You don’t own your online identity: This lead-gen tool caused a “growth hacker” to cry foul

By Michael Carney , written on December 11, 2012

From The News Desk

What is a reasonable expectation of privacy between consumers and the websites they visit? For example, when a user visits a site but does not log in or voluntarily supply any personal information, should they expect to maintain their anonymity? Despite the best wishes of many casual Web surfers, this is often far from the case.

A little known category of service providers offer website owners “marketing intelligence” that can include the names, email addresses, and places of employment of the visitors to their sites. It’s obvious why consumers would find the practice upsetting, but there’s little arguing the potential value to companies in being able to identify and then market to these hyper-targeted prospective customers. It’s incredibly revealing to know that a potential customer (or competitor) was poking around in your services page.

Surprisingly then, when PandoDaily learned of the methods of marketing intelligence”firms, it was from the founders of one Silicon Valley startup that is adamantly opposed to the practice. We received an email earlier this week from self-proclaimed “growth hacker” Darren Nix of popular commercial real estate marketplace startup and Y-Combinator alumni 42Floors that read:

"We were recently pitched a service that startups are using to identify their anonymous site visitors with name, email, and company -- we were shocked and very concerned."

(Although 42Floors was unwilling to reveal the name of the soliciting firm, we were later able to independently confirm it to be LeadLander.)

For the uninitiated, the term “growth hacker” refers to someone who is an expert in viral marketing and customer acquisition during the rapid growth period of early stage companies. These are not subtle, or shy people. So for someone in Nix’s position to be surprised and turned off by an online marketing technique, it would have to be extremely unsavory. As he would soon find out, this one most certainly is.

After a back and forth email conversation with the owner of LeadLander, Nix was able to confirm how the service works. It all starts when a visitor fills out a contact information form or clicks on an email sent by one site in LeadLander’s network of sites – which presumably consists of thousands of sites, given that the company has been around since 2004 and has between 11 and 50 employees according to its LinkedIn profile. Then when that same user visits any other site within the network, their contact information is available to the new site, regardless of whether they re-entered it anywhere or intended to share it with this site.

Even with this explanation confirming his initial fears, Nix wasn’t convinced that it was possible, or that the company could deliver as promised. To test the claims, he “signed up for a demo account and installed (and hastily removed) the tracker,” according to a blog post published on the matter. Without fail, Nix began receiving personally identifying information about 42Floors’ anonymous visitors.

To reiterate, for a company like 42Floors that is looking to acquire new customers online, this would seem to be a valuable service. So, why would they turn down the qualified sales leads? “It’s simple. Respect your users,” Nix says. He describes the realization the he’s being personally identified while surfing online as “deeply unsettling,” and expressly states that 42Floors has decided not to use any visitor identification tools.

Nix’s post on the 42Floors blog outlines a very plausible, yet unsettling offline analogue which should clear up any ethical confusion around the matter in its more nebulous online sense:

"You drive to Home Depot and walk in. Closed-circuit cameras match your face against a database of every shopper that has used a credit card at Walmart or Target and identifies you by name, address, and phone. If you happen to walk out the front door without buying anything your phone buzzes with a text message from Home Depot offering you a 10% discount good for the next hour.

"Farfetched? I don’t think so. I expect to see the first iterations of this Home Depot scenario become reality within a few years time. All the necessary pieces already exist, they just haven’t been combined yet."

Unfortunately, Nix is likely right. Not all companies, either online or offline, operate with the same strong conscience as 42Floors. LeadLender is also far from the only service provider in the space. There are comparable, although not identical, services offered by ReLead, NetFactor, LeadFormix, ActiveConversion, Eloqua, and others. The fact that so many of these companies exist, and more explicitly that 42Floors received identifying information on visitors to its site during its brief trial, mean that there’s demand in the market and other sites are actively using these services.

[Photo credit: Joseph B- on Flickr]