Social media has revolutionized the way people share information. Social media users are posting information about themselves on a plethora of networks, creating a record of their likes and dislikes, their habits and interests, places they visit, and more. And according to Nielsen research, four out of every five active Internet users visit social networks and blogs. That adds up to a bounty of customer insight waiting to be harvested.

Increasingly companies are doing just that: using social networking sites to learn more about customers and prospects, so they can deliver more targeted marketing. However, these firms must tread carefully and respect customers' privacy, or risk a customer backlash.

A recent Poll Position survey reveals that nearly 70 percent of U.S. Facebook users are comfortable with the personal information they share on the network. Yet, research by Barracuda Labs found that more than 50 percent of social media users in 21 countries are unhappy with Facebook's privacy controls; and 30 percent and 29 percent of respondents are displeased with the privacy controls on Twitter and Google+, respectively. Although LinkedIn appears to be the most trusted social network, 25 percent of respondents voiced unhappiness with its privacy controls. The discrepancy in consumers' willingness to share personal information with their concern for privacy is where the challenge lies for marketers.