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Will privacy laws hurt b-to-b marketing?

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“Do not track” Internet rules are kind of like Mars landing stations and coast-to-coast bullet trains: Everybody loves them in theory, but the reality can be something different. In 2011, Federal Trade Commissioner Jon Leibowitz raised a lot of eyebrows in the Internet world when he penned an op-ed piece in U.S. News and World Report calling for do-not-track mechanisms to be built into browsers. “Our browsing is increasingly tracked,” he wrote, “by a host of invisible data catchers that report your online clicks to marketing firms that, in turn, sell an astonishingly complete profile of your cyber behavior.” Leibowitz then offered the hypothesis: Imagine if you bought a deep-fat fryer and someone sold that information to your health insurance company, which then raised your rates. The response from the marketing world—which increasingly relies on sophisticated data-gathering to effectively target potential customers—was immediate. “That's just patently ridiculous,” said Linda Woolley, president-CEO of the Direct Marketing Association. “It hasn't happened; it's not happening; and it's not going to happen.” Still, Woolley said that the DMA and other marketing organizations are fighting an uphill battle against Internet privacy advocates, who have a much simpler and more emotionally effective argument to make. “If you stick a microphone in anyone's face—even in my face—and say, 'Do you favor Internet privacy?' they're going to say 'yes,' ” she said. “But when you get into the weeds of it and understand what that really means and how that would affect the economy, that's when it gets complicated.” Currently, there is no pending legislation—either on the national or state levels—that would enforce do-not-track rules or Internet privacy. But, Woolley said, after the new Congress is sworn in, she “wouldn't be surprised” to see a renewed push from privacy advocates. Of course, none of this debate really focuses on businesses or b-to-b marketing. Privacy advocates are hardly arguing that GM or IBM needs to be protected online. But that wouldn't stop b-to-b marketers from being affected by any privacy measures, said David Kovner, VP at marketing services company Rivkind Associates. That, in turn, could hurt their effectiveness. “Data-gathering can be helpful on a business level,” Kovner said. “If you know something about my business, it is helpful to me. Nothing is as offensive to me as a businessperson than getting calls that have nothing do with me. It's a waste of time. In a b-to-b setting, the more granular you can get, the better the offer will be.” It's too early to tell if privacy advocates will get any traction in an effort to halt data gathering, but the DMA hopes to get out in front of the conversation. The association created the Data-Driven Marketing Institute to lobby government officials and educate consumers about the value of data-gathering. “The whole purpose is to set the record straight on how consumers benefit from the use of personal data and how it gives them what they want,” Woolley said. “It's also about how data collection is a major driver for the economy as a whole.”
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