Growing privacy concerns

Facebook‘s launch of instant personalization caused an uproar in the blogosphere. The company ran a pilot with sites such as yelp.com, where if you are logged in to Facebook and visit these sites, the content served would be personalized based on your profile information. Users have the option to opt out. Blogs talked and talked about it, and reports resurfaced about how Mark Zuckerberg made a statement that Facebook “doesn’t believe in privacy.”

Facebook has been growing at a very fast pace and during one week surpassed Google as the most visited site on the Internet. What % of Facebook users know of and care about privacy issues? I was once asked, “what is your stand on it”? I had no answer. On one hand as a consumer, I am exasperated at how easily available personal information is on the Internet. On the other hand as an e-commerce executive, I cannot help but realize that without that information, how would we get new customers? How would we use targeting and segmentation to grow the business? My consumer side wins over the business side. If you Google yourself, you come across several sites that replicate information from social networks. Not only that, these sites have other personal information that is in public records of the government. I spent one day emailing a number of sites to remove personal information – one site refused because the information was publicly available in government records. It is scary because now I have access to information on how much a person spent on a house, or anything that the person may have written or contributed to in the past. A couple of sites get your business information from some place (probably LinkedIn), and you have vendors calling you all the time after subscribing to that site. I got my info removed – they put it back up after a few months.

I wonder, where will Facebook go in terms of privacy? Will users start leaving if Facebook lowers privacy barriers? Has Facebook’s growth reached a maximum, and the only way to go from here is down?

Privacy is not restricted to social networks alone. A large number of retargeting and behavioral targeting companies have cropped up. Retargeting is relatively new, where you put a cookie on visitors who come to your site, and you serve them ads on other sites that they visit to bring them back to convert on your site. Behavioral targeting has different business models – your visitor data is contributed to a common cookie pool, and ads are served to users on other sites based on how closely they match your site visitors. In layman terms, once you visit a site, the site’s ads “follow you around” on the Internet. Many e-commerce sites use these programs, and I have seen ads follow me! It is easy to tell which ones are retargeting and which ones are behavioral — if you get served ads on a site you recently visited, it is retargeting; if you see ads for competitors of the site you visited, it is behavioral. I don’t know how much of personal information the sites have access to, but once a cookie is dropped, they can track you everywhere you visit. The best way to avoid this is clearing cookies after every browsing session. However, each time you visit a site it will drop a cookie, so clearing cookies frequently can be taxing.

I don’t mind cookies because it helps save passwords and sites remember my login and information. As long as sites do not know who I am by name, I don’t care that they know which sites I visit. But you have to wonder, how much more advanced will these sites get, since they have access to so much information? Retargeting business models are becoming a commodity because it is easy to do, cost is low, and there is very little differentiation among vendors. If there is any advanced capability, it is easy to replicate. Vendors have to be smart and devise advanced ways to target and segment, which requires consumer information.

Recently, it was made illegal to pass credit card information automatically. For example, some sites use Webloyalty where at the end of an online purchase, you can sign up for access to certain discounts and offers. Your credit card information will, in some cases, automatically be passed if you choose to sign up, and in some cases there maybe an automatic monthly fee. This is how you get that $9.99 free credit score charge monthly in your credit card statement!! It is now illegal to automatically pass credit card information, and the customer has to enter credit card info again after signing up – this serves as an additional layer to ensure that the customer is aware of the charge. LinkedIn does something similar and shady. You can sign up for a Pro account but you have to call to cancel and cannot choose the option to opt out of monthly automatic fee. I complained to Consumer Affairs and disputed their charge on my credit card. It is such a blatant manner to fool the consumer – clearly, if the consumer wants to sign up for a monthly service, he/she will do so. Removing that option just shows that the company is being greedy and does business in taking advantage of consumers.

There need to be legal rules and regulations around online privacy. There are always loopholes, but laws such as the above on credit card information force businesses to change their business practices and make them more compliant.

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Google, the apex of innovation

Google is my favorite company – it is THE apex of innovation. I truly admire the company’s ability to find ways to make more money and provide the best customer experience. It has been making great strides online, and its technology is second to none.

CPC-model is Google’s bread and butter. It started with an algorithm, and has grown into a giant empire. Last year, users were able to type a company’s name and a list showed up with the company’s URL directly in the search query options. While this meant that Google had to forgo CPCs, it provided for a much better customer experience.

In Nov 2009, Google introduced Sitelinks, which allows advertisers to add deep-links to the site on paid search ads. This allows for a more customized user experience, and allows advertisers to provide separate landing pages for each and hence increase qualified traffic and conversions.

In Nov 2009, Google also rolled out product extensions. Advertisers could display their product images in paid search ads.

Last year, Google started testing product listing ads on a CPA basis. If you searched for a product, say iPhone, Google showed ads for iPhone on the right hand side with product images from various sites/online sellers. Users tend to click on organic ads more than paid ads, and ads on the right hand side get even less attention. Having product images show up is an innovative way to increase (qualified) traffic and possibly conversions. We participated in the Beta and were happy with the results. Google talked about adding a promotion to product listing ads, but that has not yet materialized. Google performed various tests, and we never had visibility into any of them. The tests showed by as “Experiment 1” and so on.

This year Google unveiled its new look with several filtering options, and rose to the social media challenge by allowing Facebook and Twitter to show up in search.

Recently I noticed that ratings have started showing up on the right hand side for merchants. This is probably in beta, but its another way to increase clicks, CPCs, and conversions. The ratings are sourced from Bizrate, and I am willing to bet that they are being used from Google Shopping. Here is more information on ratings.

Google has also been using page recommendations at the bottom of search results. So if you type Groupon, you can see Groupon’s competitors at the bottom of the page.

Google has been using the Shopping data feeds in innovative ways for adding images to Google searches; I won’t be surprised if Google eventually does away with Shopping or finds a way to monetize that. Which is a pity because how will merchants justify investment in CSEs if there is no free Google or Bing Cashback anymore? CSEs will have to either reduce CPCs or do a damn good job of driving conversions to compensate for the cost. My peers and I find the CSE program to be the smallest and most expensive, but it is worth investing in because it drives a significant number of new customers. Whether the quality of customers is good is yet to be seen.

Google is trying to figure out how it can leverage its own real estate above the fold to make more money from merchants and yet not impact customer experience. Google never has a “me too” approach – it always stays miles ahead of the rest. Kind of like Amazon. A long time back I was asked in a job interview, “Tell me 3 of your favorite sites”. “Amazon” is always my answer. For the second site, I blanked out and said “Google”. My answer was declined because Google is not really a website, and I had to think some more.

Its amazing that Google never advertises — I remember the old saying that there is no need to advertise something good. Bing advertises on TV shows, online ads, etc., but their algorithm is so bad that I cannot bear to use the search engine. I tried using cashback, but for cashback alone because the search engine is far inferior. One smart thing Bing has done is showing up as sponsored listings on Facebook. So if you search for something on Facebook and scroll all the way to the bottom, you see Bing ads, not Google.

In the affiliate channel, Google has made many improvements to its interface used by advertisers and affiliates. I asked Google’s two biggest competitors —

• Competitor 1 – Google has made so many improvements to its interface. Do you have any plans to make such improvements to your interface? Their response – “We focus more on growing through affiliate reach and relationships than technology, so no, in the near future we have no such plans.” What a shame. If you cannot fulfill basic data needs without having to go through a complex process, eventually clients will switch. Why not focus on both and stay a step ahead of Google?
• Competitor 2 – How does your interface compared to Google? Their response – “Our interface is not as pretty”. Google’s interface is not pretty, just easy to use. Intelligent clients would never choose looks over ease of use and and business needs.

On the flip side, Google has certain processes in place and has streamlined all its newly acquired businesses. Which is good for Google, but not so good for clients. A lot of language in their contracts cannot be negotiated. Google is one of the few vendors that comes to meet clients in jeans, brings presentations on recycled paper even though they seem to be of poor quality, and they use both sides of the paper. Which is why I admire the company. Their employees do not need to bend over backwards for clients.

Google employees are happy people. They have a free cafeteria, can work from home, get maternity and paternity leave, and can relocate and still work with the same team virtually. The company truly cares about its employees. No wonder Fortune has listed it as the 4th best company to work for. However, I have heard that the company does not pay as much. And the titles are not as high. You may be a manager in another company and an associate manager at Google, although you have the same experience and possible same salary.

Google and Pixar are my favorite companies because of their innovation and creativity. I don’t hold Apple in as much regard because their technology is not as superior. I truly admire Google, and am looking forward to more innovation from the company.

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