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Conversational Commerce Update: End-user Advocates Set FTC Straight on Personal Data Ecosystem

2011 February 21

In a tour de force of clear writing and exposition (albeit in 33 typed pages), Kaliya Hamlin and Mary Hodder, executive director and chairman, respectively, of the Personal Data Ecosystem Collaborative Consortium (PDECC) have provided the U.S. Federal Trade Commission (FTC) with this response to its proposal for “Do Not Track” regulations (similar to the “Do Not Call” List for phone-based telemarketers).

Hamlin and Hodder start by pointing out that the “Do Not Track” mandate does a double disservice to the quality of commerce. Advertisers, on the one hand, already “target” product development, customer acquisition, promotional and advertising strategies based on old and often inaccurate information from credit bureaus, data aggregators or even Facebook archives. Denying them their diet of fresh cookies with tracking data on recent searches or site visits will mean that they will be even more clueless than under “business as usual.”

“Do Not Track” is also harmful to users because it takes away the possibility of serendipitous circumstances that arise when one is a member of a vendor’s “frequent buyers’ club” or other loyalty program. Cookie blocking is simply too binary (I know “binary” is an absolute term but “too binary” just feels right). At the end-user’s request, an important source of information is suppressed, the economic value of information for advertisers (such as high click-through rates for an ad) is unavailable and end-users will not gain any of the benefits either because they have lost any ability to influence (albeit in a passive manner) vendors as they tailor their products, services and advertising.

Hamlin and Hodder observe that “Business As Usual,” the other end of the spectrum, leaves the door open for more nefarious methods of surreptitious data collection and aggregation across modalities. “Economic value is derived,” they assert, “but at the expense of the basic dignity and privacy rights (ie personal control) of the individual. It is at this point in the document that the authors bring up the idea of “Personal Data Storage Services” (PDSS) to serve as the middle way, providing “an opt-in modality with greater choice and control to the individual over their data…” while offering greater value to the business community, with huge innovation and market opportunities.”

In the ideal, a PDSS provides end-users with a “place” (physical, virtual or “hybrid”) for them to aggregate and manage their own data and then provide “permissioned access” to businesses, services or individuals that conform to their standards and requirements (ie earn their trust). The result, according to Hamlin and Hodder, will be “better customization, transparency, access and the ability to correct, as well as more relevant search results and commercial offers, resulting in increased value for the user from their data.”

I can’t speak for the FTC, but the message should be loud-and-clear to the Conversational Commerce community that there are real business opportunities at the intersection of vendor demand for current, relevant data and end-user requirement for trust, transparency and control of their personal data. Hamlin and Hodder already “identified over thirteen startups (some of them with significant venture capital funding), at least three open source projects, several technical standards efforts in recognized international standards organizations along with companies in the web, mobile, entertainment and banking industries working on this model.”

As for end-users, the precedent has been set by the likes of myYahoo or “myAnything” that they (we?) are destined to be pretty passive in our efforts to manage the information we publish about ourselves on the Web-based ether. We don’t often update our profile info and often don’t pay attention to the personal data we upload consciously or unconsciously to “social media” sites or platforms. History has shown and experience tells us that the vast majority of end-users will not take a very active role in maintaining their profiles or culling through their personal data to insure accuracy. But, when given economic incentive and entertainment value, it’s amazing how active an individual gets in keeping personal information up-to-date and accurate. We’re on the threshold of creating a business opportunity that provides economic and entertainment benefit to both the advertiser and the end users.