A couple months ago I wrote a column about a potential showdown between privacy advocates and Web 2.0 supporters. I identified a crisis point being reached as behavioral targeting became more common and began influencing our search results. Of course, a large part of the functionality touted in Web 2.0 plans depends on the surrender of a certain degree of privacy.

My prediction was that it would case a temporary fuss, which would be picked up by some, but that for the vast majority of us, we would put aside our concerns when we realized the benefits of a better online experience:

“More and more consumer groups will launch protests. Politicians will sense opportunity and jump on their soapboxes. There will be a very vocal minority that will rail against this “Big Brotherism.” There will also be a group of advertisers that will continue to step way beyond the acceptable, using targeting to subvert the user experience, rather than enhance it, hijacking the user and taking them to places they never intended. This will add fuel to the fire. And because they’re the most visible target, the search engines will bear the brunt of the attack.

In the end, we’ll realize there’s much more pro than con here. Effective targeting will generally add to our experience, not take away from it. We’ll toy with trying to use a third-party privacy filter, but in the end, most of us won’t be willing to give up the additional functionality in return for maintaining an illusion of anonymity online. Much of the usefulness of Web 2.0 (I know, I hate the term too, but at least it’s commonly understood) will be dependent on capturing personal and click-stream data. We’ll give in, and the storm will gradually fade away on the horizon.”

Indeed, it seems that while the danger is certainly in the minds of privacy advocates and some legislators, most consumers don’t really care, despite the occassional horror story like the recent AOL debacle. Privacy Advocate Mike Valentine posted this comment after the column ran:

“I’ve been predicting the same approaching privacy storm for about 5 years now. After each breach of data in hack attacks, after ChoicePoint sold data to bad guys posing as customers (hmmm), after VA laptops are lost exposing veterans to identity theft, after AOL exposed private users search queries, and on and on and on. The storms never come, the public doesn’t care, the media reports the hacks, breaches, thefts, criminal activity and identity thefts and moves on because consumers simply don’t care until identity theft or public embarassment happens to them.”

Now, a new study from Choicestream seems to indicate I was on the right track. The number of respondents willing to share some information in return for a better experience rose fairly dramatically, from 46% last year to 57% this year.

The number willing to let a website track their clicks and purchases in return for personalized content climbed from 32% to 43%.

What’s interesting about this is that these numbers returned to the levels seen in the 2004 survey. 2005 definitely saw a heightened awareness to privacy issues that seems to be abating somewhat. But although consumers seem to be willing to trade off privacy, they do so grudgingly and with some concern. 63% of them are still worried about the security of their personal data.

I believe it’s a combination of convenience and blissful ignorance that’s keeping the privacy storm clouds from coming to a head. The reality is, like most things, we won’t impact the smooth sailing of our day-to-day lives unless we get burned. And then, we’ll be looking for someone to blame.