Frank Catalano

Frank Catalano: Every few days there’s a new uproar, twitstorm, or blogviaton about what Facebook, Google, or another web service is doing with our private information. “Why is our personal identity a marketable commodity?” sounds the anguished, angry cry.

As a marketer by trade, having worked with organizations as diverse as Apple, McGraw-Hill and the Toy Industry Association, I can sum it up in six words: We are addicted to free shit.

Wanting something for nothing is human nature. Some say it has its modern roots in the Irish Hospitals’ Sweepstakes, the famed lottery established by the Irish Free State in 1930 to fund medical facilities and later shortened to, and known the world over as, the “Irish Sweepstakes.” But that required buying a ticket. I think the precursors to today’s angst date to the 1960s when first Reader’s Digest and later Publishers Clearing House launched what eventually became multi-million-dollar sweepstakes as a way to sell magazine subscriptions.

The key phrase is “something for nothing” because the reality is “something for apparently nothing.”

That “apparently” is your personal -- and many would claim private -- information.

We have, as a culture, been trained to cough up privacy to marketers in exchange for free. A half-century ago that meant simply giving up our name, address, phone and expressed interest for a shot at cash or other fabulous prizes (and a subsequent blizzard of marketing pitches). It progressed to giving up our detailed travel and purchase habits to loyalty program marketers in return for phantom points that we could use for free airfare and hotel stays.

Now we provide an even more granular level of personal detail almost without thinking. We register with the New York Times to read articles, we establish a Gmail address with Google to send and receive e-mail, and we sign up with Facebook to connect with friends and spend countless hours doing non-productive farming without even the hope of government subsidy.

In exchange, the registration-required news outlets get our interests for e-mail marketing, Google serves ads based on the actual content of our messages, and Facebook ... it’s virtually impossible to figure out what Facebook is doing. But it has to do with side navigation ads that don’t allow me to mark them as “stupid.”

In short, we are voluntarily giving up enough private data about ourselves to let companies create entire business models. We have allowed for a personal information economy.

It’s the new setup to the old punch line, “We’ve already established what you are. Now we’re simply negotiating the price.”

The inherent problem is the directly opposing desire for greater privacy with the expectation the web will provide free digital stuff without consequence. It’s cognitive dissonance on a pixelated scale.

Three ways consumers can equalize the equation?

1. Lie. Provide false information when you have to register for a free digital service. The problem is that with required e-mail confirmations, you have to provide at least a little real information and the more false information you provide, the more annoying the attendant targeted marketing is likely to be. It’s also, well, dishonest.

2. Hide. Don’t use the Internet. (Sorry. What am I thinking?) Or hide behind technology, such as disposable e-mail addresses, proxy servers and commercial privacy services. Steven Sprague, president and CEO of Wave Systems, went as far at last week’s FiReGlobal West Coast conference in Seattle to suggest the future lies in developing methods for people to encrypt individual tweets and Facebook status updates so you can be certain they’re only read by the people you want. The downside, Sprague admitted, is that, “It kind of messes up their financial model.” Which probably means a free service won’t stay that way.

3. Think. Deal with it. Think before you share the information. Always remember that even if no money changes hands, this is an economic transaction between a buyer and a seller. An informed seller has an advantage.

Speaking as a marketer -- and as a consumer -- I’m in favor of the third option. It keeps the digital services in business that we increasingly rely on and fairly puts some of the onus on us. We all should weigh how much personal information we’re willing to give up for the goods or services rendered. That means insisting on clear, understandable privacy disclosures, safeguards and controls. And a willingness to accept less free stuff if one is willing to “pay” less.

In other words, do what any good consumer does when faced with a bad deal: be ready to walk away.

Your privacy is a currency. Make sure you’re getting your money’s worth.

Frank Catalano is an author and consultant on marketing, branding and product strategy for education and consumer technology companies. He blogs at Intrinsic Strategy and tweets @frankcatalano. Opinions expressed in guest posts are those of their authors, and don't necessarily reflect the views of TechFlash or its staff.