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The debate over consumer privacy in the interactive age raged on last week as attendees of the Conference on Interactive Marketing/West argued over how much information marketers and service providers could gather and what they could do with it.

Triggered by U.S. Rep. Edward Markey's (D., Mass) questioning this month of America Online for renting its subscriber lists, speakers at the conference in Scottsdale, Ariz., warned the 400 attendees not to get caught up in the rush to build databases.

"I sent [AOL President-CEO Steve Case] a blistering e-mail that [said] the suggestion about selling my name and what kind of computer I have to someone just outrages me," said keynote speaker Peter Sealey, former president-chief operating officer of Interactive Network and now a new-media consultant. "The first time you are abused as a consumer by someone giving your name or information about you ... you are going to react very, very angrily."

AOL's Ted Leonsis defended his company's actions, saying all media have "blended" business models, with several revenue streams, and that AOL was merely trying to develop a new revenue source.

Saying that AOL wasn't the only online service to sell subscriber data, Mr. Leonsis, president of AOL Services Co., said the company was caught in the wrong place at the wrong time.

Mr. Case himself published an online letter to AOL subscribers last week defending the rental of subscriber lists as "a common practice" in the online and magazine publishing industries. But he admitted that "we made some mistakes" in setting up the system and informing subscribers. The letter also told subscribers how to opt out of the program.

Other online services were quick to point out their sensitivity to the issue.

"Privacy is of paramount importance," said Scott Kurnit, exec VP-consumer products, marketing and development at Prodigy Services Co.

Ironically, the ability to gather and pass on such personal information about consumers has been a key selling point for interactive media. Marketers have been told they'll get access to everything from what movie preferences a household has to what it had for dinner last night. With that data, they plan to send targeted coupons via in-home printers and marketing messages based on personal likes and dislikes.

The key to balancing privacy and target marketing will be to give consumers control over the messages they receive, said Mr. Sealey. "All forms of interactivity will increasingly employ intelligent software agents ... to know you and your predispositions and filter out the unwanted and unnecessary," he said.

"We have to remember that people do very little interacting" today, added Mr. Kurnit. Advertisers "cannot take control out of someone's hands when they think they're interacting."

For others, the solution is to instill a modicum of trust in consumers.

"It's a non-issue for us at this point," Roland Sharette, VP-director of interactive resources at J. Walter Thompson USA, Detroit, said of client Ford Motor Co.'s online information-gathering efforts. "We haven't had any problems with it."

Keeping consumers in the loop as interactive media develops is key, said Ted Hoff, senior VP-general manager of Fox Interactive, marketer of the upcoming videogames based on the movies "The Pagemaster" and "The Tick." Rushing headlong into a new technology without making sure consumers understand and want it is a sure way to kill the market, he said.

For Time Inc. Multimedia's Bruce Judson, general manager of multimedia products and services, the new interactive frontier is the Internet.

In a speech that carefully avoided any reference to Time Warner's interactive TV test in Orlando, Mr. Judson called the Internet "an incredible hotbed of interactivity" and implored marketers and media to start exploring it. (Time Inc. Venture's Vibe already has a home page on the Internet.)

Marketers like AT&T have been moving onto the Internet, and Miller Brewing Co. is expected to announce soon that Miller Genuine Draft is opening an Internet domain.

But others questioned whether the Internet is a friendly place for marketers, with Delphi Internet Services Chairman Dan Bruns calling the global web of computer networks "the last bastion of socialism."

The twice-yearly interactive marketing conference continues to have problems attracting marketers. Of the 400 attendees, less than one-fourth could be classified as being from marketer companies or advertising agencies. Those executives were highly sought after by other attendees, mostly executives from content-hungry interactive media services.

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