American Marketer


Mobile’s balancing act: ROI of respecting customer data privacy

July 8, 2013

Alex Romanov is founder/CEO of iSign


By Alex Romanov

Back in 1890, Boston attorney Samuel Warren and future U.S. Supreme Court Justice Louis Brandeis published one of the earliest-known warnings about the threats to privacy posed by new technologies, in this case, photography – and its use in newspapers – as well as sound recorders.

Since the publication of Warren and Brandeis’ “The Right to Privacy” in the Harvard Law Review, most new communications technologies have been accompanied by much hand-wringing about how they could be used to invade individuals’ privacy.

Of course, we all have a natural aversion to the idea of being watched, listened to or otherwise monitored without our knowledge and so, naturally, a wave of harsh criticism – from the press, many politicians and the public – has come about from the recent revelations about the National Security Agency’s PRISM program.

According to news reports, PRISM extensively monitors Americans’ online communications, including emails, chats, searches, videos and photos, with the help of major telecoms and Internet companies including Verizon, Google, Facebook and Apple.

The much-discussed controversy reminded me of the wide-ranging conversation taking place in the mobile marketing world about how brands can harness customer data and turn it into actionable insights – without dismissing those customers’ valid concerns about how their information is being used.

Big Data yielding big mobile marketing opportunities
About 90 percent of all the information generated since the beginning of humanity has been created in the past two years or so.

This data pours in like a tsunami through billions of desktop computers, smartphones, feature phones, tablets, kiosks, digital signs, POS systems, ATMs, “smart” TVs – the list goes on and on. It keeps IT departments around the globe inundated and busy, increasing their systems’ storage and processing capacity.

And it continues to present a big challenge for marketers looking to turn this information inundation into actionable business intelligence.

A “big star” at nearly every mobile marketing conference held last year, Big Data looms large in the wider conversation over how marketers can use this massive proliferation of ones and zeros to know individual customers better and so provide them with offers that make sense, while keeping in mind that customer privacy must be respected.

I will restrict this discussion to the portable devices that almost all consumers carry at almost all times, including in bed and even on the toilet.

Whenever customers engage with brands through their mobile phones and tablets, they generate data that those brands can use to assemble a detailed picture of each customer’s wants and needs.

This information is much more than just a jumble of binary code. It represents a wealth of opportunities for marketers to make strong connections with their customers by serving up offers that are relevant to each customer’s preferences, which makes a sale that much more likely.

While 60 percent of surveyed marketers have recently told the Direct Marketing Association and Neolane that they are not yet fully prepared to deal with the challenges of Big Data, most are now aware of its potential and know they must find a way to tap it.

As Big Data grows, so do its possibilities. And, yes, marketers can definitely make the most of those possibilities, all without overstepping their customers’ data-privacy boundaries.

When it comes to collecting customer data, “no” means no
For as long as Internet access through home computers has been a mass-market service, consumers have worried about whether or not their personal information is safe.

A recent study by The Economist found that 75 percent of consumers worldwide think regulations preventing the misuse of their personal information are “weak.” A full 90 percent say they worry about their data being hacked and used to rob them.

So, the question is: How can brands make the most of customers’ data, while honoring their wish for privacy?

It starts with getting customers’ permission to interact with them on mobile at all.

If, for example, a shoe retailer with a loyalty program app rolls out a location-aware or proximity marketing initiative meant to pull in shoppers who come within a certain distance of a store, it is imperative that they get customers’ permission to send an offer first.

And when those customers say “no,” then it is no. Leave them alone.

Honoring opt-outs lets your customers know that you are listening to them and that you respect their desire for a certain level of privacy. These customers are likely to think better of you and, perhaps, they will feel more comfortable receiving mobile offers from you in the future.

Even when you do get customers’ permission, you can make your offers relevant by gathering non-identifying information – e.g., location, past purchases and price points.

If you want identifying details such as names, ages, phone numbers and email addresses, you should ask for them. If the customer says no, you still have plenty of data to work with.

GETTING THE customer data privacy question right is about striking a balance and knowing where the boundaries lie.

Respect for those boundaries makes it more likely that your customers will trust you and reward you with a long, successful and profitable relationship.

Alex Romanov is CEO of iSign Media, Toronto. Reach him at