We’re still looking at Chapter 9 on e-commerce. My plan this week is to publish at least one post per day that extends the material that I posted last Thursday.
In my Thursday class, I mentioned web analytics as one popular method that e-commerce managers use to gather data about customers. There are a few legal ways of gathering this data, including web server log analysis, cookies, and programmatic methods. Web browse toolbars are another popular method of collecting this data. See slides 11 and 12 in this PPT that I originally posted last Thursday.
However, it’s much easier to get this data from a trusted source: an Internet Service Provider (ISP). Most residential customers use an ISP to access the internet. It’s trivial for an ISP to collect information about the web sites and pages that each customer visits.
Most customers don’t have a clue that, when they signed up for internet service, they also authorized their ISP to sell information about their internet activities. The legal notice is usually buried deep in the contract or a privacy notice, and US regulations require little if any disclosure to residential customers.
Wired magazine has been following this trend, and has two interesting reports from Ryan Singel. Friday’s report discusses a presentation by David Cancel about clickstream selling, as the practice is called. Jeremy Rainer posted a follow up interview with Cancel here. Cancel is also the CTO of Compete Inc., a major US web analytics firm that works with a wide range of major US ISPs and US advertisers.
When ISPs sell this clickstream data, they can add $5 of margin per subscriber to their value chain. Of course, ISPs love this found money. This additional revenue is a convenient way to accelerate the ROI for new lines, equipment and services. Selling clickstream data has quickly become a key success factor that major ISPs ignore at their peril.
Some ISPs might pass clickstream revenue along to customers as discounts, if these firms face pricing pressure in their market. On Oahu, Clearwire has gained several points of market share in the last 6 months, mostly from former customers of Oceanic Time Warner or Hawaiian Telcom.
Today’s report has a long list of questions that Singel sent to major US ISPs about their clickstream selling activities, focusing on privacy and legal issues. Outside the ISP and web analytics industries, few people know much about this data. Is it anonymized so that user names are not associated with details about their web site visits?
The Seattle Times reported yesterday that most digital photocopiers save images to their hard drives.
These copies are more commonly seen in large offices, but as their pricing drops, small offices and shops have been installing these digital models.Now that I think about it, it actually makes sense that the new generation of copiers use hard drives to make the copying process faster.
After all, these copiers work like a computer. The copier takes a massive digital picture of a document, and then uses a laser printer to output a paper copy that’s much clearer than older copying systems.
The hard drive reduces the cost of the digital copier. It would be expensive to store the digital picture in RAM. Hard drives tend to be more durable than RAM, also.
This copying method is also used in the small “all-in-one” units that I’ve seen in many homes. The scanner/printer uses the computer’s hard drive to store the image. For many home users, this method is very convenient, and less expensive than going to Kinko’s or using their office’s copier.
This technique is also handy in high-volume commercial copiers - the kinds large businesses use to produce dozens or hundreds of copies.
While Sharp has rolled out a kit that will wipe or encrypt its’ copier hard drives, most manufacturers haven’t done the same with their models. So a clever identity thief could open a copier, grab the hard drive, and have access to hundreds or thousands of old copies.
If any of these copies show a birth certificate, passport number, or account number, the identity thief can use that information.
Better yet, a police investigator could take an unencrypted hard drive and search it for evidence in a case.
As I’ve said before, the only method I know for removing data from a hard drive is to remove the drive, grab a big hammer and beat the drive into a mangled mess of metal.
In IS 6100, we’re looking at e-commerce and chapter 9 this week. I’ll be posting a few articles that extend the book’s discussion, and help us move towards the final exam. As a reminder, my first post about the IS 6100 final exam was on March 1, where I focused on what CIOs really do.
I made my first online purchase in June 1987 on CompuServe. It was a compact disc that I couldn’t find in the local record store. CompuServe’s interface was good old text. No pictures, no hyperlinks. Customers had to be very motivated to make their purchase online. It’s funny what a good album will make people do.
Of course, today I can go to Amazon.com, Google, or eBay and find the same album in under a minute, and at a much lower price than I paid in 1987.
Ten years later, I heard about Jakob Nielsen. I was teaching web site design courses for a training company, and I was a bit frustrated. The course materials I was using didn’t really discuss how web sites could be designed to improve online sales. Nielsen’s site, useit.com, was one of the few places I found that had a credible, ongoing discussion of web usability.
So I was excited to see Jakob’s most recent article, posted on March 12. He addresses ROI and online usability by discussing a 10-point action list for online marketers.
ROI is a major concern for CIOs. IT departments have to balance the financial investment in information systems against the additional revenue generated by these projects. ROI is one way to measure these returns, by expressing change in a simple financial ratio. Our textbook has a very brief discussion of ROI on p 275 in chapter 7, but I’ll be posting some more materials before the final exam.
Nielsen had previously addressed ROI and usability in January 2003, in a post that summarized his 110-page research study. When MSIS students ask me why they need to understand research, I’ll be sending them to that page. The report itself costs US$122 and no, I don’t have a copy that I can send you.
I have issues with some of Nieslen’s newest findings. For example, he suggests using e-mail newsletters to help keep customer attention focused on the site, and away from search engines. I prefer RSS, as that technologies lets customers opt-in and opt-out very easily. Some customers still use the ‘report spam” buttons in the e-mail clients when they want to unsubscribe from an e-mail newsletter. If too many customers do this, ISPs might start blocking the e-mail newsletter to all their subscribers.
It’s expensive to attract a new customer. Frankly, I’m stunned when web sites force me to register before I place an order or request a shipping estimate. However, sites that let current customers reorder previously purchased items easily have an advantage over other sites that force customers to search for spare parts, refills and replacement items. On the other hand, I get really annoyed by sites that send me reminder e-mails to reorder and ‘save now’, especially when there’s no easy way to unsubscribe from these messages.
My eyesight isn’t very good. Nielsen makes an excellent point when he recommends that e-commerce sites design their pages for older customers and people with disabilities. Older customers tend to have more disposable income than younger customers. Sites that are designed for ADA compliance tend to be easier to navigate, especially on a smaller device like a phone or PDA. I find too many web sites that are designed for specific screen resolutions and web browsers. Usually, the owner or a marketing manager has decided that the site needs to look good on their computer, and the customers are left out of the equation. that’s why usability testing with real customers is so important in e-commerce. I really have problems with web sites that have huge graphics or are designed with Flash, as I can’t see these sites on my PDA.
Search is a valuable feature that is often overlooked in site design. Managers and developers sometimes forget that users want answers quickly. For example, Campus Pipeline has no search feature in its current implementation at HPU. Instead, there’s a jumble of graphical menu buttons and tabs.
I included search in this blog because too many students complained that they couldn’t find articles quickly in my old Bloglines site, as i noted on January 23. Search is a key success factor for any e-commerce site that offers more than a few products. If customers can’t find your products, they probably won’t buy anything.
If you’ve been following this blog, you probably know that in most of the US and Canada, Daylight Savings Time goes into effect this Sunday, March 11. The Associated Press reports that IT managers and staffers are still working to patch hardware and software.
Meanwhile, according to CRN, computer and technology resellers are lambasting Microsoft for the software company’s sluggish development and release cycles for DST patches. Sun also announced that certain versions of Java may not handle time correctly in the Hawaiian, Pacific and Eastern time zones.
I received an e-mail today from MSN Direct about the DST settings for my watch. Yes, I wear a Microsoft watch. Among other features, the watch will display multiple US time zones, and it will set the correct time automatically. MSN is sending out a patch this weekend to fix the DST issue, using the service’s FM radio system.
Here are my other DST posts in this blog:
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