front and the purpose behind it explained (as you have effectively done in this post)... it's all about educating consumers ultimately.

  3. Anonymous6:54 PM

    I think transparency is key, so we as consumers are aware that our behavior is being tracked. The difference between brick and mortar is that we as individuals are being directly associated with certain behaviors rather than being grouped in a generalized group. I recently found a man looking through my trash to see if I missed any recyclables and while I knew it was harmless, it still wigged me out. Tracking online is the same sort of thing, going through people's trash (even though I love the idea of how much data is available on the business side). Plus, how many times do you look things up for friends or loved ones that have no interest for you? No matter how scientific we get, no software is going to be able to track us exactly

  4. Although I do dislike over-the-top headlines ("spying") I would say that the WSJ article was pretty factual. I think they really did make a distinction between first party (OK) and third party cookies (not OK), especially in the accompanying video.

    Your dad's store example is a perfect analogy of a first-party cookie, where he tries to know a little bit more about his customers' preference and deliver a better experience to his customers.

    But analogous to a 3rd party cookie, why should the store down the road be allowed to know that the same person has been to your dad's store?

  5. Great comment Anil. One of the recurring argument is "they do worse than us" when comparing several things:
    - ad networks using 3rd party data,
    - unethical and sometimes illegal collection of personally identifiable information,
    - ethical and appropriate use of web analytics
    - offline world
    - credit cars & any type of membership cards
    - etc.

    Imagine a thief saying to the judge "yeah, but he stole more than I did". So our issue, the web analytics industry issue, is really about education, good practices, full disclosure and even independent auditing and accreditation of "good standing" - something the Web Analytics Association would be very well positioned to offer.

  6. @Robert, @Michael, you are right. My biggest issue was with comparing all tracking to spying.

    @emily, yes it comes down to education and transparency. Which is missing and causing confusion and concern. WSJ could have showed how it helps consumers and not all tracking is spying.

    WSJ has been using 3rd party cookies for a very long time.


I would like to hear your comments and questions.