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The Downside Of Social Media
What About Our Privacy?

by Lyndsay Wise, President, WiseAnalyticsMonday, July 19, 2010

Everyone touts social media and online communities such as Facebook, MySpace and LinkedIn as the best thing since the advent of the Internet.  People can create online communities, collaborate on projects, keep in touch with friends, develop business contacts, and more.  Consequently, the way people communicate is slowly evolving from email to text and chat - and people are constantly connected to technology and in touch with people that they might otherwise not have access to due to geographic boundaries.  Essentially this means that the world is becoming much smaller and that people can stay connected any time and in any place.

As with every positive technological advancement, concerns also exist.  Because information is uploaded and stored online, transactional records are kept and information about people and their connections exists; data becomes commoditized.  How do people maintain their privacy when online analytics have become the de facto way of driving B2C sales and marketing efforts?  Can people protect the information they store and share online from being used beyond their intentions, i.e., sharing photos and  information with family and friends?

Now that information and data collection drives the way businesses plan future products and services (and target demographics), social media-related data becomes the tool of choice for marketing and analytics data collection.  This article looks at some of the benefits for B2C companies using social media analytics to drive performance and  profits as well as the concerns that exist for consumers that use social networking communities as a tool to stay connected to family, friends and business associates.

Social networking analytics – driving businesses to a new level

For organizations, the Web has become a primary channel for business.  E-commerce and Web analytics drive profits and information collection.  Website visits, pages and products viewed, demographics, personal and professional associations, etc. are the types of information that can be collected to identify the best way to position and market products.  The types of products being purchased, whether collaborations can be made between various sale items or the association between sales and buyer demographics - it's all information that is commonly collected.  Organizations have become skillful at identifying relevant customer information or buying the data required to help them hone in on customer-buying preferences.

Now that B2C companies are adept at collecting information posted online, the next step is GPS and geographic-related information.  For instance, companies now have the ability to use relevant location data to identify where consumers are at any given time.   Data warehouses are being used to collect information about customers, their busying habits, where they live, where they are, to market to them irrespective of location or due  to store proximity by using mobile devices as a conduit. 

As shown, the benefits to organizations are astronomical.  Advanced analytics are becoming commonplace within companies and at the same time, consumers are increasing their online usage, making information collection easier.  Businesses now have access to a wealth of information that can be used for multiple purposes, and as organizations become more proficient at achieving actionable results from their use of social networking analysis, the types of information and the correlations made will become more personal in nature.

Setting the stage for consumers – looking at social networking participation and concerns about privacy

It is now obvious that both businesses and consumers benefit from online communities.  As mentioned, the ability to communicate and share ideas, photos, personal updates, business ideas, and the like create a channel for people to keep in touch with friends and family constantly.  Time and space no longer create barriers.  People can get involved in issues, advocate for causes, get news as it occurs, and share information across the Internet without any barriers.  With this also comes the sharing of personal data and preferences that become the rights of others.  For instance, most information posted on social networking sites becomes the property of the hosting site, meaning that information can be used or sold without permission.  Companies use posted pictures and information to analyze potential customer preferences and to target products and services to consumers based on the information shared online.  In most cases, this is harmless, but still represents an invasion of privacy.

Depending on how individuals feel about having their personal information and  associations used as marketing tools, or their photos sold to companies, general privacy might not be an issue.  However, as technology advances there is more room for individual privacy to conflict with information gathering and marketing initiatives.  Now, online activity might be monitored and collected, but as more companies look towards location intelligence and GPS-related data, the ability to track movements and see people using satellite technology means that privacy no longer exists. 

Do the benefits outweigh the risks?

Currently, the benefits might still outweigh the risks when looking at online participation and information sharing.  As each individual has his/her own take on what represents too much privacy infringement, different people will have different approaches to the types of information they share online and what they choose to keep outside of social networks.  A balance is required to enable people to keep in touch with the people important to them without having to worry about the information they post online.  For organizations, the more information available the better; however, as data volumes grow and as analytics expand towards GPS location intelligence, the discussion surrounding privacy will become more broadly discussed as the potential for harm also increases.

About the Author

Lyndsay Wise is an industry analyst for business intelligence. For over seven years, she has assisted clients in business systems analysis, software selection and implementation of enterprise applications. Lyndsay is the channel expert for BI for the Mid-Market at B-eye-Network and conducts research of leading technologies, products and vendors in business intelligence, marketing performance management, master data management, and unstructured data. She can be reached at lwise@wiseanalytics.com. And please visit Lyndsay's blog at myblog.wiseanalytics.com.


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