Prying Eyes

The cry has gone out from web surfers everywhere: "Stop looking at me!" How can your marketing plan respect their wishes?

Nothing has quite stirred passions lately as much as the topic of Internet privacy. Everyone seems to have an opinion on the topic-whether you're talking to business owners or their customers. Even lawmakers are struggling to get a handle on the issue; more than a dozen bills proposing various regulations have already been introduced this year.

On one hand, you have your customers-who, incidentally, have become increasingly tech-savvy. They're now demanding greater restrictions on the use of their private data as well as accountability from the companies that collect it. Some even remain reluctant to engage in e-commerce altogether, fearful that their personal information may be shared with other businesses or government agencies down the line.

Then there are the entrepreneurs who walk a fine line between collecting the information they need to build better customer relationships and scaring shoppers away. It's a tall order to reassure customers that collecting their data is necessary, that it truly benefits them and that their privacy will never be compromised.

"Rising consumer concerns, technological advances and business pressures will make privacy one of the hottest areas of the Internet policy debate in the next several years," confirms Jay Stanley, an analyst at Forrester Research.

Meanwhile, lawmakers are continuing their attempts to nail down more stringent requirements for Web businesses. Last year, for example, Congress passed the Children's Online Privacy Protection Act, which makes children off-limits to aggressive data-collection and marketing techniques. And experts expect even more privacy legislation to pass this year, especially with so many bills regulating numerous privacy issues pending.

But compliance won't be cheap. According to a study conducted by the Joint Center for Regulatory Studies of the American Enterprise Institute and the Brookings Institution and underwritten by the Association for Competitive Technology, adhering to the new Internet privacy rules could cost businesses a combined $9 billion to $36 billion.

The secret for entrepreneurs is in finding the perfect balance. "Modern technology, especially the Internet, has made the collection of personal information easier, faster and more thorough," says Walter O'Brien, executive director of the Privacy Leadership Initiative, a New York City partnership of CEOs from major corporations and business associations. "And that makes many people profoundly uncomfortable. There's a trust deficit of troubling proportions that keeps too many consumers on the sidelines. "For any company, the stakes in missing so many 'wary but wired' consumers are enormous."

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Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at

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This article was originally published in the September 2001 print edition of Entrepreneur with the headline: Prying Eyes.

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