Personal privacy in the era of the Internet of Things
Are you sure you want to keep that private?
In a previous post, I discussed the Google announcement of Brillo and Weave and briefly touched on the notion of privacy, which was in the headlines because of a recent speech given by Apple CEO Tim Cook, where he “lashed out at Internet giants and government, calling them out for undermining constitutionally-guaranteed rights to privacy." Technology and the concept of personal privacy have historically been intertwined, and with the emergence of the Internet of Things (IoT), the notion of personal privacy will be tested yet again.
IoT will generate vast amounts of data on usage patterns, consumer behavior, likes and dislikes. After all this information is collected and analyzed, it could lead to significant improvements in marketing, advertising effectiveness and greatly improved return on marketing investment. However, that IoT data linked to marketing and sales directly threatens digital banner ads, Google AdWords and social media advertising platforms. I would point to recent strategic partnerships between SAP and Salesforce.com and Jasper Technologies as evidence. Adobe and Salesforce have both launched IoT and enterprise mobility management efforts, with Mark Benioff going on record in 2013 about the transformative effects of IoT data married to sales and marketing technologies.
Lastly, it's important to note that the global digital marketing market is forecasted to be worth 1.1 trillion by 2020.
These smart, connected products may enable manufacturers to form new kinds of relationships with their customers and end users—relationships that require entirely new types of marketing practices and skill sets. As companies accumulate and analyze product usage data, they will gain new insights into how products create value for customers, allowing better positioning of offerings and more effective communication of product value to customers. Using data analytics tools, firms can segment their markets in more sophisticated ways, tailor product and service bundles that deliver greater value to each segment and price those bundles to capture more of that value.
The concept of personal privacy
If IoT can truly deliver on its promise to improve the everyday life of the individual through concepts such as the connected home, the connected vehicle or even the connected product, users must acknowledge that a sacrifice of some personal privacy is to be expected. To benefit from the connected vehicle, one must be willing to share the recorded data collected on driving behavior. In order for the connected home to truly work in harmony, some organization must have access to the details of how the home is lived in.
So let’s talk about privacy. What is it? When did it start? How has it changed over the years?
The concept of personal privacy and the right to control one’s own personal information is seen throughout the world as a fundamental right and incontrovertibly true—with little opportunity for debate.
Yet the contemporary notion of privacy emerged in the late 1600s in Britain, when the chimney was invented, allowing one-room houses built around a central fire to expand. Walls were crafted to form rooms that soon were built for purpose. Public rooms like a living room were for gatherings, while bedrooms and bathrooms were for more private, intimate happenings. The widespread concept of personal privacy can be traced to the emergence of personal living spaces.
The home is a place for privacy, which that seems normal; perhaps that’s why we cling to our right to privacy so tenaciously. We assume this has always been the case, yet that assumption is incorrect, and its relatively modern appearance is due entirely to technology.
Personal privacy took another leap forward when Kodak invented a cheap and mobile camera, allowing anyone with enough money to purchase one the ability to snap pictures anywhere. In the late 1800s, two lawyers published an article in the Harvard Law Review in response to being photographed in Boston’s gossip magazines. That article gave birth to the idea of privacy as a right, protected by law. Eventually, the courts—to protect the individual from the modern press—extended common law to protect privacy. “The right to be left alone” as we know it today is largely cemented in law.
The value of personal privacy
The irony is that each new chapter in the history of personal privacy is written in response to technological innovation, while it was technology itself that formed the initial concept. Technology created personal privacy; it helps protect personal privacy in some situations while threatening it in others. In 2010, Mark Zuckerberg was quoted as saying that privacy is no longer “a social norm.”
It is certainly in Mr. Zuckerberg’s interest to promote an anti-privacy social norm, yet this raises the topic to the level of public debate, which is important in my view. What do we sacrifice in our quest to preserve our own personal privacy? In our vigilant pursuit to keep our private information safe, we essentially transfer its value from ourselves as the owners to the individual or organization that’s most able to acquire it.
Perhaps we should reconsider the value of our privacy. Market research is a multibillion dollar industry, where groups of the population are studied to make predictions. Movies are tested, candidates conduct likeability polls and products are introduced to sample groups. But I’m very interested in ensuring the movie I watch is a movie I’ll enjoy; I want the makers of my household possessions to improve their product; and I’m compelled to make my tastes and preferences known if it results in organizations being more likely to match them with the products and services they offer.
By making our personal information private, we simultaneously make it scarce. Scarcity drives up price—so our private information is very pricey. Multibillion dollar companies exist because they can capture our personal data in exchange for a service, and the most successful companies in this business are the ones that exchange a service at a far-lower value than the data they’re able to extract in return.
We seem confused by the contemporary notion of privacy. We allow our emails to be scanned and used for marketing purposes, our search history is recorded and GPS data is collected, all to develop a deep behavioral understanding of the individual. Evidence of this confusion was shown in a survey by Lorrie Candor and Alecia McDonald. The survey’s results stated that only 11 percent of Americans would be willing to pay $1 per month to withhold their data from their favorite news site. Alternatively, 69 percent of Americans were not willing to accept a $1 discount on their Internet bills in exchange for allowing their data to be tracked. Basically, if people think a website is collecting their data, they aren’t willing to pay $1 to stop it. But if the same website isn’t collecting data, those same people are willing to pay $1 to stop it from happening. Fascinating!
I find this to be a complicated issue, but one that is largely misunderstood by the average technology end user. At IBM, we’re not in the business of trading in personal privacy. Our approach to the Internet of Things is to help organizations build their own IoT businesses with cloud computing, analytics, big data and deep industry experience. IBM’s go-to-market is specifically based on solutions meant for the industry, leveraging two of our most valuable assets: world-class enterprise software and a top-notch employee base with significant industry specialization and focus.
Privacy is a sensitive issue, there’s no debating that. What are your feelings on the matter? Agree? Disagree? Feel free to reach me @peter_ryans or on LinkedIn. I’m looking forward to hearing your feedback.