Navigating the minefield of online privacy laws

Malcolm Duckett, CEO of Magiq, considers how best to observe online privacy rules.

For too long, confusion has shrouded the online privacy laws. Consumers are concerned about the risks of behavioural advertising and online behavioural tracking and unclear of any potential benefits, with a number of unscrupulous online practitioners fuelling this worry.

There are two important aspects of online privacy that businesses should be aware of when collecting and using data from site visitors. As a result of legislation such as the Data Protection Act, there are heavy fines for using data irresponsibly.

But more importantly, another major consequence is the potential risk or damage to a brand’s reputation if they are shown to be misusing visitors’ trust and data.

Targeting of content based on behaviour is either done for the benefit of the user (to improve their experience), or for the site (to generate advertising revenue). These two motivations result in very different solutions with very different implications for the user.

For the purpose of this article we have called content presented to improve the visitor experience as “Behavioural Targeting” and content designed to generate advertising revenue as “Behavioural Advertising.”

As businesses attempt to navigate through the online privacy minefield, they need to be very aware of the risks of data misuse while recognising the benefits that can accrue if it is done well.

The online advertising industry is still relatively young and definitions of behavioural data concepts are not fully matured. There needs to be more education into the difference between behavioural advertising and behavioural targeting so that consumers feel secure when visiting a site.

Some approaches of behavioural advertising involve the collection and processing of information from a user’s complete online history across many sites. This data is then used to advertise to each individual based on their broad web activities over many sites.

This compiling of cross-site information is where most of the nervousness regarding online targeting originates. There is implied sharing of data between the sites, which is very “unexpected”. People generally do not want potentially sensitive data to be shared and used for advertising purposes.

For example, most of us would feel uncomfortable if we found someone trailing us on a high street shopping trip and compiling details of all the shops we entered and products we viewed – especially if we didn’t know how the resulting data was to be used.

Behavioural targeting, on the other hand, applies to the browsing behaviour of the user on just one site, in order for the site owner to understand the most relevant content to present to individual users based on their behaviour and preferences over time.

An example of this is when you visit Amazon and it suggests a book you may be interested in based upon past purchases on the site.

Behavioural targeting means that website owners can build trust with visitors and re-capture the “village store” relationship with their customers. So when a regular customer visits looking for a particular product, the store owner can make a specific offer using his knowledge of their previous preferences and current requirement.

They might also point out that something they were looking for previously is now back in stock, or send an offer. This building of profiles of customers may only initially include anonymous data, but as the visitor gains trust in the brand or site, and volunteers more information, these profiles become richer and more personalised allowing the site to present the visitor with new, more relevant, targeted content and messages that will further improve the visitors’ experience of the brand.

The key difference between the two concepts is that behavioural targeting is based on a one-to-one relationship between the site owner and the visitor, respecting the visitor’s privacy; whereas behavioural advertising includes a cross-site tracking concept which is the source of the consumer disquiet and concern.

Any organisation using behavioural data needs to abide by four key concepts; make it clear what data you are collecting; explain what you intend to do with the collected data; ensure that you look after any personal data (keep it secure); and give the users the option to opt-out of any data collection or targeting.

The above disclosures and opt-out are typically provided by well written site privacy policies, and the more mature data capture solutions also allow users to understand and control the data being captured via the privacy reports provided by most modern browsers.

It is clear that with well executed behavioural targeting campaigns that are respectful of users privacy the digital agency and site owner can deliver an improved experience for their visitors, but that due care needs to be taken in the selection of technology and the design of targeting programs to ensure the brand is protected and gains an enhanced reputation for trustworthiness and relevance.

The technology exists for both large corporations and SMEs to be able to implement these types of program. Online businesses that are open with how their data is used can use these technologies to provide effective relevant, personalised content to each user without having to worry about the repercussions of online privacy laws.

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