I personally don’t get that worked up about consumer privacy. It seems like every day there is a new “scandal” about some company storing, scraping, selling, cookie-ing personal data. But I just don’t get it all the fuss.

First of all, who cares what companies and marketers know about you? I haven’t heard any decent articulation of the downside, or what everyone is so afraid of. I’m 100% behind privacy that protects us from identity theft and unlawful searches, but what terrible things would happen in a world were every business was able to track and sell whatever data you gave them about your consumption habits?

In fact, this sounds fantastic to me. Right now I’m bombarded with a ton of useless marketing. I have zero interest in buying a car or home or opening an IRA right now and I would love to be able to just raise my hand and swap Geico and Ford commercials for marketing of new travel apps, ski packages and micro-brews. Hulu Ad Tailor is a decent try at this, but even though I answer all the questions, I haven’t seen any material decrease in stupid truck commercials.

The fact is, we get a lot of sweet software for free these days. Gmail and Facebook are incredible tools given to millions of people for free. The opportunity cost of this is enormous (I can’t even imagine how much I would pay as a monthly fee to use Gmail if there were no free ad-driven alternatives, but it would definitely exceed my egregiously large AT&T bill and I literally can’t even conceive of how much I would pay if Google search was paid only). The deal is, they offer you a service which helps them learn more about you and sell higher value ad impressions. That’s the compact we make and frankly it’s a pretty good trade for consumers. Why then should we draw arbitrary lines about how much personal data is allowed to be monetized?

If, however, you don’t feel like this is a fair deal. I have a strategy for you. Rather than spending exorbitant amounts of taxpayer money on court cases attempting to continually clarify the foggy dividing line of what consumer data is private, just pay for your software! I am a very happy consumer of the premium offerings of Evernote and Spotify which, in addition to increasing the feature set, does away the need to make ad revenue from me eliminating the incentive to extract consumption data from me other than what directly improves the quality of the software. Don’t like Google tracking your search data? Just pay the $10s of thousands per year you would need to get a Bloomberg, Lexis Nexus, and GLG account and the multitude of other services to get the same level of access to information without the ads.

With things like search and social networks, I think it’s a very fair trade to offer up my consumption data and attention to ads in exchange for really powerful and useful software for free. However, I would love it if more services forwent the ad-driven approach in favor of just getting customers to pay for a useful service. This almost certainly leads to a better product since the company only serves a single master (the paying customer) rather than trying to balance the needs of both marketers and users.

What do you think? Is it a fair deal to trade our privacy and attention for free software?