Targeted Advertisement

Targeted advertisement through data mining and privacy issue. Introduction A computer user sits in front of a screen and starts browsing their favourite website while their child similarly does the same. While this peaceful pastime activity is being enjoyed, however, they are unaware of the hidden pathways through which every detail about them is being disclosed. Because of these pathways, there are people that can get hold of the users’ names, phone numbers, IP addresses of the computers and their households.They have access to information about any users’ income, medical history, gender and age, not to mention what they searched on search-engines and which websites the users visited. They can even learn which online shopping purchases were performed by the users on any recent website. They, who know every detail of users, are not the Big Brothers of â€Å"1984† nor are they hackers; they are online advertisers who deliver advertisement on the Internet. The comp uter user is vulnerable to online advertising companies that value that specific personal data.The focus of this paper is to convince advertising companies that they should enforce regulation by providing an opt-out mechanism and practice permission based data mining in order to protect consumer’s privacy. Moreover, notifying and protecting users before distributing and taking advantage of their personal information is significant to company’s accountability and furthermore allow establishing a long term relationship with customers. I will explore the issue from consumer and also an advertiser’s perspective. As a design student who has been designed companies’ logos, it is significant to gain valuable insight from this topic.By gaining the necessary information in this issue, I can navigate the internet in a more safe and secure manner as a consumer. Background of Data Mining Online advertising is a growing industry that is based upon the traffic from onl ine views. â€Å"Fifty-six of the top hundred websites based on page views in February 2008 presented advertising† (Evan, 2009, p37). For every activity a consumer performs on the internet such as making a purchase, visiting a website or searching on search engines is collected (Charters, 2002).This information is processed and stored automatically through data mining practices and becomes a significant source of revenue for online advertisers without the granted permission or any notification to the customer. Data mining is an â€Å"overall process of preparing data, discovering patterns in data, and analyzing that data into useful knowledge† (Tavani, 1999, p137). According to Murphy, â€Å"the right to privacy involves the ability of individuals to decide for themselves, how much they are willing to share about their lives, thoughts, and feelings† (Murphy et al. , 2009).As personal and behavioural data are collected, stored and sold for more effective advertis ement, â€Å"loss of control† and â€Å"loss of identity† become issues (Drumwright et al. , 2009). Moreover, all the information we expect to be remained confidential, such as health insurance numbers and medical records, also become commodities for sale. Internet users have been paying for the â€Å"free† online services with their private and personal information (Goldfarb et al. , 2011). Effects of Data Mining Firstly, data mining is based on the Internet and affects the uninformed users by the loss of control over their personal information and right to privacy.Individuals are unaware that the data about them are collected and that they â€Å"have no say in how the information about them is used† (Tavani, 1999, p141). For example, search-engine providers summarize and store the entire search history categorically that â€Å"enables them to identify the individual IP address† (Evans, 2008, p55). While there is no warning to the consumers prior to collection and storage of their data, users are unaware of the fact that data mining is being conducted every time they click something on the websites.Although, Google has reduced the storing data period from two years to nine months (BBC News, 2008), the sale of data collection to online advertisers is still in progress. The transaction of information causes the loss of control over their right to privacy. Moreover, advertisers have an access to the â€Å"cookies†, which track the websites visited and every activity an individual does on the internet. Again, this becomes a privacy issue as advertising companies’ access this information without any granted permission. The privacy issue associates with the unawareness of this invisible phenomenon of data mining.Granting more control over their personal information to the users is critical. Thus, the usage of data mining without the consent of the user is an invasion of privacy. The user needs to have more authority over their information and prevent unwanted usage of their personal information. Secondly, data mining is more than just a personal and behavioural analysis. Every time the Internet client provides private information, such as medical records, all the information is being collected and saved (Buchholz & Rosenthal, 2002).The information we expect to remain confidential and anonymous becomes a source of profit to advertisers. There is a difference of scale between revealing one’s favourite color and revealing one’s social insurance number to the advertisers. For example, Google Gmail, which provides 7GB of free space, scans and records the content of emails while displaying targeted advertisements on the side that result from Google’s ability to examine the content of the emails (Evans, 2008). The vast amount of the provided space was not really â€Å"free† and users been paying it with their private information.Revealing personally identifiable data or pri vate information such as social insurance number through these services has potential risk of misuse. Consumers may concern more if they know â€Å"search engine provider is selling the data to another vendor that has figured out a way to associate the user’s IP with other personal information including name, address, and telephone number† (Evans, 2008, p57). Google’s company’s goal is to â€Å"organize the world’s information and make it universally accessible and useful†(Google, 2011).Yet, our information also counts toward world’s information. We should be concerned if these companies with these types of mission statements can protect the users’ privacy; users should not be blindsided to the potential risks of misuse of our private information. Targeted Advertising and Consumer Relationships Regardless of the privacy concern associated with data mining and targeted advertisement, the reason why online advertising is still on the rise and is central to the e-commerce economy is because of its effectiveness on consumers (U.S. Department of Commerce, 2008). Detailed individual data can create more efficient advertisements, compared to traditional newspaper advertisements or old banners on the websites. For example, European Union practices privacy regulation on advertisers. The responses of â€Å"3. 3 million survey takers who had been randomly exposed to 9,596 online display banner advertising campaigns,† reveal that this government restriction reduces the effectiveness of advertising by 65% on average (Figure 1. ) in terms of changing stated purchasing intent (Goldfarb et al. , 2011), Therefore, regulation means a â€Å"trade-off between the benefits of consumer privacy and the benefits to consumers of a potentially broader, less obtrusive advertising-supported Internet† (Goldfarb et al. , 2011, p50). In addition, advertisers argue that â€Å"unauthorized secondary use of data† is f ound to be insignificant and consumers are used to this way of business in terms of traditional forms of advertising (Brown & Muchira, 2004).Although targeted advertising is an effective way to advertise to consumers, reflecting too much knowledge about consumers in their advertisements may offend the users (Evan, 2009). Often, the users may use internet to search or purchase what they do not wish to share or talk about with others. Online advertisements may do what is opposite of this wish. For instance, purchasing a self-help book online to treat depression does not mean you wish to sign up for an advertisement that shows lists of other books about depression.Moreover, since computers are shared online with other users, this purchase may be unintentionally revealed to the public. Advertisers should be advised of the precautions of data mining, which tracks every piece of information about consumers for effective and smart advertisement, could drive potential consumers away instead . Targeted advertisements are only effective if they respect the consumer’s privacy and use their information only when users are aware of the situation and give their permission. The foundation of strong relationships with consumers requires trust of both the website and usage of personal information.Lack of trust leads to privacy concerns and the users unaware what websites are legitimate. Resolving such privacy dilemma is, therefore, crucial to â€Å"creating stable and ultimately profitable customer relationships† (Brown & Muchira, 2004). The major factor that can weaken the relationship is â€Å"invasion† of the privacy (Attaran, 2000). It involves â€Å"contacting consumers who have not requested such contact and is often done repeatedly† (Brown & Muchira, 2004). Also, receiving unwanted junk mail and promotions from advertisers could irritate consumers (Korgaonkar & Wolin, 1999).The result of a survey that Brown and Muchira conducted indicates that consumers who have experienced online invasion of privacy are less likely to purchase products via the Internet. In other words, the ability to handle personal information is significant to advertisers to maintain a strong relationship with consumers. Advertisers should view the protecting privacy as an opportunity to establish long term relationships with consumers. Conclusion Government regulation is practiced in some European countries to resolve the privacy issues in online advertising.Nevertheless, government regulations that may be proposed to protect right to privacy, may end up violating â€Å"the principle of respect for individual† and create another invasion of privacy (Charters, 2002). Instead of government intervention to deal with privacy issue, online advertising companies should enforce regulation by providing opt-out mechanisms, and practice permission based data mining in order to protect consumer’s privacy. Advertising businesses need to store and s ell consumer’s private information with their permission of consent and a notification.Consumers may agree with giving their information about them if they can trust whom they are providing it to. That way, advertisers do not lose the opportunity to provide targeted advertisement to consumers, which is much more effective than providing non-targeted ones. Consumers also will benefit from receiving relevant advertisements against the cost of losing privacy. The balance between advertisers and consumers can be achieved through permission based practice. The computer user sits in front of a computer and starts browsing again.This time, the website asks for permission to collect the user’s information for online marketing and advertising business. The user has the ability to opt-out, and considers that this website is indeed secure. This website creates a transparency between by the Advertising contacts and the consumers. The user is informed, given options, and protected. Figure 1. 1 – Before and after the regulation by EU References Attaran, M. (2000), â€Å"Managing Legal Liability of the Net: a Ten Step Guide for IT Managers†, Information Management and Computer Security, 8(2)2.Brown, M. & Muchira, R. (2004). Investigating the Relationship between Internet Privacy Concerns and Online Purchase Behavior. Journal of Electronic Commerce Research 5(1),62- 71 Buchholz A. , and Rosenthal B. S. (2002), Internet Privacy: Individual Rights and the Common Good. SAM Advanced Management Journal, 67 (Winter), 34–40. Charters, D. (2002). Electronic Monitoring and Privacy Issues in Business-Marketing: The Ethics of the DoubleClick Experience. Journal of Business Ethics, 35 (February), 243– 254. Drumwright, E. M. , Murphy, P. E. , (2009).The current state of advertising ethics: industry and academic perspectives. Journal of Advertising. 38(1), 83-108 Evans, S. D. (2009). 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