Perks Vs. Privacy

Perks vs. Privacy: Users Opt-in For Deals

While Facebook's amorphous privacy policy and byzantine sharing preferences have many social media users on the defensive, other startups are cashing in by offering kickbacks for users willing to share their information. Foursquare and GoWalla first began building buzz with their partnerships with big name companies like Pepsi and Starbucks, who offer users perks and discounts if they check-in nearby. Even non-commercial ventures are cashing in on location-based mobile marketing. For example, VisitPA, the tourism board for Pennsylvania, is enticing tourists to historical sites with custom Foursquare badges for check-ins at places like Gettysburg ("PA 4 Score & 7") and regional restaurants ("PA Shooflyer").

Investment from institutions and nationwide advertisers broadcasts an interesting bet on how closely consumers guard their personal data. The theory: consumers will gladly give up their data as long as there is something in it for them (i.e. discounts and free stuff) and the sponsor relationships and harvesting methods are transparent. Privacy issues have been a public relations disaster for companies like Facebook because of the perceived lack of these qualifiers. A recent leaked chat log from six years ago reveals Facebook Founder Mark Zuckerberg flippantly mocking the trust that Facebook users placed in his hands did not help the social media giant's image. Even Google, which sprung its controversial Buzz web application on an unsuspecting public earlier this year, has received significant backlash from users concerned about personal privacy.

With such public outcry over privacy, it seems that networks such as Mint, an online budgeting service, and WeShop, a platform which anonymously shares purchase information with vendors and merchants, would be doomed to similar stigma. But they aren't. The difference is transparency. Mint analyzes your financial data--including credit card statements, savings accounts and even home mortgages--and suggests "ways to save" which includes products from sponsored banks as well as non-sponsored banks. As a sign of good faith, Mint points out the ones that they have relationships with and lists competitors at the top if they have better offers. Since this arrangement was made clear from the beginning, very few users feel violated by the harvesting of information. Similarly, WeShop, which is still in beta, is completely up front about the way it works and offers mutual benefits to both shoppers and vendors by giving (theoretically) impeccable product recommendations, much like Amazon and Netflix do now.

The success of these social media marketing initiatives remains to be seen. But one thing is clear: users are feeding more types of information into the vast aggregable web in greater and greater volumes. Where we once submitted only vague television watching data from random samples via those mysterious and thinly-scattered Nielsen boxes, we now willfully submit information regarding our spending, eating, investing and social habits with startling detail. For companies who've historically spent billions of dollars on market research, this a gold mine waiting to be gutted. As we've learned from Facebook and Google, doing so in ethically without alienating key audiences will be instrumental to the success of recovering this latent value.

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