Competition: Another Big DC Week for Tech (Where Do We Go From Here?)

When the leaders of Amazon, Apple, Facebook, and Google come to Washington, you know there’s going to be a lot of posturing – and it’s usually not (just) from the witnesses.

The focus this past week was the House Judiciary Subcommittee on Antitrust Law rather than privacy, security, and foreign influence – topics of previous high-profile hearings. Yet the out-sized attention on these leading executives and companies – all of them U.S.-based – is actually a testament, in my humble opinion, to the power of data, information, and innovation at work advancing the American and global economy. Has this exercise and accumulation of power been benign, beneficial… or harmful?

I’ve not been shy to tout the conveniences and benefits that we’ve accrued and enjoyed as a result of responsible data use. Yet I do not dismiss an investigation of harm, unintended or otherwise. Simply, I ask that in our zeal to rein in questionable practices, let’s flash a sign to policymakers: “Handle with Care.”

The world has embraced the Information Economy. It just so happens, not by accident, that the United States has both many global leaders (four of them visiting DC) and – it must be said – a long tail of innovative companies that want to grow, prosper, and potentially join the ranks of the next big, successful data-driven entities.

As Americans, we should do all we can to recognize our own advantage, and to encourage such business ingenuity – for a better world.  Transparency, control, and civil liberties must be protected… that’s all.

There’s a part of me – with my direct marketing heritage – that’s utterly in awe of what these companies have achieved, each of them forging their own paths to business success, and doing so in a way that has cultivated and curated data – marketing and otherwise – to create in each a global powerhouse. Digital has always been “direct marketing on steroids” (please let me know who coined this phrase), and many of these companies achieved their success through a fervor for measurability and accountability.

But the question of the day – antitrust – is a very serious charge. 

Practically every business revolution in the age of capitalism – oil, banking, computing, communications, digital, among others – have had to grapple with the question, how much power is too much? What constitutes “too big” in the Information Economy? Though no one has gone there yet, could there ever be a concept in the digital world as Wall Street’s “too big to fail” – in reference to our banking giants?

I myself don’t have these answers, but I do think it’s worth looking (again) to our digital and direct marketing heritage for some guidance. Certainly any new federal laws and regulation, such as for privacy, ought to be pragmatic in their approach – rather than overly prescriptive. We have a blueprint for a federal privacy law in Privacy for America, for example, which seeks to discern reasonable from unreasonable data uses.

Some consideration, please.

  • What if we held out that data collected for marketing use should be used for marketing purposes only? What non-marketing uses – product development and design possibly – might also be acceptable?
  • Should personally identifiable data collected for marketing use ever or always be anonymized for non-marketing use? Certainly, let’s make sure we can recognize consumers as they jump from device to device and across digital and offline platforms, if for no other reason than marketing or fraud prevention purposes. These aims grow the economy, serve consumers, and finance vital social aims such as news reporting.
  • Under what circumstances should private-sector data be handed over to government sources? What legal protections should govern such handovers – subpoenas and otherwise? It’s a borderless world. What access should foreign governments have to such data, about U.S. citizens or from other jurisdictions? It’s a fine line – or even a fuzzy blur – between anti-terrorism and unwanted surveillance of ordinary people.
  • And of course, there’s anti-competition. Data enablement and data sharing should grow the economy, foster competition, and serve consumers. Laws – whether anti-competition or privacy – should seek the same, and not undermine innovation. For example, the current demonization of third-party data feeds a frenzy that concentrates first-party data collection and power in “walled gardens” – where knowledge about customers’ marketing preferences often becomes incomplete and clouded. Could policymakers use their pen unwittingly to diminish the long tail of ad tech to detrimental effects? Even (some) Europeans have questioned what they’ve done.

As far as bias is concerned, add my voice to those who wish to do our utmost to minimize and eliminate protected-class discrimination in our algorithms and artificial intelligence – gender, race, religion, sexual preference – as we practice the art and science of commerce.

All the same, I have deep sympathy for this same task regarding political free speech: when and how we would ever attempt to define and remove political bias is dangerous territory. What is a lie? What is hate speech? What is a conservative or liberal bias?

There are no easy answers here. But I look forward to this public investigation, all the same. We need to understand fully where the Information Economy may overstep, overreach, restrict free speech, or undermine competition – even if these grievances are found to be remote.

Data Love Story in the USA With a Few Spats, Too

You might call this time of year, Jan. 15 to March 15, marketing data’s “high season,” based on all of the goings-on. There’s a lot of data love out there — and, like all relationships that are precious, they demand a huge amount of attention, respect, and honor — and celebration.

I’ve been enjoying Alliant’s “Data and the Marketer: A Timeless Love Story” postings this month, leading up to Valentine’s Day.

You might call this time of year, Jan. 15 to March 15, marketing data’s “high season,” based on all of the goings-on:

The Alliant infographic download got me thinking of some other “key” dates that might also be recognized on the Data Love calendar, reflecting other aspects of the love story. Not all love affairs are perfect — are there any? Sometimes there’s a quarrel and spats happen, without any abandonment of a full-on love affair.

  • 1960 — The Direct Marketing Association (then, DMAA) develops its first self-regulatory ethics code for data and lists, in an early industry initiative to separate the good from bad players. It becomes the basis for practically every data protection (and consumer rights) framework since.
  • 1971 — The Mail Preference Service is launched (today DMAChoice) the first marketing industry opt-out control program for consumers — the essential framework for every consumer choice tool in marketing (in-house and industry-wide) since.
  • 1973 — The U.S. Department of Health, Education, and Welfare introduces and adopts eight Fair Information Principles. In 1980, the Organization of Economic Co-operation and Development adopts these principles for trans-border data flows. In 1995, The European Union, among other governments, enact variation and interpretation of these formally into law, eventually adopting the EU General Data Protection Regulation in 2018.
  • 1991 — Jennifer Barret is named Acxiom’s privacy leader — among the first enterprises to name what essentially would become a “chief privacy officer.” In 2000, Trevor Hughes launches the International Association of Privacy Professionals. A nascent cottage industry evolves into a huge professional education and development organization that today includes tens of thousands of members.
  • 1992 — A nonprofit and privacy advocacy organization, the Privacy Rights Clearinghouse, is formed, and soon thereafter begins tracking data security breaches, both public and private sector. Its breach list since 2005 is posted here. Data privacy and data security, as evidenced in Fair Information Practice Principles, go hand-in-hand.
  • 1994 — The first online display ad appears on the Internet, by AT&T. (And the first commercial email perhaps the same year.) So marked the humble beginnings of Internet marketing — “direct marketing on steroids.” I thought Jeff Bezos used this term in Amazon (formed 1994) early days during a DMA conference – but alas, I’m having a hard time sourcing that one. Perhaps this quote was related to Google (formed 1998) and the real-time relevance of search!
  • 1995-96 — Subscriber Ram Avrahami asserts a property right to his name in a lawsuit against S. News and World Report. Because he thwarted the spelling of his name on the magazine’s list – in a bid to discover who else the magazine rents its subscriber list to – the court ultimately rejects his challenge. The case, however, introduces a novel concept and set of questions:Is the value of any list or database tied to the presence of any one individual name on that list, a penny a name in this case?  Or, is its value because of the sweat of the brow of the list/database creator (a business, nonprofit group, or other entity) that built a common attribute to which a list may derive commercial value?The “walled gardens” of today’s Digital Giants largely were built on such data collection. These two questions recognize that a “data-for-value” exchange must be perceived as mutually beneficial, or else consumer trust is eroded. “Who owns the data?” (a 20th Century assertion) might be better substituted today as “Who has a shared interest in the value and protection of data?” (a 21st Century proposition).
  • 2006 — Facebook is formed, among the first companies that created a “social network.” (I’m sure the adult content sector preceded it, as it often points us the way.) In one industry after another, digital disruption reorders supply chains, consumer-brand relationships, shopping practices, and name-your-own-business here. The Great Recession, and venture capital, serves to speed the quest for data-defined efficiency and transformation.
  • 2017 — Equifax, one of the United States three leading credit and information bureaus on Americans, experiences a breach of epic proportions. While the nation was fascinated with subsequent public hearings about Facebook, its data deals, and its (ahem, beneficial) targeted advertising practices, a potentially much more egregious purveyor of harm – sponsored government hacking of the highest order – largely gets a ho-hum from the general public, at least until this past week.
  • 2020 — California fragments online privacy protection in the United States – only underscoring the need for the federal government to act sooner than later. Support Privacy for America.

So, yes, there’s a lot of Data Love out there — and, like all relationships that are precious, they demand a huge amount of attention, respect, and honor — and celebration. See you soon in Orlando!

 

 

For Measurement-Oriented Marketers: The Best of ‘Here’s What Counts,’ 2019

Over the past year, “Here’s What Counts” opined on several topics. But the ones that gained the most traction involved Gen Z’s views on privacy, social media data collection, and 1:1 marketing.

Over the past year, “Here’s What Counts” opined on several topics. But the ones that gained the most traction involved Gen Z’s views on privacy, social media data collection, and 1:1 marketing.

The most popular post, “Have We Ruined 1:1 Marketing? How the Corner Grocer Became a Creepy Intruder,” was reposted on LinkedIn by Don Peppers, co-author of the book, “1:1 Marketing.”  The idea grew out of an assignment I gave my students at Rutgers School of Business in Camden, N.J. The students had to compare the 1996 version of database marketing, as described by Arthur Hughes in the introduction to his watershed book, “The Complete Database Marketer,” with the current state of online direct/database marketing. Hughes likened a marketing database to the Corner Grocer, who kept mental notes on his customers’ names, personal preferences, and family connections. Specifically, the students had to tell me how marketing technology innovations have enhanced database marketing since 1996.

The Takeaway:

While they concede that the targeted ads they experience are usually relevant, several of them noted that they don’t feel they have been marketed to as individuals; but rather, as a member of a group that was assigned to receive a specific digital advertisement by an algorithm. They felt that the idealized world of database marketing that Hughes described in 1996 was actually more personal than the advanced algorithmic targeting that delivers ads to their social media feeds.

It’s not surprising that Gen Zers expect a more personalized marketing experience. As I wrote in “Gen Z College Students Weigh-in on Personal Data Collection — Privacy Advocates Should Worry.”

Some Gen Zers don’t mind giving up their personal data in exchange for the convenience of targeted ads and discounts; others are uneasy, but all are resigned to the inevitability of it.

Student comments included:

Resignation

“I do not feel it is ethical for companies to distribute our activities to others. Despite my feelings on the situation, it will continue — so I must accept the reality of the situation.”

 Rationalization

“… I feel as though consumers gain the most from this value exchange. Marketers can do pretty much whatever they want with the information that they collect, but they do not really ‘gain’ from this exchange, until people actually purchase their products …  Even if this exchange allows marketers to play with people’s vulnerabilities, it is ultimately consumers’ choice on whether or not they want to buy something.”

 And, in response to a New York Times article about Smart TVs spying on people, one student expressed:

Disgust

“Marketers are gaining money and information through various means and have the ability to do so without risk, because consumers are not going to read [a] 6,000-word privacy policy just to be able to work a television.”

Lest we think that the younger generation is alone in eschewing concerns about privacy, take a look at “Getting Facebook Sober: What Marketers Should Know About Consumers’ Attitudes and Social Data.”

While people claim to be concerned about privacy, they’re not willing to pay for it.  A Survey Monkey poll done for the news site Axios earlier this month shows that three-fourths of people are willing to pay less than $1 per month in exchange for a company not tracking their data while using their product — 54% of them are not willing to pay anything.

As we charge into 2020, we need to carefully consider how the data we give up so willingly is used to manipulate not only our purchasing behavior, but our beliefs and values. In the post, “A Question for Marketers: Is it Social or Is it Media?” I recount Sasha Baron Cohen’s speech at the Anti-Defamation League (ADL) calling Facebook “the greatest propaganda machine in history.”

I sent The Guardian’s publication of Cohen’s speech to my children, two of whom have given up their Facebook accounts. My daughter replied, “Did you learn about this on Facebook? If so, irony is dead.”

Actually, I did. RIP, irony.

A Question for Marketers: Is It Social or Is It Media?

Sasha Baron Cohen took Facebook to task last week with his speech at the Anti-Defamation League (ADL) calling Facebook “the greatest propaganda machine in history.” Published in full by The Guardian, the speech was shared on the social media platform, to mixed reviews.

Facebook has 2.45 billion monthly users. Given that reach, it’s hard to classify Facebook as anything other than a mass media outlet. Compare Facebook’s reach to some of the most-viewed television broadcasts:

  • 600-650 million people worldwide watched the Apollo 11 moon landing live on TV (about 20% of the world’s population in 1969)
  • 750 million watched Prince Charles and Lady Diana marry in 1981
  • 2 billion-plus people watched the opening ceremony of the Olympics in Beijing (about one-third of the world’s population in 2008)

In 2017, Mark Zuckerberg told the first Facebook Community Summit, “Our full mission statement is: Give people the power to build community and bring the world closer together. That reflects that we can’t do this ourselves, but only by empowering people to build communities and bring people together.”

How’s that working out for us?

Sasha Baron Cohen took Facebook to task last week with his speech at the Anti-Defamation League (ADL) calling Facebook “the greatest propaganda machine in history.”  Published in full by The Guardian, the speech was shared on the social media platform, to mixed reviews.

Cohen states:
“Think about it. Facebook, YouTube and Google, Twitter and others — they reach billions of people. The algorithms these platforms depend on deliberately amplify the type of content that keeps users engaged — stories that appeal to our baser instincts and that trigger outrage and fear … On the Internet, everything can appear equally legitimate. Breitbart resembles the BBC. The fictitious Protocols of the Elders of Zion look as valid as an ADL report. And the rantings of a lunatic seem as credible as the findings of a Nobel prize winner. We have lost, it seems, a shared sense of the basic facts upon which democracy depends.”

My Facebook comment about the speech: “Why shouldn’t social media platforms be held to the same standards as other content publishers?”

Someone replied,

“But they’re not content publishers … they’re conduits for publishers. On FB, you and I and Joe and all kinds of media are the publishers. Think of the phone companies. They can’t be held responsible for what people say over their systems.”

My response:

“I guess that depends on whether you put the emphasis on social or media.”

And of course, most phone conversations are private (at least for now) while most Facebook posts are not.

I sent The Guardian’s publication of Cohen’s speech to my children, two of whom have given up their Facebook accounts. My daughter replied,

“Did you learn about this on Facebook? If so, irony is dead.”

Actually, I did. RIP Irony.

The Challenge of a (Really) Short-Form Direct Response Ad

It’s challenging for direct response marketers to fit all of the key elements of a good direct response ad into the space of a Facebook ad, Instagram ad, or Twitter post.

It’s challenging for direct response marketers to fit all of the key elements of a good direct response ad into the space of a Facebook ad, Instagram ad, or Twitter post.

Students in my direct marketing class at Rutgers were tasked with finding direct response advertisements in different media and detailing what made the ads direct — as opposed to general awareness advertising. Things like targeting, personalization, call-to-action, specific offer, etc.

Because their media consumption is almost exclusively online — social media, SMS, YouTube, and sometimes email, it’s not surprising that their examples showed the limitations of the media they consume.

The unlimited palette of the traditional direct mail kit, where repetition could be used to hammer home benefits and stimulate response, is all but extinct for this target audience. Even the traditional short-form, 120-second commercial has given way to shorter YouTube pre-roll ads that can be skipped after 5 seconds. (Make sure you get your main benefit and CTA out quickly.)

The examples students provided came mostly from their Instagram or email accounts, and many were limited to a simple illustration of the product, a brief description, and a “Shop Now” button. Although one student did provide a link to a classic DR spot for Flex Seal that made me laugh out loud (that’s long-form for lol). Over the course of two

direct response ad example
Credit: Chuck McLeester

minutes, Flex Seal was described as liquid rubber in a can, handyman in a can, and last but not least, the Hoover Dam in a can. There were several demonstrations, including one where the bottom of a small boat was replaced with a screen door coated with Flex Seal — no leaks, at all. This tried-and-true formula for DRTV sales doesn’t work in 280 characters; although, the ability to embed video into a tweet can overcome that limitation. The content of this short-form broadcast ad might make an interesting series of Instagram ads, but it would take four to five different episodes to include all of the content and demonstrations.

Reaching a young audience with direct response advertising is challenging, but not impossible. The best example of incorporating all of the essential elements of good direct response was provided by a female student from her Instagram feed. All of the elements are there: targeting, benefits, offer, and call-to-action — Girls Night. Delivered.

Shout out to Amazon Prime.

F500 Advertisers Strategize Better, But SEO Still Offers SMBs Growth Opportunities

Recent research has shown that many small advertisers spend all of their marketing budgets online. These businesses, like poker players, go all-in: investing their entire marketing budget on Google and Facebook ads.

Recent research has shown that many small advertisers spend all of their marketing budgets online. These businesses, like poker players, go all-in: investing their entire marketing budget on Google and Facebook ads.

Large businesses approach the online space differently. They apportion their considerable advertising dollars across online and traditional media, seeking synergy in their efforts.

Small business owners often wear many hats and cannot, or rather do not, spend a lot of time on developing marketing strategies. They simply have too few people trying to do too many tasks. Neglecting to budget resources, whether time or money, for localized SEO has significant opportunity costs for these businesses.

Put the Customers Ahead of Rankings

The mobile-first Google environment gives small local businesses chances to shine in search that previously were unavailable. The big brands crowded them out at the top of the listings.

Today, by strategically optimizing the site for the business location, a small business can show up for targeted local searches more easily than it ever has before. The key to this visibility is to make sure that the site offers what an out-of-town searcher might look for as well, as the local clientele.

Create a customer-first, local-first approach to achieve success.

Here is an example of a customer-first, local strategy:

I recently sadly had to look for where to purchase funeral flowers to send to a funeral home in an area that I was unfamiliar with. I found a florist in the area by searching for “flowers for funeral + place name.” Not only did the florist’s site include content on flowers for funerals, but it even had confidence-inspiring photos of some of its work. The phone number was prominently displayed, and I immediately called and made my purchase. My curiosity was pricked, and I asked several questions and found out that the shop was local, not part of a chain, and had carved out several niches in the flower market, including flowers for funerals. Although very busy, the owners had developed a marketing strategy and developed their site to bring in the right customers.

As fate would have it, I encountered another florist in another town, griping about how online is hurting her business. The local shop did not have a clear strategy or even an up-to-date site and was relying on online ads for marketing. The contrast was sharp.

Glom Onto the Free Stuff First

SEO is more than just optimizing the site. For small businesses, there are search freebies that should not be missed. Here are just a few.

  • Google My Business is free. It takes a few hours to set up a business listing. This is the table stakes, so to speak, and many businesses set up a very basic listing and fail to flesh it out or keep it up-to-date. Accuracy is important, particularly for small businesses that have storefronts. It is always amazing to look at a listing and realize that it does not reflect current hours of operation. Additionally, for businesses that are tucked into strip malls, listings that include storefront pictures help bring live customers to the businesses.
  • Yelp and TripAdvisor offer free listing services that any qualifying business should take advantage of to improve its online visibility. Both are large sites and often dominate the top search listings, so the old adage applies: If you can’t beat them, join them.
  • Facebook Pages combined with Facebook Ads create a powerful one-two marketing punch. Just as with Google My Business, it is important to go beyond the very basics and create a page that engages and informs. I am an avid, but awful, golfer — and my personal Facebook feed includes postings from several golf courses. One simply posts pictures, no engagement required. They are merely pretty pictures, and do create an urge to go play the course. Another course recently posted a short post, asking folks to rate — by difficulty — the three Par 5 holes on the course. This post drew instant engagement with many ratings, comments, and likes as responses. This lively engagement created a desire to play the course, just to test out those difficulty ratings that I had assigned. Both courses post regularly on- and off-season, so they always have a share of mind. Both are small businesses looking beyond the ads for their online marketing.

Getting ‘Facebook Sober’? What Marketers Should Know About Consumers’ Attitudes and Social Data

I thought I was pretty clever when someone told me they hadn’t been on Facebook in over a year and I said, “Wow, you’re one-year Facebook sober.” They laughed. The next day, another person said they’d been off for two years — same comment by me, same reaction. But later, I found the term on Urban Dictionary.

I thought I was pretty clever when someone told me they hadn’t been on Facebook in over a year and I said, “Wow, you’re one-year Facebook sober.” They laughed. The next day, another person said they’d been off for two years — same comment by me, same reaction. But later, I found the term “Facebook sober” on Urban Dictionary — so much for my right to claim ownership of the term.

It’s unlikely that a new 12-step program is going to keep a significant percentage of the more than 2 billion people off of the social media platform any time soon, even though they know Facebook is exploiting their personal data for profit. While studies show that consumers believe the economic benefit of Facebook to them is about $1,000 per year, based on how much they would need to be paid to stay off the platform for that period of time, most will not pay anything to keep a company from tracking their data.

A study published by PlosOne in December 2018 quantified the monetary value that users assigned to participating on Facebook, using an auction experiment design.

Though the populations sampled and the auction design differ across the experiments, we consistently find the average Facebook user would require more than $1,000 to deactivate their account for one year. While the measurable impact Facebook and other free online services have on the economy may be small,* our results show that the benefits these services provide for their users are large.
* (Of course, this statement neglects the $40 billion Facebook realizes in annual advertising revenue.) 

While people claim to be concerned about privacy, they’re not willing to pay for it. A Survey Monkey poll done for the news site Axios earlier this month shows that three-fourths of people are willing to pay less than $1 per month in exchange for a company not tracking their data while using their product — 54% of them are not willing to pay anything.

Researchers at Stanford and NYU sought to determine the effects that Facebook deactivation would have on people’s knowledge, attitudes, moods, and behaviors. “This Is Your Brain Off Facebook,” published by the New York Times on Jan. 13, reports on this study.  A portion of the study participants were paid $102 to stay off Facebook for one month. The researchers stated:

Using a suite of outcomes from both surveys and direct measurement, we show that Facebook deactivation (i) reduced online activity, including other social media, while increasing offline activities such as watching TV alone and socializing with family and friends; (ii) reduced both factual news knowledge and political polarization;(iii) increased subjective well-being; and (iv) caused a large persistent reduction in Facebook use after the experiment.

Despite these findings, the Times reported “some participants said that they had not appreciated the benefits of the platform until they had shut it down:

“What I missed was my connections to people, of course, but also streaming events on Facebook Live, politics especially, when you know you’re watching with people interested in the same thing,” said Connie Graves, 56, a professional home health aide in Texas, and a study subject. “And I realized I also like having one place where I could get all the information I wanted, boom-boom-boom, right there.”

As I noted in my post last month, “Gen Z College Students Weigh-in on Personal Data Collection,” some GenZers don’t mind giving up their personal data in exchange for the convenience of targeted ads and discounts; others are uneasy, but all are resigned to the inevitability of it. One student summed up our mass acquiescence, saying:

“I do not feel it is ethical for companies to distribute our activities to others. Despite my feelings on the situation, it will continue — so I must accept the reality of the situation.”

The reality of the situation is that people are not willing to go cold turkey on Facebook.

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.

Our Digital Selves: Living Without the ‘Big 5’ — And 7,000 Others

There, once again, is the age-old privacy paradox, which predates our digital selves. Do we — individually, as a society, as a matter of policy — understand the data-for-value exchange that is inherent not just on the commercial Internet, but in practically every business arrangement we have?

our digital selves
Chet Dalzell snapped this photo with his smartphone’s camera. (Curses!) | Credit: Chet Dalzell

During the past couple of weeks, I’ve been enjoying a thorough attempt by one Gizmodo editor, Kashmir Hill, to live life one week at a time without the titled “Big 5” — Amazon, Apple, Facebook, Google and Microsoft — and then to do so all at once.

“It was hell,” she reported.

Well, that statement alone could be interpreted as “unpleasant” or “impossible” or “really inconvenient” or “unenjoyable, or maybe all of the above. Hill’s attempts to quit cold turkey appeared to be very earnest and objectively pursued, though her editorial approach is not without a point of view: “The tech giants, while troubling in their accumulation of data, power and societal control, do offer services that make our lives a hell of a lot easier.”

Do I feel powerless with no control? I do not, but that’s a personal choice.

There, once again, is the age-old privacy paradox, which predates our digital selves. Do we — individually, as a society, as a matter of policy — understand the data-for-value exchange that is inherent not just on the commercial Internet, but in practically every business arrangement we have?

To shut off all data flows might be thought of as an exercise of a Luddite. Every individual can choose to live life this way, at least in some measure. Or perhaps it’s an exercise of being jaded: Among us, there are those who believe social media’s popular “10-year challenge” is a not-so-secret plot to update everyone’s likeness for facial recognition software.

Take a Regular Digital Break, Please

I, too, pursue and relish a weekend where I put my devices away, and go off the digital grid for hours or even one day at a time. A walk in the woods, or park, or beach, with no device in reach — and with just my thoughts – is an empowering and recharging experience (for me). It can drive my friends and family nuts, wondering where I am — but they’re used to it by this time.

Mom:

“You didn’t play ‘Words with Friends’ with me yesterday. Is everything OK?”

On the other hand, every day, I observe fellow citizens who seem unable to navigate a sidewalk, or ride an elevator, or even sit at a bar or restaurant, without having their heads down in smartphones. Kudos to them for processing digital information constantly … I think. I certainly can’t do that.

Yet to have a bias — either in practice or in policy — that blocks responsible data flows, truly is an exercise in masochism. As participants in the marketing data supply chain, we have ethical and some legal obligations to be capable stewards of data. We have associations, self-regulatory codes, and regulators that teach and tell us what to do.

Beyond the Big 5, we also have thousands of companies in the adtech/martech ecosystem — at last count, nearly 7,000. Any could be the next “big thing,” as investment flows seem to indicate.

Image of Ad Tech - Mar Tech Breadth

Slide Source: “Outlook For Data Driven Marketing: First Look 2019,” The Winterberry Group, 2019.

On top of these, we have brands and agencies using information, responsibly, to attract (discover), create (convert) and retain (serve) customers. This is not evil. This is innovation — and we shouldn’t fault a data-flow framework that facilitates commerce, consumer choice and diversity of content. We should scrutinize it for harmful data usage — and regulate the harm.

In short, every information use should be vetted. Wisdom, rather than fear, must be our starting point in such examination, with a healthy dose of data reverence. In advertising, we can (and must) have both consumer privacy protection and digital innovation. Achieving such dual, laudable outcomes, however, cannot be achieved if we are required to just shut down.