Invasion of Privacy

Invasion of Privacy

Invasion of privacy is perhaps the toughest public policy issue now confronting the direct marketing industry. These days, it seems that almost every time consumers order products by mail or telephone, enter a sweepstake, apply for a credit card or take out a magazine subscription, their names are entered into

980 Chapter 22 Direct and Online Marketing

some company's already bulging database. Using sophisticated computer tech­ nologies, direct marketers can use these databases to 'micro target' their selling

efforts. Yes, consumers often benefit from such database marketing ­ they receive more offers that are closely matched to their interests. However, many critics worry that marketers may know too much about consumers' lives, and that they

may use this knowledge to take unfair advantage of consumers. At .some point, they claim, the extensive use of databases intrudes on consumer privacy. For example, they ask, should telecom network operators be allowed to sell marketers the names of customers who frequently call the free (e.g.0800) numbers of, say. catalogue companies? Is it right for credit bureaux to compile and sell lists of people who have recently applied for credit cards ­ people who are considered prime direct marketing targets because of their spending behaviour? Or is it right for government agencies to sell the names and addresses ol' driver's licence holders, along with height, weight and gender information, allowing clothing retailers to target tall or overweight people with special offers?

In their drives to build databases, companies sometimes get carried away. For example, Microsoft caused substantial privacy concerns when it introduced its Windows 95 software. It used a "Registration Wizard' which allowed users to register their new software online. However, when users went online to register,

without their knowledge, Microsoft took the opportunity to 'read' the configur­ ations of their PCs. Thus, the company gained instant knowledge of the major software products running on each customer's system. When users learned of this

invasion, they protested publicly. The enraged outcry led Microsoft to abandon such snooping. However, such actions have spawned a quiet but determined 'privacy revolt' among consumers and public policy makers. 47

The direct marketing industry in a number of countries is addressing issues of ethics and public policy. For example, in the United Kingdom, faced with the threat of legislation, including wider EU directives, the industry has adopted strin­

gent self­regulation measures to restrain unsavoury practices and to bring the 'cowboys' into line. Similarly, in the case of the Internet, there is rising user concern about malpractice, ranging from the flood of unsolicited '.junk cybermail' to intrusion of privacy. So, while the Internet offers vast potential as a multi­ media, global communication channel to marketers, firms should seek to police themselves, operating within acceptable codes of practice (see Marketing Highlight 22,3). Direct marketers know that, left untended, such problems will lead to increasingly negative consumer attitudes, lower response rates, and calls for more restrictive legislation. More importantly, most direct marketers want the same things that consumers want: honest and well­designed marketing offers

targeted only towards consumers who will appreciate and respond to them. Direct marketing is just too expensive to waste on consumers who don't want it.

Mass marketers have typically tried to reach millions of buyers with a single product and a standard message communicated via the mass media. Consequently, most mass­marketing communications were one­way communi­ cations directed at consumers rather than two­way communications with

consumers. Today, many companies are turning to direct marketing in an effort to reach carefully targeted customers more efficiently and to build stronger, more personal, one­to­one relationships with them.