INTRODUCTION ............................................................................................................................................................ 2
DOUBLECLICK.COM .................................................................................................................................................... 2
COMBINING OFFLINE AND ONLINE DATA ......................................................................................................................... 2
THE INFORMATION ALLIANCE ......................................................................................................................................... 2
FUTURE STRATEGIES ...................................................................................................................................................... 3
AMAZON.COM ............................................................................................................................................................... 3
CUSTOMER INFORMATION AS AN BUSINESS ASSET......................................................................................................... 3
PERSONALIZATION.......................................................................................................................................................... 3
ECUSTOMERS.COM...................................................................................................................................................... 3
PERSONALIZATION (HOW IT WORKS) .................................................................................................................. 4
WHAT COULD BE DONE DIFFERENTLY? .............................................................................................................. 4
AN ALTERNATIVE TO DOUBLECLICK ............................................................................................................................. 4
HOW MIGHT THE INTERNET INFLUENCE THE CASE IN THE FUTURE? ................................................................................ 4
THE CURRENT STATUS OF THE COMPANIES ..................................................................................................................... 5
QUESTIONS ..................................................................................................................................................................... 5
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Introduction
The idea of the first internet, the ARPANET, was to create an open community where all
developments, ideas and research could be shared. There were no concerns about privacy in the
beginning, but with the increasing commercial interests of today’s internet, have raised the debate
about privacy and security online. The increasing personalization provided the customers with
advertisements which were directly targeted each user. The ads were suited to match the users past
surfing habits. The users didn’t have any knowledge about how their data and surfing history were
tracked and used by the companies.
DoubleClick.com
DoubleClick is a company that develops tools for advertisers and web publishers, which can help
them plan, execute and analyze marketing programs. DoubleClick helps companies track and trace
potential customers and target the banner-ads towards them. When a customer responds to a bannerad, information about their operating system and browser-type is also send to DoubleClick. If the
user chooses not to respond to the banner-ad, this information is also send to DoubleClick and the
companies they cooperate with. In 1999 DoubleClick had two different strategies to target
advertisement:
Combining offline and online data
In June 1999, DoubleClick announced that it would buy another company, Abacus Inc., who was
the owner of a database containing information, such as names and addresses, on 88 million
American households. The database also included information about 2 billion purchases through
catalogue retailers. DoubleClick intended to combine offline and online user information for
marketing campaigns, but because of heavy objections from the public, they chose not to use the
information.
The information alliance
In November 1999, DoubleClick announced the creation of an “information alliance”, were
businesses could share customer data in a large digital “pool”. Once a user had given information to
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any alliance member, other companies in the alliance would be able access the same data, and
associate user names with cookies at all other alliance-members’ sites.
Future Strategies
DoubleClick realized that they had to educate the users to minimize any confusion about how
DoubleClick use user data. In 2000 DoubleClick abandoned their plans to merge offline and online
data, but after the break dot.com-bubble in 2001, DoubleClick reconsidered their strategy on
combining offline and offline data. They this time the anonymity and protection of the users were
an important issue for DoubleClick.
Amazon.com
Amazon founded in 1994 is now one of the largest online retailers. They offer millions of products
in all categories, including books, electronics, toys, music, movies etc.
Customer Information as an Business Asset
In august 2000, Amazon changed its privacy policy. In their old privacy policy they promised not to
sell or trade personally-identifying data in ant way. Amazon’s new privacy policy classifies
customer data as a business asset, which could be transferred if any of Amazons businesses were
sold. Amazon also reserves the right to share customer date with its business partners. This was a
change that many of Amazon’s old customers objected against, because they had given personal
information to Amazon based on the old privacy policy.
Personalization
Personalization is an important feature for Amazon, and it is one of the things Amazon is best
known for. Every time a user visits Amazon.com they are welcomed by a personal greeting and
customized offerings that are suited according to the users preferences. Amazon needs the personal
information in order to be able to provide this service for the customers. Amazon wants the rights to
use these data as they please, and they consider these data as a very important business asset.
eCustomers.com
eCustomer, Inc. was a provider of e-business personalization solution. eCustomers strategy was that
consumer trust drove merchant success on the internet as well as in the real world. Their motto was
“customer relationships with respect”. eCustomers were the developers of a personalisation
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platform that gave consumers control of the data, which merchants used to personalize their
websites. The consumers had the option of selecting the amount of personal data they wanted to
reveal.
Personalization (how it works)
Here is an explanation of how personalisation works if you buy a product at Amazon.com:
1) If you have enabled your browser to accept cookies, a cookie will be stored on your
computers hard drive. If there is already a cookie installed on your computer, it will allow
Amazon to recognise your browser and enable the welcome-massage and features such OneClick-Purchasing, storage of items in the shopping chart between visits, special offers
targeted directly at you etc. Without enabling cookies in your browser-setup, you would not
be able to benefit from these features.
2) Before buying a product at Amazon.com you have to register with personal information
such as name, address etc.
3) When you register with Amazon you also give permission either by opt-in or opt-out to
receive newsletters and Christmas offers, or to let Amazon use your information for
analysis, statistics etc.
With personalization you don’t have to register every time you visit Amazon. If you delete your
cookies, you have to go through the registration process the next time you wish to buy a product at
Amazon.
What could be done differently?
An Alternative to DoubleClick
An alternative solution to DoubleClick’s targeted advertising is Google AdSense. Google AdSense
is an opportunity for companies to implement targeted ads on their website. The content of the ads
are related to the content of the website, but not based on personal user-data. All the ads are text
based and therefore less disturbing than regular banner-ads.
How might the Internet influence the case in the future?
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The current status of the companies
DoubleClick
DoubleClick’s current privacy policy contains much more information about how the technical
aspects work and how people can disable cookies. They have become more aware of the users
rights to privacy and how important it is for a business to have trust among the consumers.
DoubleClick’s 2004 privacy policy says the following: “No personal information is used by
DoubleClick to deliver Internet ads”. They have learned from the mistakes they did in the past.
Amazon
Amazon still claims the right to trade customer data and they see user information as a business
asset of great value. Amazon continues to grow and they have the trust of millions of users around
the world. The reason for Amazon’s good reputation is because of the strong Amazon brand and
that the convenient consumer doesn’t read the privacy policy and they feel confident in using the
Amazon store. Amazon doesn’t have to change their privacy policy because of reasons mentioned
above and because of their dominating status and size in the business. Because Amazon is five
times bigger than their largest competitor, they can more or less set the standard for privacy
policies.
eCustomers
eCustomers does not exist anymore.
Questions
What do consumers mean when they say that they are concerned with privacy?
Most consumers are concerned with privacy issues because they dislike the feeling of being under
surveillance. Consumers don’t like personal information such as name, address, e-mail, behavior
and habits to fall into the hands of third parties, who might use that information without their
knowledge. People suddenly receive spam-mails and special offers without being asked, because
third parties somehow have got their e-mail address.
How could DoubleClick minimize the risk of merging offline and online data?
The will be minimized if the consumers are well informed about the merger, and if they have the
possibility of removing their data from the database. Submitting information to the database should
be constructed as opt-in and not opt-out.
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What is your reaction to Amazon’s change in privacy policy?
A sudden change in a company’s privacy policy will result in a lack of trust on that company. If
they suddenly change the way they handle personal data, what will they change next? We think that
the short term impact in Amazon’s policy change would be objections from the consumers, but
because of the strong Amazon brand and their generally satisfied customers, it would probably not
have any serious long term impact.
Can you compete on privacy?
Private personal information is a serious matter, and if merchants don’t handle it with care, they will
not be popular among consumers. We think that a privacy policy that are trustworthy and easy to
understand for consumers will always be a positive asset for any business.
How should eCustomers communicate their value proposition to merchants and consumers?
If eCustomers inform the consumers of the risks regarding giving personal information to
merchants, they will prefer to do business with merchants who have a reasonable privacy policy.
This will eventually force the merchants to write privacy policies that actually respect the personal
information submitted by the consumers.
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