E-Marketing as a Threat to Privacy: Information Privacy

¶ … Privacy: E-Marketing as a Threat to Privacy

Privacy is one of the most complex issues facing e-commerce today. Due to advances in information technology, it is becoming harder for individuals to maintain control over their personal information. More specifically, the advent of the information age has brought with it numerous concerns particularly because the accessibility of the internet allows for easy collection, processing, storage and utilization of personal information by multiple parties, which they use to their own advantage (Pavlou, 977). When it comes to e-commerce, information privacy is also a major source of concern because firms make use of their websites to gather information about their consumers, and they utilize this information to develop marketing strategies and conduct customized promotions. One study by PriceWaterhouseCoopers (PWC), for example, revealed that two thirds of all customers surveyed would embrace e-commerce more if they knew retail sites would not misuse their personal information (Willison and Warkentin, 2).

Defined as the concept of controlling how an individual's personal information can be used and controlled, information privacy can be viewed as both a moral and legal right (Pavlou, 978). The effects of information privacy concerns, therefore, can be felt by individuals at a personal level in their homes and even at their places of work. For instance, Willison and Warkentin give another example of a survey by PwC which established that employers viewed current and former employees as the biggest threat to information privacy within an organization (2). As e-marketers target consumers from wherever they are, capabilities of new electronics and their presence in homes have also allowed new classes of attacks by technology savvy burglars, in addition to facilitating traditional crimes (Denning, Konho and Levy, 95). It is therefore rather accurate to state that e-marketing is a threat to privacy and companies would benefit more if they guaranteed consumers the privacy of their personal information. To further analyze the effects of information privacy concerns, this text takes a look at reasons why e-marketing can be considered a threat to privacy and evaluates how the threat can be reduced.

E-marketing as a threat to privacy

E-marketing is the application of marketing techniques and principles via the internet. It encompasses all activities that a firm uses to market its brand using the internet and to attract new customers while at the same time retaining its market share. E-marketing makes use of the three Vs brought about by the increased use of the internet. These are: volume, the ability to process large amounts of data; velocity, the high data flow rate; and variety, the availability of different forms of data from a variety of sources (Lycett, 381).

In e-marketing relationships, consumers still share their personal information despite security concerns because they often assign economic value to privacy, based on economic principles such as a cost benefit calculation (Pavlou, 981). However, although rational customers reveal their personal information to the marketers for specific benefits, they still wish to withhold this information if they do not expect any benefits in return. Moreover, they only disclose this information voluntarily because they view privacy as a commodity they can sacrifice for various economic benefits; but they still object to firms using this information without their consent (Pavlou, 981).

There are three major ways in which e-marketing can be considered a threat to privacy. These are:

1) Misuse of personal information due to lack of adequate privacy controls

The efficacy of privacy controls often depends on their ability to minimize or counteract security risks relating to personal information (Willison and Warkentin, 4). Nevertheless, marketing firms take advantage of the fact that most consumers are not aware of privacy controls and if they do, they are not able to match the company's advanced information technology. Some then go ahead to use consumer's emails, credit card information, and identities to manipulate them into buying their products due to the consumer's lack of appropriate privacy controls (Pavlou, 981).

2) Unauthorized use of personal information for purposes outside of the original exchange

When consumers are comfortable with the way their personal information is managed, they are less concerned about their privacy, since they often view it as an exchangeable commodity (Pavlou, 981). In such a context, consumers will have no qualms with a firm using their websites to collect information that will be used to develop products that fit their needs. However, this privacy is breached once firms use consumers' personal information for reasons other than what has been agreed upon. Some firms are known to sell consumers' emails and even stalk consumers online. Willison and Warkentin also state that rogue entities may take advantage of the privilege to commit criminal activities using consumers' identities (2).

3) Misuse of home technologies

While capabilities of new electronics in the home setting has made life easier, marketing firms have taken to incorporating sensors and network capabilities in various products, which they use to monitor consumers illegally. From Barbie dolls with video cameras to bathroom scales that report readings through wireless networks, consumers are often left exposed; and their possessions, privacy, and well being threatened (Denning, Konho and Levy, 1). In essence, majority of consumers are not aware that that most of the devices can be controlled by external servers and mobile technologies that easily penetrate the perimeter and interact with alien networks.

How the threat of privacy can be reduced

To eliminate the threat of privacy posed by e-marketing, information science (IS) researchers should develop numerous information privacy protection tools and technologies that are easier to use for consumers, organizations, and other groups. Websites should also disclose more information -- for instance, a marketing firm may disclose more information about its organization and explain the site's privacy protection practices. Consumers will then be aware of the firm's stance in regard to safeguarding pieces of personal information.

E-marketing can also use push and pull technology to shape the privacy calculus, where location-based services will be used to establish a balance between privacy concerns and personalization of products to meet the consumers' needs (Pavlou, 980). Moreover, to reduce personal information abuses, consumers should ensure that they are well-informed about the organization they seek to engage in business with.

Organizations that rely on employees to handle consumer personal information should consider security compliance policies that all employees have to adhere to. Since there is a relationship between employees' thought processes and the efficacy of privacy safeguards, organizations should also consider these thought processes and how the organizational context may be influencing them prior to context (Willison and Warkentin, 14). Any reports of computer abuse and misuse of consumer's personal information should, therefore, be dealt with according to the law.