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Esther Dyson: Privacy Is a Marketing Problem

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In light of the recent outcry about social networking privacy lapses and the potential misuse of users’ personal information, long-time web thought leader Esther Dyson had this to say at the Pivot marketing conference in New York City Monday: Online privacy is a marketing problem.

Esther Dyson, Chairman of EDventure

The disclosure of personal information is a complicated subject, one that young people are starting to understand pretty well, but adults are catching onto a little more slowly, said Dyson, who is chairman of EDventure Holdings and an investor in companies like Flickr (s yhoo) and 23andMe. While Facebook is often targeted for obfuscating and breaching user privacy, Dyson contended that the company is actually doing a reasonably good job of pushing forward its users’ understanding of privacy, with a few exceptions.


But the issue is more practical than all that, according to Dyson. “It’s not about privacy; it’s about transparency, disclosure and control,” she said. “I don’t know what privacy is, and you as marketers don’t know what privacy means to each of the individuals you market to. What you can do is you can disclose your own practices, you can make them intelligible and you can give your users control.”

The problem is, public concern about online privacy is escalating quickly. Within a day of the Wall Street Journal posting its report about Facebook user IDs being transmitted through RapLeaf to advertising and tracking companies, two U.S. congressmen had already written to Facebook CEO Mark Zuckerberg to get him to describe the extent of the problem.

[inline-pro-content]Web sites and advertisers need to get their act together, and the complicated messaging they are starting to offer about what information behavioral targeters are tracking isn’t going to cut it, Dyson said. Very soon, “the FTC is finally going to take action, and finally will regulate with a very complicated and technology-retarding action,” Dyson warned. “We have maybe a year or so to try to fix this ourselves before it gets fixed to us.”

Dyson thinks marketers should use the same personalization and creativity they’re applying to target behavioral advertising in order to craft personal messaging that informs users about any personalization that’s occurring. Here’s Dyson’s suggested mandate, and I have to say I think it’s a compelling one:

Know your customer, and talk to that person as an individual, not as someone in a bucket. Don’t talk to them as ‘Millennials,’ talk to them as ‘You, Joe, who checked in at Times Square last week.’ Take that same consumer intelligence, take that same creativity, take that same ability to personalize and apply it to these people’s data. Explain to them what you know about them in a personal way, in a way they can understand. And then they will trust you; they will make up their minds do we want the free content or not, but it will be a genuinely two-way transaction where there’s real disclosure and real consent. It’s shocking to me that with all the creativity in this industry we can’t figure out how to explain to our own customers what it is we’re doing to them and have them genuinely part of the conversation rather than watching them from behind the two-way mirror.

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6 Responses to “Esther Dyson: Privacy Is a Marketing Problem”

  1. It’s bizarre. If I, as an academic researcher, want to study the opinions and habits of people I have to go through a grueling review by my institution’s ethics board and adhere to standards that have the best interest of the subject in mind. If, however, I’m a website, I can collect exactly the same data, on a far wider scale, and I can do whatever the hell I want to with it, and I don’t have to answer to anyone.

    It’s fine to consider Facebook members the product, but that’s not how Facebook presents itself. It presents itself as a personal networking site oriented around the users, so it’s not surprising those people would want some say. If you’re selling widgets, those widgets don’t have an opinion on how they’re marketed or who they’re sold to, but we’re talking about people here. If Erik’s point about people being the product is true, then Facebook, Foursquare, et al. are not just incompetently explaining things to their members. They’re deliberately obscuring the issue. There’s a reason they call the form you have study participants sign the “_informed_ consent” form. Can you imagine what people would say if the forms listed “sell your information to online marketing firms” as a possible use of your data?

    There’s a difference between publicly funded research studies and private companies, but the standards for ethical treatment of people don’t vary depending on who’s doing it.

    It is a marketing problem, but the problem they’re trying to solve isn’t disclosure. It’s “How can we continue to get away with this?”

  2. Interesting piece, but not sure I’d agree that young people understand privacy issues “pretty well”. Here in the UK, 13% of girls and 21% of boys aged 8-15yrs have a Facebook profile with default privacy settings, (ie. wide open). They’re pretty large percentages – particularly in light of FB Places. Either they don’t understand or they don’t care … and if they don’t care then they don’t understand. So while I’d agree that openness and transparency are key, I’d argue that so is education around the issues – for young people in particular.

  3. I’m not sure if online privacy is a marketing problem or just a commonsense problem. Facebook’s customers are not the members. Facebook’s customers are the zynga’s and rapleafs of the world. They’re the ones paying facebook’s server bills so they’re the ones that facebook has to keep happy. The facebook membership is the product that facebook sells. That’s why you can’t trust your privacy with them. Your privacy isn’t part of their business model. That doesn’t mean the trade off isn’t worth it to some people, but really if you’re using their network for free then they should get to sell whatever they want of your identity. They would have less problems if they were just more transparent about that.

  4. Great article, Liz. Thanks for sharing (I would have missed Esther Dyson’s comments otherwise). I think part of what contributes to the problem is the number of players who sit between the publisher and the end-user. With the presence of an ad network, an exchange, a DSP, an ad optimizer, a data source, etc., it’s hard to figure out where to do what (and I haven’t even gotten to the advertiser / agency side of the equation).