Consumer concerns about database proliferation and individual privacy rights

Databases and Privacy: An Ethical Issue for Marketers

The continuing debate between consumers, consumer rights' groups and marketers as to who actually owns consumers' data is becoming more divisive and debated. Marketers attest that once a customer purchases a product or service, opts in with their personal information either to complete a transaction or request services, the information becomes the company's asset as part of their Customer Relationship Management (CRM) system and databases (Milne, Bahl, 2010). Consumers and consumer advocacy groups claim that the management of this data jeopardizes not only their identities but their financial standing with credit reporting agencies as these systems are often breached (Dolnicar, Jordaan, 2006).

The Ethics of Managing Personal Data

The ethical debate over how best to use customer data in marketing databases has progressed from the use of opt-in to gain useful information for serving customers (Connon, 2002) to reselling it without the customers' approval or knowledge (Dolnicar, Jordaan, 2006). As social networks have made personal information available publically through Facebook, location data through Foursquare and up-to-the-minute updates on Twitter, consumers are gradually offering more of their personal data online for free anyway, marketers argue (Milne, Bahl, 2010).

The paradox however is that many marketers have been found to use personal data unethically, often analyzing and categorizing it for selling products that the customer never gave approval to be contacted about. The many problems at Facebook are a case in point, in fact this social network is almost like a worst practices study in how not to manage customer data. From the unauthorized use of the Facebook Beacon that tracked user's activity off the site, and then reported back which sites they went to so Facebook could drive up advertising rates, to the blown marriage proposal that they orchestrated, Facebook know how to compromise customer data very well (Freeman, 2011). Facebook was tracking the activity of one of their young male customers as he checked for engagement rings. His activity was posted as advertisements to anyone viewing his profile including his to-be finance. As the Facebook beacon continued to provide data, she eventually saw the store he bought it from. The engagement surprise was blown, courtesy of an awkward management of personal data by the world's largest social networking site (Tsai, 2008).

Using Data for Marketing While Respecting Consumer's Rights