Note Previous Page Observer Effect
Someone's only got to produce a video camera and Dave goes into his routine...Just as advocates of an "ethnographic approach" (such as overt or covert Participant Observation), argue that interviews are inherently biased because of the nature of the relationship between the participants, critics of overt participant observation argue it is impossible to openly observe people's behaviour without somehow changing that behaviour. 

Thus, if the knowledge of "being openly observed" affects the way we behave this is significant in terms of the validity of any data we are trying to collect through our observations. Covert participant observation should, therefore, avoid the classic form of observer effect.