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RUNNING HEADER: Online Marketing and Consumer Privacy 1

How Does Online Marketing Practices Affect Consumer Privacy?


Online Marketing and Consumer Privacy 2

Abstract

The increase reliance of the Internet revolutionized how both organizations and individuals

conduct business. The most significant business activity conducted online is e-commerce. This

study investigates the internet marketing tools being used by advertisers and how it impacts the

privacy of consumer information. This research is performed by reviewing the common devices

in the collection of marketing data on consumers. The data offers some possible relation between

business intent and their level of concern regarding their consumers personal privacy. The

results support and extend previous research by showing that it can extend limited clues to

vulnerability to both the user and the company involved.


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Introduction

With greater reliance, consumers are continuing to prefer the web for their shopping

needs. Ovum, a London-based tech research and advisory firm, has even projected that mobile-

enabled sales will reach $2.05 billion by 2020 (Berry, 2016). With this upward trend, most

businesses are pressured to create ingenious methods to generate revenue online through specific

targeted advertising. However, online businesses have their unique methods to identify their

consumers, some more complicated than others. However, they are being criticized by

consumers for collecting their private information and creating a false sense of trust.

The research conducted in the discussion will focus on advertisers use of internet

marketing tools, such as internet cookies, internet filters and social media sites. As with previous

research, this study examined basic profile information provided to online businesses, when

consumers complete their purchases--such as age, sex, region and income, the impact on

consumers privacy of personal information.

How Online Marketing Tools Affect Consumer Privacy

Advertisers are continuously challenged with collecting necessary data from their

targeted market. With the rise of mobile devices and social media, marketing companies are

constantly searching opportunities to apply old rules to ever changing marketing platforms online

(Bhargava, 2013). As such, Hoofnagel (2014) argue that, ...advertisers are using technologies

that consumers are not familiar with, specifically in order to override consumers preferences (p.

278). The tool being used by the majority of advertiser is Internet Cookies, which aide with

tracking online shopping behaviors of their specific targeted niche. Marketers also rely on the use

of search engines, such as Google and Yahoo, to track users through the use of internet filter

bubbles. This tool is based upon analog calculations of the user behavior, which offers a path of
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least resistance, which is specifically created from the personal data entered. Since the data

tracked in these tools are not static, it follows them to other websites. Thus, this form of social

engineering intent is to convince consumers into thinking they want, rather than providing them

with the freedom of choice (Allnutt, 2014).

Another popular device is obtaining the behavioral data through social media sites. Since

primarily funded by company sponsored advertising, a plethora of behavioral data is readily

available about its users. For example, many advertisers have leveraged Facebook to collect its

user data for the purpose of driving ads outside this site (Miners, 2014). Many internet users do

not have control, and may be even unaware that their behavioral, as well as their personal

information, are being collected through these popular internet marketing tools. With the rise of

major retail companies consumer data recently compromised, shoppers confidence to provide

personal information online has waned and online businesses now have to earn this information

(Pophal, 2015, p. 12).

How FTCs 2012 Privacy Report Affects Online Marketing Tools

Most consumers are also relying on government intervention to curb internet advertisers.

While there are no formal policies to enforce e-commerce privacy practices, the Federal Trade

Commission (FTC) has launched its 2012 Privacy Report, with intent to alleviate this issue. This

report outlines a map for online retailers to provide strong and appropriate consumer privacy

protections. For example, FTC is attempting to encourage all internet businesses to implement

deidentification technology on their storefronts. This system offers robust user interface and

helps advertisers relies less on personal data to develop their marketing strategies. (Brill, 2014,

p. 5).
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Conclusion

This paper discusses online activity and privacy concerns of internet users, in relevance of an

advertisers intent to gather personal information for their marketing purposes. However, the

possible significance of these relationships is minimal. Therefore, making a general conclusion

that companies will make decisions that affect their marketing strategy, solely on the basis of

their target markets internet activity, is challenging and susceptible to error. Further research into

the extensive internet use is critical to ensure that feasible, as well as ethical, implications about

personal information embedded in internet shopping sites are better understood.


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Sources
All about cookies.org (n.d.). What are cookies in computers? Retrieved July 17, 2016 at

http://www.allaboutcookies.org/

Allnutt, L. (2011, June 29). The Filter Bubble: What the Internet is Hiding from You. Christian

Science Monitor. p. N.PAG.

Berry, A, (2016, Jul). 3 numbers that may change the way you see mobile retail. NRF Retail.

Retreieved on July 17, 2016 at https://nrf.com/news/3-numbers-may-change-the-way-

you-see-mobile-retail

Bhargava, M. (2013). Privacy in the Mobile Age: Recent Developments and New Regulations.

Woman Advocate, 22(2), 15-20.

Brill, J. (2014, Feb). Center for Policy on Emerging Technologies. The Internet of Things:

Building Trust to Maximize Consumer Benefits. Roundtable with FTC Commissioner

Brill Washington, DC February 26, 2014. Federal Trade Commission. Retreived on July

17, 2016 at

https://www.ftc.gov/system/files/documents/public_statements/203011/140226cpetspeech

.pdf

Hoofnagle, C. J., Soltani, A., Good, N., Wambach, D. J., & Ayenson, M. D. (2012). Behavioral

Advertising: The Offer You Cannot Refuse. Harvard Law & Policy Review, 6(2), 273-

296.

Miners, Z. (2014). Facebook privacy questions resurface. PC World, 32(12), 23-26.


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Pophal, L. (2015). The State of Mobile Content. Econtent, 38(1), 10-12.