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2005 Privacy & Marketing Predictions

2005 Privacy & Marketing Predictions Alan Chapell

I hope everyone had a great new year. My holidays were spent with family and good friends. And I hope all of you did the same. Anyway, I'd like to share with you all some of my predictions for online marketing and privacy -- the Chapell view for 2005.

Adware and Spyware: In 2005, the industry will solidify the definitions for the terms "Adware" and "Spyware." I think that Claria and WhenU have done a good job differentiating their offerings from the rest of the pack. And that’s a good thing for them. The issue with adware has not been centered upon whether or not it works. Many marketers will swear to its effectiveness. The issue for most marketers has been whether they want their brand associated with the very things that are frustrating their customer base. I would look for many more adware firms to seek ways to be perceived as trusted advertising partners by revamping their policies and submitting to privacy audits. Those who are unsuccessful or unwilling to differentiate themselves will be relegated to low advertising rates and/or risk extinction as a result of legislative or market forces.

User Generated Content: We’ll see a continued increase in User Generated Content (UGC) in 2005, as many companies struggle with how to leverage UGC. Many companies will begin their own Weblogs in an attempt both to facilitate and to control some of the UCG on their brand. But very few companies will do a good job understanding, leveraging and learning from all the UCG out there.
Online Regulation and the Dormant Commerce Clause: We’ve seen dormant commerce clause claims pertaining to Utah’s anti-spyware statute, Pennsylvania’s Child Pornography Act and, most recently, regarding Maryland's 2002 Commercial Electronic Mail Act. Do states such as California have the right to protect their own residents’ privacy if it impacts interstate commerce? In the next 12 to 18 months, we will begin to obtain some clarity regarding the impact of the Dormant Commerce Clause over state regulation of online commerce. OK, this one is more prayer than prediction, but things are going to get mighty sticky for those of us trying to comply with the law if something doesn’t happen soon.

Consumers will not embrace the wireless directory: There was a big fight between privacy advocates and the wireless industry in 2004 over the creation of the wireless phone directory. There was a good deal of energy expended in these discussions. However, what has not been thoroughly discussed is whether or not consumers will see value in the wireless directory. I tend to think that they will not. For one thing, if the directory is constructed on an opt-in basis as currently planned, I don’t think enough consumers will participate. Case in point -- last year, a survey conducted by the on this one. Although I think there are a few leaders in the space, the technological differences between many of the ESPs are fairly insubstantial to many email marketers. As a result, there’s going to be additional consolidation in this space. Look for some of the large data companies to either buy their way into this space (a la Experian and Cheetah or infoUSA with ClickAction and Yesmail) or figure out ways to augment their existing technologies and client bases through acquisition. Also, I wouldn’t be surprised to see at least one of the agencies augment their offerings in this space.

HR 2929 will become law, but will prove not to spell the end of the third party ad servers, analytics and behavioral targeting companies: We’re not even a week into 2005, and Congresswoman Bono has already resubmitted the now infamous bill, HR 2929, also known as the Spy-Act. As many of you know, the original bill, which passed the House in the fall of 2004, did not clearly distinguish between first party and third party cookies. And as a result, third party ad servers, analytics and targeting companies could find their business models significantly hampered under the ambit of HR 2929. My prediction is that as a result of fantastic lobbying and education efforts on the part of many within the industry, some type of third party ad server provision or exception will be added to the bill. If this happens, the calamity predicted just a few months ago will be averted.

Once again, a very Happy New Year to all. If you haven’t already, please give what you can to the tsunami victims. Peace.

Alan Chapell is a consultant focusing on Privacy-Marketing -- helping companies understand privacy and incorporate consumer perception into product development. He has been in the interactive space for more than seven years with firms such as Jupiter Research, DoubleClick and Cheetahmail. Mr. Chapell is the New York Chapter Chairman of the International Association of Privacy Professionals, and he publishes a daily blog on issues of consumer privacy.

Chapell & Associates is headed by Alan Chapell. In 1997, Chapell founded the privacy program at Jupiter Research, an internet research firm focusing on the consumer internet economy. During his four and a half years at Jupiter, Chapell also...

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