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The digital footprint: Business boon vs. privacy bane

Like many IT execs, O.C. Tanner CTO Niel Nickolaisen is seeking a balance between digital footprint data mining and the privacy risks it entails.

Several years ago, one of my developers told me he refused to participate in any supermarket loyalty programs. He thought at some point the supermarket would make that loyalty program purchase information available to others. His health insurance company would then know most of his supermarket purchases included items like Cheetos, bacon and Red Bull, causing it to profile his health, predict an unhealthy future and increase his premiums.

I figured this guy was a crackpot and envisioned him spending his spare time building a bunker in his backyard. However, over the past couple of years, I realized he might have been onto something.

Niel NickolaisenNiel Nickolaisen

We all leave a digital footprint; little breadcrumbs of our interests in products, movies, music, topics, activities, places, people and pretty much everything. Through various tracking mechanisms, companies sweep up these breadcrumbs, combine and sort them with advanced analytics tools, create profiles and then sell or give the profiles to people who target us with advertisements and offers. And because our digital footprint leaves such rich information about us, sellers can use the information to target us at the individual level. This micro-targeting is the basis of the digital marketing products that are evolving and expanding -- sometimes more quickly than other technologies are growing. Such tools are why some experts predict the technology budget of the marketing department will outgrow the traditional IT budget.

As is often the case, there two sides to our digital footprint. As leaders in our businesses, we should figure out how to leverage our prospects' and clients' digital breadcrumbs. Doing so lets us significantly improve the effectiveness and efficiency of our marketing campaigns. Why send an advertisement or offer to thousands of uninterested recipients when we can send it to the few that are the most likely to respond? And, as we sweep up more and more data and combine it with technology innovation, we can target not just persons, but also the best time of day or instance in life to send the advertisement or offer.

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On the other side of the digital footprint is a troubling seven letter word: privacy. As a consumer, I'm a bit troubled that so many people know so many things about me. Even more troubling is what they can do by combining their individual bits of information about me into a comprehensive profile. But, what can I do about it? One option is to opt out, but I enjoy surfing about -- particularly in boring meetings. I could use a proxy service for all of my Web interactions, but this is often contrary to our security policies. Probably the most reasonable thing I could do is to make sure my antivirus, anti-spam, anti-malware, anti-everything are up to date, and clean up tracking cookies on a regular, frequent basis. Even with that, a whole lot of people will know a whole lot about me.

How do we each manage the two sides of digital tracking? Do we prefer privacy over the clear economic value of customer intimacy? And, how might regulations force our hands? I am not sure as to the answers, but it is certainly time to start experimenting with potential solutions.

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