Mainstream media has made a habit out of talking about audience targeting. As a result, all this chatter has stirred up the privacy pot and fueled the debate between privacy advocates and the digital marketing industry. Now, marketers and industry partners walk a fine line between leveraging data for more effective audience targeting and ensuring consumer privacy protection. As an industry, we should understand the lessons learned in dealing with privacy issues. Companies like Netflix and Amazon leverage data to reach consumers with relevant information. However, both of these companies provide a data-driven customer experience that users find delightful rather than intrusive. The reality is that consumers do see Netflix and Amazon recommendations as valuable, relevant information. Consumer delight features like these can be executed in a privacy friendly form of interest-based technology. Netflix and Amazon use collaborative filtering technology in their recommendation engine. Since this technology primarily works by extrapolating large numbers of data about people sharing similar product interests, it presents the recommendations to consumers in a social influence metaphor. Psychologically, this can be comforting to consumers because they associate this culturally with belonging to a group. Just as its important to create a high value exchange, it’s also import to understand how rules limiting data collection can be counter-productive and that it’s not only the government pressure that we should worry about; losing consumers’ confidence or trust would be the most devastating to businesses. For the full story, read Xuhui Shao’s latest column, Walk the Line on ClickZ.