The idea used to be that you, the consumer, could shop around, compare goods and prices, and make a smart choice. But now the reverse is also true: The vendor looks at its consumer base, gathers information, and decides whether you are worth pleasing, or whether it can profit from your loyalty and habits. You may try to jump from site to site to hunt for the best buy, but that's time-consuming. And there are comparative shopping sites such as Bizrate or Nextag, but these can be tough to navigate, and companies are learning quickly how to game the system.
This all might make sense for retailers. But for the rest of us, it can feel like our simple corner store is turning into a Marrakech bazaar -- except that the merchant has been reading our diary, while we're negotiating blindfolded, behind a curtain, through a translator.
Considering the manic nature of retail and media competition and technological developments, this kind of marketing is likely to grow, and become more sophisticated. I've spoken to telemarketing executives who claim they can target TV commercials to specific households. It is even possible, they say, to digitally place different products or dialogue into the scene of a show. Sure, there are financial and technical roadblocks to implementing these customized commercials -- not to mention some charmingly old-fashioned concerns about privacy -- but I'll bet they're coming.
Certainly, being targeted by marketers has its benefits. I like getting coupons for my favorite breakfast cereal. I like Amazon.com suggesting films I might enjoy. And I like being treated well on the phone by a company that thinks I'm valuable. But I also like feeling that I'm in control of buying the product, not that the seller is choosing me.
In the early 20th century, "keeping up with the Joneses" was a real ideal, and it spurred consumption. But the mysteries surrounding database marketing will increasingly make us not so much competitive as wary: Are our neighbors getting a better deal not because they shopped harder or bargained smarter, but because of some database demographic we don't know about and can't fight?
Lack of knowledge breeds suspicion. A survey I directed this year for the Annenberg Public Policy Center found a startling degree of high-tech ignorance among Americans who use the Internet. Eighty percent of those interviewed knew that companies can track their activities across the Web. Yet a substantial majority believe, too, that it is illegal for merchants and charities to sell information about them, even though it's legal and goes on all the time. Sixty-four percent believe incorrectly that "a site such as Expedia or Orbitz that compares prices on different airlines must include the lowest airline prices." And only 25 percent knew that the following statement was false: "When a website has a privacy policy, it means the site will not share my information with other websites and companies." Our report calls for changing the Orwellian label "Privacy policy" to the more honest "Using your information."
We also call for merchants to be more open about their database activities. A friend of mine phoned Citibank about his credit card and got a representative from India who wasn't able to understand his problem. My friend had never before gotten an "outsourced" operator and, knowing something about databases, concluded that Citibank had pushed him down a notch in status, reserving the U.S.-based service people for better customers. The reality is, he knows nothing about how Citibank operates, and has no idea what it thinks about his status. My point is, precisely because he's Internet - savvy, he's automatically suspicious that information may be used against him without his knowing it.
We used to say, "My money's as good as anyone else's." But in the 21st century, that may no longer be true. My students can hardly remember a time before Internet cookies and frequent flying and preferred shopping. They and their kids will try to beat the system to get the best deals, all the while assuming that they don't know all the rules of the marketplace. They'll be automatically mistrustful. It's a new world out there.
Author's e-mail: jturow@asc.upenn.edu
Joseph Turow is a professor at the University of Pennsylvania's Annenberg School for Communication. His book on the social implications of database marketing is to be published next year by MIT Press.
