Online Privacy Showdown Looms

As the Krux crew catches its breath after a whirlwind couple of days, we also began catching up on our reading.  This excellent NYT piece hit yesterday.   While we have spent the last day or so talking about the publishers’ challenges highlighted in our 2010 Cross-Industry Study, it’s important that we not overlook the other important player at the data leakage table – the consumer.  They – and their data – are the real crux of the matter (please, please pardon the phrasing).

The NYT illustrates the debate that’s raging and the showdown that’s looming:

“You simply can’t just turn off tracking,” said Mike Zaneis, a vice president at the Interactive Advertising Bureau. “That’s the way interconnected systems talk to each other.” Such a mechanism, he added, would be “troubling and difficult to implement at a technology level.”

Consumer advocates worry that the Commerce Department will look more after businesses than after consumers, perhaps undermining the ability of the trade commission to enforce the rules, whatever they turn out to be. The Commerce Department announced its intention to conduct its own privacy study in April, roughly six months after the trade commission began its project, leaving consumer advocates thinking that the two bureaucracies didn’t see eye to eye.

“The Commerce Department has never been a consumer advocacy agency,” said Edmund Mierzwinski, consumer program director for the United States Public Interest Research Group. “They generally take the view of protecting special interests.”

There is no shortage of opinion across the industry, nor any shortage of intellect.  Let’s continue the healthy debate and come together for further data-driven explorations of industry challenges and, collectively, drive meaningful change.  As stated in an earlier post, and as highlighted in the NYT piece, if we don’t fix these problems, someone else will surely fix them for us.

Krux Digital Releases 2010 Cross-Industry Study

This morning, Krux Digital released the findings of its 2010 Krux Cross-Industry Study.  With this study, we have undertaken a comprehensive review of data collection activities across the industry, with attention to the phenomenon we have referred to as ‘data leakage’ in earlier industry commentary.

The Executive Summary, along with the study’s full findings, are available here.  We have also issued a press release announcing the the study’s publication, which can be viewed here or here.  Key findings include:

• 31% of all data collection was enabled by parties other than the publisher, often without their control or consent
• 55% of all companies collecting data on a Web site also brought in other companies to collect data as well
• 27% of all collection was conducted by parties that are potentially competitive to publishers in media or data sales
• 167 different companies were observed participating in active data collection across just fifty publisher sites, few of whom appeared to be doing so in the publishers’ interest or at their request
• Data leakage via third party data collectors resulted in at least $850 million in lost revenue annually for the publishers within the study’s sample

As you might expect, our study has garnered interest in the press, and there is related news coverage — most notably in the WSJ.  This coverage explores industry data practices, features some of the Krux results, and highlights the risks faced by publishers from data skimming and theft.  While the Journal will certainly remain consistent with the clear, strong editorial voice they have established on these matters, we at Krux are simply excited to see such energetic discussion of this pressing concern.  The Journal article can be viewed here.  As the Journal notes:

Sites are also worried outsiders may gain access to sensitive information about their visitors, raising privacy alarms.

MSNBC.com, jointly owned by Microsoft Corp. and NBC Universal, has intensified monitoring of software being installed on visitors’ computers. “The sheer volume of activity was greater than we thought,” said Kyoo Kim, vice president of sales for the company’s digital network. There were “a lot of things happening without our knowledge.”

Web publishers are starting to focus on the challenge of responsibly stewarding and managing consumer data.  They realize that they can’t monetize an asset over which they don’t assert full ownership and control, or that’s being leaked one speckle at a time.  At Krux, we’re committed to helping publishers with protection, then management, then monetization, in that order, and that’s the thrust of our platform module release cycle.    As our study demonstrates, the industry needs to attack data protection first.  It’s the right thing for publishers, consumers, marketers, regulators, and legislators.

We’re sharing our results in the interest of catalyzing and informing industry dialogue regarding the data privacy and data piracy risks we all face.  We invite you to explore the findings.  Feel free to follow up with any member of the Krux team if you have questions.

on blood diamonds and grazing lands

The Journal’s latest article regarding the active collection and black market sale of Facebook user IDs is pretty alarming.  (The companies in question have not been named.  And kudos to Facebook for their swift response.)

It’s not accidental data leakage this time, nor is it incidental data collection.  It simply appears to be the product of a well-organized business plan very effectively executed.

Facebook Inc. said that a data broker has been paying application developers for identifying user information, and that it had placed some developers on a six-month suspension from its site because of the practice.

Consumers’ digital signatures will emerge as the most important media asset of the coming decade.  And how they are used in enhancing all manner of content, commerce, and advertising experiences will transform the media landscape.

If you’re a digital media insider, you have internalized this and are surely energized by all of the possibilities.  And you’re also probably a little jaded – or at the least a little numb – when it comes to the near-constant series of revelations made across the industry regarding publisher data piracy and consumer data privacy.

It’s understandable.  But as an industry, we must not fall victim to the tragedy of the commons.  There are near term benefits to doing nothing.  There are also long term benefits to doing something right, right now.  On most days, I’m certain the industry wants the latter of those two.

We all know there’s a problem.  And we all know that it’s one that only the industry can address collectively.  And address it we will, either of our own accord at the time of our choosing, or sometime down the road a bit with the active participation of the regulators.

There are folks doing fantastic work on our behalf, in DC and elsewhere, shepherding the industry, educating legislators and regulators, and delivering meaningful data protection tools to consumers.  And their efforts and investments are appreciated.  But it’s going to take something from all of us.

Open question for the day:  What are you doing – in big ways or small, individually or via your organization – to change industry data landscape for the better?  There has to be something.  If not, now is the time to work it into that 2011 plan.

priceless – as overheard on the floor of adtech…

It should make marketing folks across the industry spend Monday and Tuesday rewriting their websites.  Thanks to LUMA Partners, et al.

http://www.youtube.com/v/lOyTfH9Bpmo?version=3