The Most Important Word on the Internet (Part 2)

As I described in the first part of this post the other day, the most important word on the Internet isn’t “Like” or “GroupOn”.  It’s “transparency”.  I’ve already examined how transparency is crucial to public and personal brands.  In this post, I want to examine how transparency and privacy go hand-in-hand, and how markets that have grown around the Internet can’t succeed without it.

Privacy

There are two sides to the privacy issue online.  Just as we are concerned with how we expose our personal data, we also worry about how others use it.  This goes well beyond extreme cases like identity theft.  Facebook has gotten in hot water in the court of public opinion several times in the last year over its privacy settings.  The problem has not been that it allows for data to be available, it’s been the way in which its settings operate.  Where consumer assumed settings would be opt-in (that is, they would be disabled until deliberately activated), Facebook had them opt-out (that is, activated by default).  Additionally, the settings were difficult to navigate and understand.  Had Facebook been more forthcoming about how their settings worked and how users could change them (which they eventually opted to do), they could have solved the problem even before it arose.  In other words, they could have prevented the situation if they had been more transparent.

Online advertising is effective due to behavioral targeting that’s been derived from tracking personal data and activity.  People are becoming more comfortable with practice, as this data is letting them see advertisements and receive deals that are more appropriate for them (unlike on TV, where a young woman interested in sports and finance is going to be hit with a barrage of ads about erectile dysfunction pills and retirement plans.)  As I often note to people who are concerned with the nonchalant attitude that members of Generation Y hold toward more focused targeting on the internet, younger users are beginning to view privacy as a currency that they can exchange for better access and better deals.

So what does this have to do with transparency?  Even if people are allowing their data to be collected, they want to know where it’s going and how it’s being used.  This is why we still make sure to check the box that says “don’t share my e-mail address with third parties” when we’re signing up for new offers online.  Advertisers and agencies who traffic in data understand this.  As a panelist explained at a panel I covered at OMMA Adnets this fall, respecting the privacy of users has become as much an ethical issue as a legal one.  At first glance, the industry that has sprung up around data collection and online cookies may seem very different from consumer product markets, but players in the middle of the supply chain of both markets have to be equally careful.  A retail chain doesn’t want to source inferior product or one that has been manufactured in sweat shops, and advertising agencies and networks don’t want to use third party data that has been sourced or used in a manner that’s not transparent.

What do you think?

In addition to writing this series of posts, I’ve also posed the question “What is the most important word on the Internet?” to Quora.  I invite you to join that conversation and to see what others feel is a succinct and crucial idea for our online behavior.

In what other areas of our online behavior do you believe that transparency is critical?  How does it affect social gaming or how I write this blog?  I have my thoughts, but I want to hear yours too!

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