Saturday, April 17, 2010

Do Coupons Invade Users' Privacy?

Do online and mobile coupons invade users' privacy? The New York Times reports that by using unique URLs for different offers and customers, the agency that manages the coupon offers on behalf of retailers can capture details about each coupon user: search terms used to find the offer, how to contact the user (for a thank-you or a follow-up offer), whether the user clicked on a banner ad or a search link, even Facebook IDs if the user has joined a company's fan page.

"When someone joins a fan club, the user's Facebook ID becomes visible to the merchandiser," says the co-founder of RevTrax, the agency behind these smart coupons, speaking to the NYT. "We take that and embed it in a bar code or the promotion code." Among RevTrax's clients are Sym's, Filene's Basement, and RiteAid.

On RevTrax's web site I found a link to a guest commentary in Chain Store Age by the co-founders: "How to Save Money and Control Coupons by Switching from Direct Mail to Digital." The main point is that marketers should make it quick and easy for shoppers to use digital coupons.

However, it seems that shoppers have no idea that so much of their online behavior is so easily accessible to marketers when they click on a coupon. Here's how one online advertising expert described the coupon data in the NYT article:
"It's almost like being able to read their mind, because they're confessing to the search engine what they're looking for."
This is where transparency comes into play: Marketers need to clarify exactly what information is being collected and how it's being used. Otherwise, there will be an ugly backlash if and when consumers find out that in exchange for saving $5, they're giving up a lot more information than they ever dreamed.

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