Developing Technology Standards to Support Privacy Regulations of the Future

Advertising has played a vital role in the Internet’s mass adoption. But, as the industry evolved, consumer privacy took a back seat. Today’s technologies provide an opportunity to rebuild the digital advertising infrastructure to benefit publishers, brands, and consumers — and build in privacy, from the ground up.

Advertising has played a vital role in the internet’s mass adoption, but as the industry evolved, consumer privacy took a back seat.

Consumer privacy became a national conversation after Cambridge Analytica, a political consulting firm used by the Trump campaign, was able to obtain raw data harvested from up to 87 million Facebook profiles and use it to segment and target users in ways that critics argue amounts to voter manipulation.

Since then, congressional committees and governmental agencies have expanded investigations into Facebook, Google, and other ad tech industry players. GDPR came to the US in the form of CCPA, the California Consumer Privacy Act, a law designed to give consumers similar power over the data they generate online.

Our industry is now struggling to prove to both consumers and regulators that we can be trusted with their data, but there’s hope. Cutting-edge technologies provide an opportunity to rebuild the digital advertising infrastructure to benefit publishers, brands, and consumers — and build in privacy, from the ground up.

The First Step: Joining Forces

Cryptography and blockchain have already emerged as solutions for adding verification and validation layers that ensure accountability and efficiency in the media supply chain. But the only way to drive adoption of these forward-thinking solutions and solve for consumer privacy is by bringing together key stakeholders in the industry, educating them on the benefits and developing the technical standards that will create the change the industry needs.

“I knew blockchain paired with cryptography could deliver significant change to the advertising industry,” says Adam Helfgott, CEO of MadHive and founding member of AdLedger. “I also knew it would take a concerted effort to drive adoption across such a broad landscape of stakeholders.”

Uniting brands, agencies, publishers, and technology vendors provides an open forum for collaboration, allowing the industry to express their concerns and tackle the issues head on. Advertising industry leaders like Meredith, Hershey, IPG, Publicis, and GroupM are forming working groups that release findings for broader industry education, while companies like Omnicom, MadHive, and Beachfront are already engaging in proof-of-concept projects to tackle issues like fraud, brand safety, and transparency.

So, it begs the question: Why not leverage these technologies for privacy as well?

The Privacy Solution = Privacy-by-Design

Cryptography is already being used to keep consumer data safe, at-scale, in an industry adjacent to advertising: e-commerce. Every time you buy something on your favorite website and the little green lock pops up in your browser as you type in your credit card information, cryptography is being used to protect that sensitive information.

But cryptography’s potential runs much deeper than this single application. It can provide mathematical proof for things like data provenance, while simultaneously ensuring regulatory compliance. This gives publishers the ability to secure their first-party data and thereby control access to their most precious resource – their audience. For advertisers, this immutable chain of custody and identity validation of supply-chain participants creates a brand-safe environment in which customers are reached with the right message at the right time.

The best part? Cryptography and blockchain can be baked into the underlying digital advertising infrastructure, which will automate this entire process and create a system with privacy-by-design. But the only way to integrate these technologies and drive mainstream adoption is through the unification, education, and collaboration of key industry stakeholders.

Long-term fixes take time, but the value prop for publishers and advertisers is evident. And maybe the GDPR and CCPA regulations are the push the industry needs to join forces and work toward a long-term solution.

Eliminating Vendor Risk Is a Critical Step to Win Back Consumer Trust

You don’t have to work in ad tech to know there’s growing distrust around how personal information is being collected, used, or misused. With the GDPR in effect and the CCPA on its way, publishers should consider what third-party partners are doing with their data and take steps to eliminate vendor risk.

Editor’s Note: While originally written for the publishing audience, marketers face a similar situation, as they work with vendors and must be compliant with GDPR and eventually CCPA.

You don’t have to work in ad tech (or even advertising at all) to know that there’s a growing sense of distrust around how people’s personal information is being collected, used, or misused by the various content, commerce, and online service providers they interact with every day. But publishers have a front-row seat to the drama as it all unfolds – and an added layer of responsibility, given the direct relationship between users and their content.

With the General Data Protection Regulation (GDPR) in effect and with a look ahead to the California Consumer Privacy Act (CCPA), it’s important for publishers to consider a potential consumer trust issue of their own: what third-party partners and vendors are doing with their data.

You’re Only as Safe as Your Partners Are

To be clear, many publishers have already stepped up their privacy game. Whether it’s to stay compliant with new regulations or actively regain public trust, legacy and digital-first publishers have raised the bar on internal privacy standards, moved toward restricting access to their user data, and worked to secure their systems against breaches and attacks.

Unfortunately, implementing these changes alone is not enough. Not when publishers rely on a host of third-party partners to help keep everything – from video players, to content personalization tools, to programmatic ad deals – functioning effectively.

Each of these partners has its own approach to data collection and usage that needs to be added to the publisher’s overall privacy equation.

Since cutting ties with all third parties isn’t exactly a simple (or realistic) solution for most publishers, partnering with service providers on a privacy action plan – one with overarching standards, but with enough modularity to work across multiple vendors – is a straightforward way to help eliminate that risk.

1. Standardize the Vendor Selection Process

Keeping consumer data sacred starts with being highly selective about whom you work with. Rather than asking ad-hoc privacy and data usage questions, develop standardized questionnaires as part of your vendor selection process. Ask prospective partners pointed questions such as:

  • What data will you collect from us?
  • What is the purpose for collecting this data?
  • What controls and safeguards do you have in place to ensure data is handled properly?
  • Will you share our data with other third parties? If so, with whom and why?

Furthermore, only work with vendors that have received industry certifications from trusted third-party auditors. And of course, put a process in place to revisit each vendor’s data management approach on an annual basis and as regulations change.

2. Get Technical and Business Leaders on the Same Page

Obviously, technical subject matter experts such as the CTO and CPO, and regulatory experts like Legal should play a significant role in managing vendors’ data privacy compliance. But the responsibility shouldn’t stop there. Protecting user data and preventing leakage requires input from key stakeholders in disciplines like sales, marketing, and even platform support.

Business leaders often own the day-to-day relationship with the vendor, and thus have an on-the-ground perspective that the technical experts may not. As a result, they can be more aware of the intricacies of the relationship than the technical experts alone.

Similarly, platform support and sales leaders may have an understanding of site glitches that could be compromising user data, and examples of how, when, and why privacy shortcuts might have been taken in the past.

Privacy and trust are far too important to be relegated to technical leads only, so keep business leaders looped in from the beginning to ensure full coverage and alignment.

3. Plan and Communicate

Trust, of course, is built on communication.

Be transparent with customers about the partners you work with, the data they use, and how you’re working with partners to keep everyone’s data safe. Ideally, this info comes as part of a broader education campaign about how you’re putting customer privacy first in your data initiatives.

Meanwhile, the sheer volume of consumer data in play means that missteps are unfortunately inevitable. This makes having clear emergency protocols and plans for handling worst-case scenarios – including how to communicate details to customers – a critical step in the process.

Throughout these communications, be sure you’re conveying information in simple English, not technical jargon or legalese. To see how it’s done right, learn from some of the brands noted for doing it best.

Remember That You Don’t Need to Go at It Alone

Use trusted vendors as a resource for best practices and as trusted privacy guides. At a minimum, they’ll be able to help you better secure data through their own systems. They may also give you fresh perspectives on how to choose other vendors wisely, and can provide critical support in driving better data standards industry-wide.

With the right approach to partnerships, publishers can leverage vendors as allies (as opposed to bearing with them as potential risks) in the fight to win back customer trust.

It’s Decision Time for Data Privacy (or Will Be Soon)

Chet Dalzell’s recent thoughtful piece on “Our Digital Selves” came along at the same time I (and probably a gazillion others) were pondering the increasingly pressing question of data privacy in the digital age.

Chet Dalzell’s recent thoughtful piece on “Our Digital Selves” came along at the same time I (and probably a gazillion others) were pondering the increasingly pressing question of data privacy in the digital age.

It’s a much bigger question than what data can be used to target potential customers for the latest widget or widget club or to stop you in your tracks at the supermarket in front of the pet food shelves to tell you that Fido, your beloved Fido, seen in the picture on your cell phone, absolutely must have the new, nutritious and tasty Dogbit,s or he may bite your fingers off if you try to give him anything else.

The data question goes to the heart of how we see ourselves in the digital world. And how we see ourselves is in no way clear — even to ourselves.

“Bottom line: If Facebook’s users in the United States are similar to most Americans (and studies suggest they are), large majorities don’t want personalized ads — and when they learn how companies find out information about them, even greater percentages don’t want them.”

That’s what Joseph Turow, a professor of communications and Chris Jay Hoofnagle, an adjunct professor of law, say in The New York Times using various research to support their thesis. The problem is what people tell researchers is not always what they do. Facebook’s quarterly earnings statement showed these enlightening KPIs.

  • Monthly active users (MAUs) — MAUs were 2.32 billion as of Dec. 31, 2018, an increase of 9%, year-over-year.
  • We estimate that around 2.7 billion people now use Facebook, Instagram, WhatsApp or Messenger (our “Family” of services) each month, and more than 2 billion people use at least one of our Family of services every day, on average.

It has been said over and over again that everything has its price. Assuming that this is largely true, how much value or benefit should the consumer expect in return for how much and which data? As I wrote in a comment to Chet’s article, this is sure to be the data-use question we’ll all be turning in our minds as the algorithms get smarter and the temptations greater.

Imagine that you could put a value on each element of your personal, demographic, psychographic and behavioral data, and anyone wanting to use that data would have to pay your price, whether or not you ended up making a purchase or taking a desired action? Imagine further that a data user wanted to use $20 worth of your data to try to sell you a product you wanted, priced at $100? It would be an easy transaction, if the seller were willing to offer you a 20% or even a greater discount for the specific permission to use the data. You would have the product, the seller would have the sale and everyone would be happy.

However fanciful that scenario, it is not nearly as crazy as it sounds. In fact, in one form or another, that is exactly what is happening in the real marketplace; although without your specific permission. As a marketer, I have to spend money to acquire your data and, by making an attractive offer (say a 20% discount), I am offering to compensate you for your data, which allows me to talk to you.

Of course, I have over-simplified the argument. As stated earlier: How much value or benefit should the consumer expect in return for how much and which data?

I think we would all agree that this determination is much too complicated, so we let the “invisible hand of the market” do its magic. Which reduces the decision to a very simple one: Do we perceive that we get enough value from having our data out there in the marketplace to be manipulated however the marketers wish to and simply lie back and enjoy all the offers and benefits? Or should we bite the bullet, give our cell phones to a needy child, do without Waze and get lost again and again, be prepared to stand in the endless line at the bank, throw the “delete everything” switch and effectively remove ourselves from the digital economy? It is getting near decision time for all of us.

I remember many years ago in London, as “one of those Americans,” being lectured over lunch by a very traditional British publisher about the horrors of books being sold by mail order and direct mail and assuring me that the British wouldn’t have anything to do with book clubs or the like. Just when the bill had been paid and we were preparing to depart, she reached into her handbag and pulled out an all singing and all dancing mailing piece from the Readers Digest, offering a very handsome discount on their superb motorist bible, the “Book of the Road.”

She was going to order it right away.

 

Marketers Must Take Stock of Their Data-Driven Power Now

With the 2020 elections already underway, social media marketing is in the spotlight. Although I am not sure if the spotlight was ever really off of its data-driven science since the 2016 election. Although all of the major social networking platforms have been dragged in front of congress to discuss how they use data, it was the relationship between Facebook and Cambridge Analytica that drew the most media attention and become the poster child.

With the 2020 elections already underway, social media marketing is in the spotlight. Although I am not sure if the spotlight was ever really off of its data-driven science since the 2016 election.

Although all of the major social networking platforms have been dragged in front of congress to discuss how they use data, it was the relationship between Facebook and Cambridge Analytica that drew the most media attention and become the poster child.

What data-driven marketers need to recognize is that what happened with Facebook and Cambridge Analytica was not some off-the-books, sneaky misuse of social data. Rather, it was executed very much in line with the broader vision of social media marketing. That has implications for how we use social media as part of our digital marketing mix.

Why Data-Driven Marketers Must Take Stock Now

What makes social media a powerful platform for marketers is that it not only targets individuals based on demographics, but it could also targets based on their location, personality and current context.

Considering all of the conscious and unconscious information users can share on social platforms, there is a powerful amount of information algorithms can mine to generate marketing content and messages most likely to resonate with users. Not only can social media know where you are and what you like, but also your closest friends and your emotional state on any given day. It is even likely that social media algorithms have a better understanding of your underlying emotions and motivations than you do. To anyone who has spent time micro-targeting, this is not a surprise. Given enough data, a shockingly perceptive algorithm can be developed. This is why social media had mile-high stock valuations even when platforms were still hemorrhaging cash.

Let’s face it; marketing has always included an element of manipulation. The function of consumer insights and research is designed to provide marketers levers for manipulation. With some exceptions, we have been able to sleep at night knowing that the consumer stood a chance or that we were also offering a real benefit, so some manipulation was just part of it. When we started using rich data with algorithms to develop more targeted models, many of us saw this as the ultimate example of customer empathy. This was going to empower marketers to become highly relevant to their consumers.

Those who were not on board were behind the times. (To confess, I used to view most cautionary voices as laggards or technophobes. Some were, some weren’t, but they were also right to worry.)

Today, we need to take stock of how that empathy is used. With great empathy comes the power of even greater manipulation. Despite all of the data policies out there, we are not addressing the real question: How much manipulation is too much?

Is it fair to push an antacid ad at someone who posts about a visit to the county fair and winning the pie-eating contest? Seems “big brother-ish,” but benign?

How about pushing anti-anxiety medication ads to a college student going through a breakup during finals week?

While this sounds horrible, we technically can.

Don’t Do It Just Because You Can

How companies manage and leverage consumer data is becoming part of the company’s ethical standards, but we need to extend beyond data privacy to data use.

Just like use of child labor, environmental footprints and other ethical standards, standards on the use of consumer data will be a critical way that companies define their brands and the role they wish to play.

4 Reasons Data Privacy Is Just Too Boring to Matter

Facebook was simply the poster boy for an uncomfortable data revolution well under way, but the hearings were very revealing. I am not sure how we will finally manage the complex issue of data privacy. However, it is clear what is not likely to happen in the near-term.

When I think about the current controversy around Facebook, personal data and the recently departed Cambridge Analytica, I am reminded of MAD Magazine. (Stay with me for a bit.) MAD was a rite of passage for Gen Xers such as myself. Irreverent and satirical of all things pop culture, the magazine was edgy (for that time) and a shock to polite sensibilities of the day. At a time when most people’s exposure to comedy was laugh-tracked sitcoms and Carson’s “Tonight Show,” MAD exposed the artificially flavored vanilla entertainment we were consuming for what it was, formulaic and fake.

It may seem that MAD magazine is tenuously relevant to today’s topic of data privacy, and I would agree except for one critical element. While parents and teachers could feel the sedition and revolution brewing in those pages they were comically inept at doing anything about it. Despite their frowns, despite all of their threats to censure, confiscate or ban the magazine, the magazine made its mark on my generation and contributed to a progression in brutally honest and sardonic comedy (“The Simpsons,” “Family Guy,” “Chappelle’s Show,” etc., etc.)

Fast forward to the congressional hearings where Mark Zuckerberg was grilled for hours on Facebook’s use of user data. Facebook was simply the poster boy for an uncomfortable data revolution well under way, but the hearings were very revealing. We saw Senators struggle, sometimes comically, to understand what really bothered them about this fiasco. Occasionally, they threw out threats to salvage their visibly worn-out veneer of authority. It was that familiar hapless authority figure trying to manage something ambiguously unnerving, while submitting to the inevitable change.

I am not sure how we will finally manage the complex issue of data privacy. However, it is clear what is not likely to happen in the near-term.

  1. There Will Not Be Any Effective Data Privacy Legislation. First, legislators don’t fully understand the intricacies, so they are rightfully hesitant to take strong action. Even more important, consumers are no longer naive about how their personal data could be accessed and used. There are even widely accepted conspiracies about murky information-gathering techniques, such as digital eavesdropping (“I swear XYZ is listening to my conversations because …”). Yet, every day and in very clear ways, consumers are giving permission by default when they post or view content and engage with apps. The lesson is that consumers care, but not enough to meaningfully change behavior. While a case can be made that data-driven services are designed for addiction and compel users to act in personally detrimental ways, like cigarettes, they are still a long way from becoming vilified products. For now, market demand will continue to drive lax data policies.
  2. Business Models Will Not Change Dramatically. When asked in the congressional hearing if there was a mass exodus of Facebook users since the Cambridge Analytica fiasco, Mark Zuckerberg said there was not. Furthermore, after the hearings concluded, Facebook stock rose 4.5% and has been on a major recovery trend since. If you believe in the wisdom of market forces, then this is a very strong vote for business as usual.
  3. Permission-Based Data Policies Will Provide Temporary Relief. These policies mean consumers decide where and how their data can be used. They will be ineffective, but will provide temporary cover until the next blow-up. These policies assume the consumer has time, ability and inclination to review the data policy of every platform they use. There will be companies who will enter into the personal data market, helping consumers monetize and manage their data, but their interest generally will not align with data privacy. The only one really interested in privacy is the consumer and most will not pay for it.
  4. No One Cares. Of all of my posts, the most informative was an article that discussed the wide landscape of consumer data. It is also the one that has had the fewest views, by a long shot. It is so dull, I rarely reference it and that should tell you all you need to know about the battle between sound data policy and data-driven consumerism.

Please: No Trade War on Information

Earlier this year, I had the opportunity to attend the International Association of Privacy Professionals Global Privacy Summit in Washington, DC. I was there touting self-regulation in the digital advertising field. Booth after booth and many panels, however, were talking about something else: the European Union’s forthcoming General Data Protection Regulation (GDPR) and its cousin, ePrivacy Regulation — and how American and global businesses may deal with both. GDPR takes enforcement effect on May 25, 2018.

The opinions expressed in this post — as always — are my own.

Little Data Business ConceptEarlier this year, I had the opportunity to attend the International Association of Privacy Professionals Global Privacy Summit in Washington, DC. I was there touting self-regulation in the digital advertising field.

Booth after booth and many panels, however, were talking about something else: the European Union’s forthcoming General Data Protection Regulation (GDPR) and its cousin, ePrivacy Regulation — and how American and global businesses may deal with both. GDPR takes enforcement effect on May 25, 2018.

While all the promulgations for GDPR are yet to be revealed, the potential impact is that the EU will place a lockbox on personal information of European citizens (both consumers and business individuals), even those data elements that are as benign and beneficial as advertising and marketing related information. Only affirmative consent from the consumer will make such data available for constructive outcomes as marketing analysis and tailored advertising. Whether or not a company is based in Europe, United States or elsewhere — if it touches EU citizen data, it must conform to the regulation — or face fines as much as 4 percent of global turnover — or €20 Million, whichever is greater. IAB Europe has posted a helpful primer.

Will the first cases under this regulation be brought against Europe-based companies? We shall see.

Many Americans fear something else. It will be used to go after American-based companies — particularly global innovators in data and information that use consumer data for productive use, with great success. Data-driven marketing economies offer superb dividends: consumers get more relevant content, greater choices and greater diversity of content — as well as entrepreneurial businesses that seek to innovate even further. The decision this past week under EU competition law regarding Google only advances the case of perceived anti-American bias in EU “digital” law enforcement. (Without arguing merits or criticisms of the decision — last I heard, no one in Europe is forced to use Google for his or her online searches or shopping.)

Then there’s the debate about consent in GDPR. The tired “opt-in versus opt-out” debate has reared its ugly head, as the EU marketplace implements affirmative consent mandates. We all know opt-in requirements tend to kill consumer discovery, and hurt, particularly, small business.

Like EU’s cookie law, Europeans may well see a plethora of new sets of notices asking consumers whether or not they really want to visit a site, use an app and so on — anywhere personal data, including browsing history and app usage, is intended to be collected and used for marketing purposes. There are myriad other GDPR requirements — data protection impact assessments, data protection officer designees, the right to data access, the right to be forgotten, the right to data breach notification — which marketing organizations will need to navigate.

And what might the global effect be as nation after nation seeks to establish “reciprocity” with more stringent EU law? In the post-Snowden era (how post-Snowden are we?) there are plenty who want to turn off American data collectors, as if the U.S. private sector has anything to do with U.S. government surveillance. They are not the same thing, and should never be.

If the goal of the EU is to protect the European consumer — by striking fear in Silicon Valley and American business through fines, litigation and the like — then it may go over very well with European audiences. Kudos, point made. Then there’s our side of the ocean. Despite all the bluster of “America First,” the truth is that we’re a global economy and there’s no turning back. And, no one will win if there’s a trade war — especially one over data flows that fuel economic growth.

3 Success Factors to Insights-Driven Automation

Most marketers do not have a technology problem. In fact, we’ve crossed the chasm of a few years ago, when technology could not keep up with marketers’ vision of customer engagement. Now, we have so much technology, we can’t utilize it strategically and we struggle to integrate it.

Most marketers do not have a technology problem. In fact, we’ve crossed the chasm of a few years ago when, technology could not keep up with marketers’ vision of customer engagement. Now, we have so much technology we can’t utilize it strategically, and we struggle to integrate it.

At the same time, marketers do not have a data problem. There is more data than we can manage or use wisely.

Marketers do have an optimization problem when it comes to using their technology and data to generate meaningful insights. Many of us struggle with how to prioritize our integrated marketing technology, practices and teams in order to generate the kinds of insights (a key output of many of our technology and data solutions) which will move the needle for the business.

There are three factors to this challenge.

  1. Analytics must be integrated with campaign management.
  2. Content must be created to solve problems.
  3. Insights must be scored and prioritized.

First, We Have to Get the Analytics Closer to Our Outbound Messaging. Personalization is the key to successfully creating relevance for each customer, so the analytics can’t happen off to the side. It has to be integrated with our IMM/campaign management solution so that each customer and prospect will be connected with content that is important, and available at a time that will resonate.

We can pretty easily automate our marketing response to insights. Programmatic buying has been around for many years and is expanding beyond search to Web display, ad re-targeting and campaign management (outbound) solutions. The rise of the DMP (or DSP)—platforms which allow utilization of consumer data across websites—provides great benefit to marketers looking to serve customers and prospects as they interact with any combination of owned, earned and paid media. This is helping us identify the anonymous and known people in our marketplace. Yet, the insights from interactions with branded messages across the ecosystem are not yet accessible fast enough or completely enough to allow marketers to be nimble in serving customers. We have to get these programmatic insights back to the main IMM “hub” and the campaign messaging platforms.

We need automation to also serve the process. Marketing operations efficiencies like workflow and social CRM require these insights at scale. While truly integrated IMM on a single platform is nirvana, the marketing technology landscape is huge. Real engagement often requires a few tools that will work together.

Second, Our Content Creation Machines Have to Focus More on What Sells and Our Brand Purpose. Too much content is created simply because it’s interesting. That is not a high enough bar. If your product is water, then the content needs to be all about fire. Content has to create need and speak to the “Why” of what you do, not the “What.” Why brands produce a product is usually about vision, value, need and satisfaction. Look at those heartwarming Super Bowl ads—do Dove products make you a better dad? No. But the brand is about being true to yourself and to celebrating your own personal values. So the advertising content worked.

If 2015 has a theme in marketing, it’s got to be personalization. Of course that means something different now than it did 10 years ago, when we first started really considering what is possible with custom-branded experiences. Effective personalization now means curating the content that will resonate with each customer’s individual needs. Automation technology makes this possible through content blocks and integrated native advertising units.

Third, We Need More Discipline About the Types of Insights That Will Help Us Do More Effective Marketing. I’ve always found in marketing analysis that certain demographics have clear preferences in tone, pace and language when interacting with a sales rep or brand. We can capitalize on these preferences to increase sales and connect the right rep with the right type of customer.

One way to solidify the discipline is to have some sort of mantra or brand promise that is very clear, and so all analytics work can strive to generate insights that are true to that brand promise. Remember the Coca-Cola’s Content 2020 Manifesto? Auditing your landscape of opportunity and focusing on the areas that have the most impact on revenue and market share will help you identify the kinds of insights that are most meaningful for your business.

Granted, this task is complicated by the fact that much of our data is channel-specific and measures the effectiveness of campaigns against previous campaigns. We need more insights around the impact and engagement of individual customers. Silos are still present, and organizational structure can severely limit marketers’ ability to learn about the customer-level engagement. One way to bring the team together is to score insights as they are applied to the business (much as we score leads). Did this move the needle? Have we improved our reach or response? Are key audiences engaged? It’s not just a volume game, but an engagement game with priority, high-value customers.

With these three success factors in mind, marketers can use the technology they have in a test and learn methodology to help better understand how automated insights can grow the business. Once the key drivers are identified, we can start to also assess current technology and pare down the options for improving the integration and efficiency of your organization.

Are you automating the use of insights that help personalize the customer experience? Please share your success factors in the space below.

Where Earth Day Meets Big Data

When marketers laud the advantages of big data, it’s usually in the B-to-C marketing context. Sustainable fabric company Thread LLC takes a different approach. By using granular supply chain and social impact data, Thread helps customers improve brand integrity and increase the marketability of core products. For this special Earth Day blog

Happy Earth Day 2014! For this week’s Marketing Sustainably blog post, I welcome Adam Freedgood as a guest blogger. Adam Freedgood is a sustainable business advisor and co-founder of Third Partners, a New York-based firm that helps organizations implement strategies that create new revenue opportunities, reduce waste and improve environmental performance. He is also a sustainability expert on the DMA Ethics Policy Committee. —Chet Dalzell

Sustainable Product Companies Benefit From New Breed of Big Data
When marketers laud the advantages of big data, it’s usually in the B-to-C marketing context. Sustainable fabric company Thread LLC takes a different approach. By using granular supply chain and social impact data, Thread helps customers improve brand integrity and increase the marketability of core products. For this special Earth Day blog, I sat down with Thread CEO Ian Rosenberger, Director of Community Development Kelsey Halling, and Director of Marketing Frank Macinsky to learn how Thread is using big data to unlock new sales opportunities through positive social and environmental performance.

Q: What Does Thread Do?

Rosenberger: “Thread recycles trash from the poorest neighborhoods on the planet and transforms it into fabric. We then sell the fabric and the story of how it’s made to companies that are trying to be more responsible.”

Q: Other than recycling, what about your business model makes you sustainable?

Rosenberger: “In addition to holding ourselves to the highest supply chain standards on the planet, we’re a certified B-Corp, which means sustainability is in our corporate DNA.”

Halling: “Traditionally, the fabric business is linked to environmental and social problems, not solutions. Beyond being a recycling company, we are also interested in social impact.”

Q: What are some of the problems associated with the typical fabric supply chain?

Rosenberger: “There are huge problems with textiles. From labor practices to environmental pollution, many brands’ supply chains don’t measure up to their marketing. For example, last year at this time thousands of people died and were injured in the Rana Plaza factory collapse in Bangladesh. Thread exists because we think brands need a more responsible source of raw material.”

Q: What do you mean by “more responsible source of raw material”?

Halling: “We use ‘responsible’ as the overarching term covering social and environmental concerns. Today there’s a lot of greenwashing out there. A recent study from Rank a Brand shows that hundreds of apparel companies talk about sustainability, but only a fraction follow through with real action or data. It’s a big deal to be able to put proof behind the claims.”

Q: There are many companies recycling plastic from various sources for various products. Why did you focus exclusively on fabric as the end product for your material?

Rosenberger: “We saw an opportunity to conduct good business while solving an enormous global problem. First off, we believe fabric can end poverty.” The textile business is one of the dirtiest on the planet, both socially and environmentally. We offer a 100 percent transparent supply chain solution. By giving data to other companies, we are creating a new market for getting a billion pounds of trash off the streets. In Haiti and Honduras we have already pulled 70 million plastic bottles.”

Macinsky: “The great thing about the fashion brands we are speaking with is that the industry is a trend setter in a lot of ways. As more brands get involved and interested in this transformational shift in the way we do business, a lot of people will benefit worldwide.”

Q: Big data typically refers to marketers using consumer data to target marketing messages more effectively. How does Thread’s outlook on big data differ?

Macinsky: “Our key differentiator is powerful stories involving people. We are tasked with finding qualitative data about how people are impacted positively by our product. We think in terms of ‘triple bottom line’ metrics: positive impacts on people, business and the environment.”

Halling: “We’ve been tracking data since the very beginning. As we are setting up supply chains, we are measuring financials, efficiency and the impact we are having socially and environmentally. We track job creation, training hours, pounds of trash, and even the lifecycle carbon emissions associated with each step in our supply chain.”

Q: That’s a huge amount of data mixing qualitative and quantitative units. How does a Thread customer digest it all?

Macinsky: “As a fabric company, our product goes into consumer goods. Our job is to give our partner brands a very simple distilled story so they can turn that around.”

Halling: “It changes from company to company and from consumer group to consumer group. From the list of bragging rights we provide, brands choose the attributes that are most in line with their marketing strategy. Our impact report summarizes some of the data insights.”

Q: How is the data Thread captures different than leading supply chain tracking mechanisms in the apparel world—for example, Patagonia’s supplier tracking tool?

Halling: “We have a saying that we track everything ‘from ground to good.’ When we say we know our supply chain, it means we are literally on a first name basis with the people involved. Some apparel companies claim to know the factories where stuff is made. They run audits, verify codes of conduct, etc. We take it way further than that, back to the moment bottles are picked off the street.”

Q: What positive social impact can Thread show so far?

Halling: “To date we are supporting 2,000 to 3,000 income opportunities for the poor in Haiti and Honduras. In the first quarter of 2014, our supply chain supported 221 jobs and about 2,700 income opportunities with $100,000 paid to small businesses, and we have huge growth opportunities ahead.”

Q: What data would you like to have that you do not have today?

Halling: “We think our partners and consumers would respond well to more real time data like GPS tracking, so they could actually see movements as they are happening. Even the data we have is groundbreaking. Environmental impact tracking is not widely done in the developing world. It’s a real culture shift.”

Macinsky: “I’m most interested in tracking outcomes on how Thread is benefitting people in their homes, workplaces and actually proving what jobs and income opportunities mean to people. For example, do cleaner streets mean fewer health problems?”

Q: Can we expect to see your use of big data in products on store shelves soon?

Macinsky: “You sure will. Our first partnership is with a bag manufacturer called Moop. That product will be available in May.”

Q: Will Moop be talking about specific social impacts?

Macinsky: “For the first launch, the focus is on some of the more digestible tidbits of data we have to offer. We are starting with the basics like the number of plastic bottles that go into a product, jobs supported and similar stats. Long term collaboration will increasingly focus on the social storytelling side.”

Q: Who do you want to connect with in the marketplace?

Macinsky: “Our focus right now is on talking to brands that want to be more responsible in their supply chains.”

Halling: “We are excited about the larger impact that happens at volumes to help disrupt the textile industry. The industry is this multi-billion dollar force in the world, but it is still murky and hard to get data on supply chains. There is still tragedy happening. It doesn’t have to be that way.”

Do Consumers Love Marketing (Anymore)?

Picking up on my previous blog post, marketers have a lot of work to do, too, with consumers. Yes, we have 45-plus years of effective self-regulation on our side, and we’ve navigated fairly well into the digital and mobile age. We’ve kept self-regulation in marketing, more or less, intact where it comes to fair and free use of marketing data, even as the number of data users has grown extensively.

Picking up on my previous blog post, marketers have a lot of work to do, too, with consumers.

Yes, we have 45-plus years of effective self-regulation on our side, and we’ve navigated fairly well into the digital and mobile age. We’ve kept self-regulation in marketing, more or less, intact where it comes to fair and free use of marketing data, even as the number of data users has grown extensively.

But are we, as marketers, using data in a way that is winning the love and attention of consumers?

Some recent surveys point to some serious perception issues. First, we’re becoming jaded toward all types of advertising. A February story in the Economist, says brands are struggling to connect with an increasingly skeptical public:

Havas Media, a big marketing agency, says trust in [brands] has been declining for three decades. Last August it published the latest in a series of worldwide surveys, in which 134,000 consumers in 23 countries were asked what they thought of 700 brands. A majority of those taking part would not care if 73-percent of them just vanished. In Europe and America, 92-percent would not be missed. Only in places like Asia and Latin America, with lots of newish consumers, is there a bit more attachment to brands, though Havas Media reports that it is declining there too.

A recent post in Marketing Charts, also documents the trend, citing two more studies:

Indeed, Mindshare’s ‘Culture Vulture 2014‘ finds that only 47 percent of North American consumers last year agreed that they like to pass on interesting things they see or hear about brands, with that figure having steadily fallen over the past few years, from 66 percent in 2010 …

Another area in which brands can improve? The relevance of their messaging. Some 34 percent of US online adults responding to a new Responsys study indicate that they have ‘broken up’ (yes, the Valentine’s Day-themed terminology must continue) with a brand due to receiving poor, disruptive or irrelevant marketing messages. These break-ups were most commonly due to the brand continuously sending irrelevant content on multiple channels (53 percent), but also were frequently because the consumer never signed up to receive the offers from the brand (42 percent). (Brand stalkers!) Finally, one-third broke up because the messages were too generic and ‘obviously meant for the masses, not just them.’

And then we had a TRUSTe study which produced a daunting AdWeek headline: “Consumer Confidence in Online Privacy Hits 3-Year Low | Most afraid of businesses, not government” This is perhaps not surprising given all the general media’s coverage of overreaching government surveillance and of the untimely, huge data breaches (security). No wonder there has been a spillover effect on privacy, even as we would argue they are not the same issues.

There are two necessary responses from marketers here: do whatever you can to build trust with your customers—and do whatever you can to be relevant. And, from the reverse side, never do anything with your customers’ data that would undermine trust. Never do anything with your customer data that would convey irrelevance.

Transparency matters. Providing consumers in layman’s language an explanation of how each brand uses data to serve their customers goes a long way toward anticipating skepticism and, for some, dispelling hostility.

Choice matters. Using consumer data to make a personalized, 1:1 experience (one that is driven by segmentation, analytics and marketing triggers) that resonates with customer needs and desires, establishes relevance. Let consumers optout any time they choose to do so, but when you’re relevant, that choice is less likely to happen. It’s a new week—so how can I spend my time building trust and relevance with customers?