Wednesday, December 08, 2004

Has Competitive Intelligence Gone Too Far?

Companies today recognize the dynamics of the new digital economy: customization, digitization, personalization, Just-in-Time processes and lack of inventory. In their bid to leverage the new model to their benefits, companies have found the Internet to be a reliable and efficient information arbiter. Gathering data about the consumers' behavior to gain competitive intelligence is the first priority for most of the enterprises. While the traditional methods of soliciting information such as surveys and questionnaires are pretty much still there, the Internet has made these largely obsolete by providing information that is just a click away. Although market research firms such as Forrester and GartnerGroup, Internet detective agencies and search engines can accruately yield consumer information, these were not enough.

The lust for a share of the electronic pie forced companies to take the market research to the next level by introducing questionable techniques such as the adwares and popup advertisements while surfing the Net. Whereas the marketing research firms use authentic ways to solicit information, the end-users are negatively affected by the proliferation of malware. It has also costed billions of dollars in lost revenues to companies.

The spread of adware is probably the most infamous means of gathering consumer information. By exposing the end-users to frequent advertisements, recording the clicking pattern and sending it to a remote location, companies can quickly and cheaply create consumer profiles. But where do the consumers fit into all of this? Do they have anything to gain with this sudden and extreme intrusion of privacy? They may - in the form of better services which could even be free- but a violation of personal space is hardly the price that the consumers should be made to pay. Besides, apart from a relatively small number of genuine intelligence accumulation efforts, most adware programs today are equipped with malicious code that propagate viruses.

The race to outcompete the rival has not spared even our inboxes. Gmail's main source of revenue is the targeted text ads which are relayed after scanning an individual's email content. Though not the sole ethics violator, Gmail's extremely bold stand is just incredible. While the industry heavyweights have always used some means of scanning an email message - the junk mail filters would seldom work without such scans - it has always been a hush hush affair. Come Google and we hear of scanning as part of the official marketing pitch!

The latest craze is about weblogs. Weblogs are largely of a personal nature. As such, companies can easily form and maintain consumer profiles, all without you ever knowing about it. The companies that used to spend millions of dollars on market research and paid for each consumer survey answered have to just click the mouse button today.

The interesting thing to note is that it is not only the companies that try to solicit information. More and more online consumers are increasingly contributing their information willingly at various web sites. In a recent study by Pew Internet and American Life Project, more than half of all web site visitors contribute by providing personal information, taking surveys or offering feedback in some other way.

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