CPEX Develops Standards for Online Profiling

With the explosion in Internet commerce, online businesses are looking for new and more effective ways to reach customers. It's not enough to advertise; now they're trying to thoroughly know customers and anticipate their future needs. In response, marketing companies have developed tools to learn more about customers. Marketers want to know what sites customers visited and whether customers clicked on an ad for more information or purchase. The resulting information is mingled with data about the same customer from other sources and used to create an online profile. Marketers say they're personalizing the information offered to customers, making the web experience better.

Online profiling has been getting a lot of bad press lately. Even Commerce Secretary William Daley admitted that while he appreciated the advantages of e-merchants knowing his preferences, he had concerns about misuse of that same knowledge.

Following the recent Federal Trade Commission and Department of Commerce online profiling workshop, marketing companies are working together to develop self-regulation, such as the Network Advertising Initiative. Now, another group of Internet marketers are joining forces to create a standard for the creation, storage and exchanging of data about Web users.

The group is called Customer Profile Exchange (CPEX) and it brings together about 25 rival businesses. CPEX's announcement was made by Net Perceptions President and CEO Steven Snyder during the first Personalization Summit, held in San Francisco this week.

"Net Perceptions joins Vignette, net.Genesis and other leading e-customer solution vendors as a member of the Customer Profile Exchange working group, whose mission is to offer a vendor-neutral, open standard for facilitating privacy-enabled exchange of customer information across disparate enterprise applications and systems. This XML-based standard will incorporate both online and offline data to allow for a singular, holistic view of supply and demand chains, thereby allowing all primary business functions to collectively, rather than independently, grasp a customer's identity, behavior and needs," Net Perceptions wrote.

The consortium is chaired by Siebel Systems Inc., with net.Genesis and Vignette sharing the marketing chair.

"The most immediate benefits of a standard data model for a customers are clearly to the corporations, not to individuals," said Eric Schmitt, a Forrester analyst, in a Yahoo news article published Monday. "CPEX, by nature of the environment we're in now, is going to be under pressure to do more than develop this standard in an ethical vacuum. They'll be more sensitized to the privacy concerns."

Not completely enthralled with CPEX's vision is Jason Catlett, who told Yahoo, "There's an old saying that if you automate a mess, you just get a bigger mess. The sharing of personal information is a big mess in this country right now. That said, the CPEX developers are clearly thinking about privacy because they know it's a potential party-stopper."

Catlett is encouraged, however, by CPEX's plans. "I think it's a good idea if standards provide a way for companies to easily abide by fair information practices," he added.

The first version of the CPEX standard will be released in June 2000. Ongoing discussions about personalization can be viewed at www.personalization.com.