Hey, Lawmaker: Marketing Moves Today’s Commerce, and Data Moves Today’s Marketing

Members of Congress, and even the White House, seem to forget or ignore that their very own campaigns depended on the flow of information about citizens and individuals and population segments to inform their campaigns. Their respective elections prove that data and marketing in concert are very effective, especially for incumbents. Yet listen to a few among our leaders, and you’d think data-driven marketing is a consumer privacy problem begging for a government solution

I’ll start this blog off with a disclosure: I’m a member of the Direct Marketing Association, serve and have served on various DMA committees, and I count the Digital Advertising Alliance and other data-driven marketing firms among my clients. In short, my livelihood depends on data-driven marketing.

Members of Congress, and even the White House, in good measure, seem to forget or ignore that their very own elections to office depended on the flow of information about citizens and individuals and population segments to inform their campaigns. Their respective elections prove that data and marketing in concert are very effective, especially for incumbents.

Yet listen to a few among our leaders, and you’d think data-driven marketing is a consumer privacy problem begging for a government solution. How they (some of them) ignore 40+ years of self-regulation success in data-driven marketing; U.S. leadership in information technology and its data-driven marketing application (they are not coincidental); and the economic powerhouse of jobs, sales and tax revenue that is created by data exchange for marketing purposes.

Research Proves Our Case … Again
In November, DMA and its Data-Driven Marketing Institute announced “The Value of Data” Study (opens as a pdf), which documented the economic impact: The data-driven marketing economy added $156 billion in revenue to the U.S. economy that fueled more than 675,000 jobs in 2012 alone. (Importantly, the study also provides state-by-state economic impact.) The full study is available here.

This past week, DAA announced results of its own commissioned research which focused on the value of digital advertising derived from data exchange—and its comparison to general ads online. The study reported that availability of cookies to facilitate information transfer increases the average impression price paid by advertisers by 60 percent to 200 percent. Additionally, ads for which cookie-related information was available sold for three-to-seven times higher than ads without cookies. Thus, the invisible hand of the market, once again, proves data’s value. The full study is available at http://www.aboutads.info/resource/fullvalueinfostudy.pdf.

We’ve Got Work to Do … with our Lawmakers
Yet President Barack Obama and Sens. Jay Rockefeller (D-WV) and Ed Markey (D-MA) might have Americans believe that National Security Agency surveillance of U.S. citizens, data breaches at retailers and other organizations, and data exchange to drive marketing is one big roll-up of the same issue.

We know they are not. Spying by government on its own citizens is an important civil liberty issue, and while I’m not a fan of Snowden hiding out, NSA revelations deserve a full debate on its own merits and threats. Data security extends far beyond marketing—and marketers and many lawmakers agree that we need one national data protection and breach notification standard (and not 50+1). Data-driven marketing is not a problem at all, but instead a huge boon to U.S. marketing success that depends on continued innovation and fair use of information principles, which deserves government support (or at least government staying out of the way).

Importing restrictive laws and regimes on data flows for marketing has the potential to ruin American commerce by killing relevance. At a time when consumers are becoming more skeptical of brands, the intelligent use of information to converse with consumers with resonance is a requirement of marketing smart today. Dumb marketing wastes resources, annoys consumers and frankly places us at a disadvantage globally. While culture around regions of the world is unique, I believe our sector-specific approach to privacy regulation based on consumer harm potential (credit, health, financial) is superior to omnibus privacy law (all personal data is the same) and has served our economy well. How terrible to find we have our own lawmakers who seem to fail to grasp the evidence. You can believe DMA, DAA and other advertising organizations are working hard to show policymakers the great value we create in the marketing profession.

Politicians sense moods … and read polling. In my next blog post, I’ll look at some of the perception challenges we face with consumers. Clearly, as much as consumers “consume,” marketing is not all that popular with some of them either. We have work to do with consumers, too.

Marketing Data: Do I Own My Own Name?

I’ve always been uncomfortable with the position taken by some privacy advocates that each of us owns our own information—and thus has some form of property rights derived from this information—and that marketers shouldn’t have use of that information without first having permission and providing compensation

I’ve always been uncomfortable with the position taken by some privacy advocates that each of us owns our own information—and thus has some form of property rights derived from this information—and that marketers shouldn’t have use of that information without first having permission and providing compensation. To this, I say—hey OK, but let’s be pragmatic.

Certainly, if I’m a celebrity, where my name and likeness has commercial value, perhaps as an endorsement, such an “ownership” rationale is a valid one.

But in the exchange of customer data for marketing purposes, this argument lacks merit, in my opinion. The value of my name on a mailing list, for example—mail, email, telephone, otherwise—has nothing to do with “my” name being on the list or, for that matter, “your” name being on that same list. (Even when we are both see ourselves as celebrities.)

Rather, the value of both our names being on the same list is by knowing the shared attribute that placed us both there—alongside the thousands of others on that list. In the world of response lists, it’s the sweat equity of the business where you and I both chose to become a customer that deserves the compensation in any data transaction, as it alone built the list by building a business where you and I both chose to become customers.

Yes, that marketer must provide notice, choice, security, sensitivity, marketing data for marketing use only, and perform other ethical obligations that are part of the self-regulatory process that have governed this business for nearly 50 years—recognizing that customer data is our most important asset, and that consumer trust and acceptance serves as the foundation of the data-driven marketing field. Privacy policies, preference centers, in-house suppressions and DMAchoice collectively serve the consumer empowerment process by enabling transparency and control in this data exchange.

In the world of compiled lists, where third parties assemble observed data for marketing purposes, again there is the sweat equity of the entities assembling and analyzing that data to “create” or “discover” the shared attributes of that data. Knowing these attributes is where the combined data derive their value. Marketers deploy activity based on these attributes to generate commerce. While the relationship between individuals and these third parties may be indirect, we still have the same ethical codes and opt-out tools governing the process. Recently, in the case of Acxiom, we’ve seen such a data compiler working to establish a direct relationship with consumers, providing individuals with the ability to inspect the data the company holds and to suggest corrections—as if the firm were a (highly regulated) credit bureau. (It is not.)

The fact that my name—Chet Dalzell—is on both response and compiled lists, to me, doesn’t entitle me to anything except to expect and demand that these movers of data act as responsible stewards of this information using well established ethics and self-regulatory methods. (Granted, in the US, there are legal requirements that must be met in such sensitive areas as credit, personal finance, health and children’s data.)

This flow of data, as the Direct Marketing Association most recently reaffirmed, generates huge social and economic value—and, in my view, my own participation as a customer in the marketplace is my agreement to allow such data exchange to happen. In fact, were it not for such flows, I might never have been provided an opportunity to become a customer in the first place. Benefits to consumers accumulate, while harm is nowhere part of the marketing ecosystem—other than to protect from identity theft and fraud. I find it fascinating some would-be regulators fail to grasp this truth.

That’s why inflexible government regulations—and opt-in-only regimes—and technology strictures that interfere with my interaction with brands are so troublesome. Such restrictions may claim to be about privacy; more often than not, they’re really motivated by political grand-standing, anti-competitive business models, and the forced building of new data siloes that do nothing to advance consumer protection—and potentially ruin data-driven marketing.

Yes, I own my name—and by choosing to be a customer of your brand, so do you own your customer list. Of course, I am the ultimate regulator in this process. For whim or reason, I can choose to take my business elsewhere.

Now, what about my Twitter, Facebook, Google and Yahoo! profiles?

Will There Be a ‘Snowden Effect’ on Marketing Data?

I didn’t even want to write this headline or blog post, given the fault-filled linkages some people make between marketing and something completely different from marketing. But it never seems to fail: Whenever some big news event captures the media’s attention, politicians’ attention surely follows. And when it has to do with consumer privacy, the results for the private sector—and use of marketing information in particular—are rarely favorable

I didn’t even want to write this headline or blog post, given the fault-filled linkages some people make between marketing and something completely different from marketing.

But it never seems to fail: Whenever some big news event captures the media’s attention, politicians’ attention surely follows. And when it has to do with consumer privacy, the results for the private sector—and use of marketing information in particular—are rarely favorable. This is true even when the responsible use of marketing data has NOTHING to do with the scenarios presented in the news.

U.S. legislative history is strewn with such evidence, linking (erroneously) marketing with some sensational occurrence other than marketing. Here are just three of them:

  • An actress is murdered in Los Angeles (1989). It turns out the murderer hired a private investigator to get her address from the state motor vehicle department, and then stalked and killed her. A bevy of state and federal anti-stalking laws are passed—but Congress passes an additional one, the Driver’s Privacy Protection Act (1994). Would you believe, state motor vehicle registration and license data is curtailed for marketing purposes (data that had been worth millions to the states, never mind losing the beneficial impact to automotive and insurance marketers and consumers), even though such data had nothing to do with the crime?
  • A child is kidnapped and killed, again in California (1993). A grieving father goes on a publicity rampage against presence of children in marketing databases—even though the horrible crime had nothing to with marketing, and even with state law enforcement officials testifying in public hearings following the crime that perpetrators of crimes against children most often stalk their victims physically (from an era prior to social media). Nonetheless, California and national media go after compilers of marketing data related to children. The stage is set later that decade for new privacy restrictions for children’s marketing data online.
  • Judge Robert Bork is nominated by President Reagan for the U.S. Supreme Court (1987). An enterprising reporter manages to publish a list of video titles rented by the nominee (all of them benign, by the way). A concerned Congress—no doubt thinking of its members’ own video rental history—passes the Video Privacy Protection Act (1988), shutting down marketing access to video titles from customer rentals/purchases.

And this summer, we have the National Security Administration revelations from Edward Snowden regarding public surveillance of U.S. citizens in the name of anti-terrorism. Now, we can only guess on what potential debilitating effects may be ahead for marketers, but you can bet some politicians or regulators are drumming beats for a response.

Privacy law in America should be about protecting individual liberty from abuse of information by the public sector—and leave the private sector alone, except in cases where there are demonstrable or probable harms from data misuse or errors. Such is the case with personal financial, credit and health data, for example, where the U.S. government wisely has taken a sector, pragmatic approach.

But Snowden’s government surveillance revelations could very well have a “chilling” effect on more broad marketing data collection and use, too. Politicians, in the name of protecting consumer privacy, may very well rush to curb data-driven marketing activity, rather than tackling the much-harder and real culprit, that is, spying on innocent Americans (and government acquiescence of such activity).

Concurrent to the NSA revelations, the Federal Trade Commission increasingly is vocal on “data brokers” and marketing activity—and trying to link data collection for marketing purposes to non-marketing purposes. Yet, it is dishonest, disingenuous and spurious to do so—and doing so fans fear and hypotheticals, instead of rational thought. There is no relationship between responsible data collection for marketing purposes—which only delivers benefits to the economy, and tax revenue, too—and data used for insurance and premiums, hiring purposes, and certainly the federal government’s activities to monitor internet and telecommunications in order to profile or detect would-be terrorists.

Marketers—for 40 years—have operated under a successful self-regulation code of notice, consumer choice, security and enforcement—and central to this is the use of marketing data for marketing purposes only. That’s as true online as offline. Where would we be without consumer trust in this process?

It may be very appropriate here to legislate what government may access—and how they may access—when it comes to personally identifiable information for surveillance or anti-terrorist purposes. But don’t even utter the word “marketing” in the same sentence. Let marketers continue with self-regulation: We offer consumers notice and opt-out, we focus strictly on marketing purposes only—and everyone benefits in the process.

Wearable Mobile Devices Are the New Black

This year’s hot trend in fashion is computers. Whether at SXSW or in the tech and media hubs on the coasts, people are excited about the watches, wristbands and “eyeframes” that double as computers. Not all of these gadgets will succeed and those that do probably will evolve rapidly from today’s versions. But the trend is real—and marketers need to take note. They can expect consumers open to new forms of discovery and deeper relationships with brands, but also who have less tolerance for advertising that’s irrelevant, disruptive or disrespectful of privacy.

This year’s hot trend in fashion is computers. Whether at SXSW or in the tech and media hubs on the coasts, people are excited about the watches, wristbands and “eyeframes” that double as computers. Not all of these gadgets will succeed and those that do probably will evolve rapidly from today’s versions. But the trend is real—and marketers need to take note. They can expect consumers open to new forms of discovery and deeper relationships with brands, but also who have less tolerance for advertising that’s irrelevant, disruptive or disrespectful of privacy.

Nothing exemplifies the widespread interest in wearable computers better than Pebble, a watch that has its own Internet interface, apps and waiting list of fans eager to buy it. Last year, the founders of Pebble went to the crowdsourcing site Kickstarter with just a vague business plan and raised $10 million from thousands of investors. In less than a year, Pebble started to ship product and, in the past month, has released programming guidelines for outside developers. Not to be outdone by a start-up, Apple, Google, Samsung and LG are all rumored to be working on smartwatches, and Nike has made a big splash with its own wristband that tracks calories burned—the Fuel Band. Probably the most ambitious of all is Google Glass, the smartphone/eyeglass hybrid that projects information directly onto the lens of the wearer. Initial versions for developers have begun to ship already.

All of these devices will take the mobile revolution to a new level. The original iPhone ushered in an era when consumers expect to receive relevant answers any time, anywhere, to any question—even if they haven’t asked it yet. Still, wearable computing adds another layer of complexity. With screens that are always on and always feeding information, there’s even less of a margin for error with irrelevant advertising, and more opportunity for location-specific discovery. There will be new types of data—e.g., biometrics, location, eye movements—that could be incredibly relevant to marketers, but also frightening for consumers already worried about personal privacy. As a result, most marketing opportunities will have to be truly opt-in and transparent in how data will be used—and how that use is actually a service.

Take Google Now, a service that lets users receive pertinent time-sensitive or location-sensitive information without asking for it. It’s currently on phones, but it’s ideally suited for Google Glass. Although Now has high use-value, there’s also a high potential for creepiness, something Baris Guletkin, co-creator of Now, understands: “We take privacy very seriously, and make it very clear what the user will get, and what kind of data we’ll be using, and lots of controls so they can turn things off that they don’t like.” Google is banking on the fact that a lot of people will make that tradeoff in order to get useful information on-the-go. If I’ve just landed in Paris on an overnight flight and I am walking to a meeting, I’m OK with Google knowing what type of food I like if that information is used to suggest boulangeries along my route with highly rated croissants. But not everyone will feel that way.

Current discovery engines, such as Yelp and Foursquare, could probably also make a relatively easy transition to something like Google Glass or evolved versions of a smartwatch. Other marketers, however, will have to create new ways to use personal data and tags within physical objects to provide information that’s pertinent and enhances a real-world experience, not interrupts it. Peter Dahlstrom and David Edelman of McKinsey have written a great article about “on-demand marketing,” They describe a scenario where a headset has an NFC chip that communicates with a smartphone and opens an app that shows the headset in different colors and has related offers. Combined with augmented reality on Google Glass, the possibilities for this type of technology are pretty exciting. Even if Glass doesn’t catch on with the mainstream population, it will likely spur innovation that will trickle down to smartphones.

In addition to discovery, a second transformative role for wearable computers may be in how they turn solitary offline activities into daily social activities, creating a durable bond with the brand.

Nike’s Fuel Band is a great example. Nike has taken the daily workout and turned into a shared activity. The wristband uses a motion detector to calculate the amount of calories a person is burning during the day and tracks it against personal goals. It also connects to an app that shares this information with friends, creating value by turning the fuel points into shared successes and, for some, a competition. Because it’s always on, it creates dozens, even hundreds, of daily touchpoints with the brand.

Fuel fully aligns the brand with staying in shape, a high value for many people, and the core need that its other products satisfy. Eventually, Nike could connect Fuel points to support public causes, which would align the brand with the core values of the “new consumer,” described by sustainable branding agency, BBMG,

“Thirty percent of the U.S. adult population—some 70 million consumers—New Consumers—are values-aspirational, practical purchasers who are constantly looking to align their actions with their ideals; yet tight budgets and time constraints require them to make practical trade-offs every day … To deliver on total value, it’s no longer about pushing products, it’s about creating platforms for ideas and experiences that help people live healthier, greener and better.”

The Fuel Band and competitors like Jawbone are such platforms. They don’t just turn offline activities into online, social ones, they also link the brand to the values of the customer.

The Fuel Band right now is one of the first wearable computers that has been a commercial success, because it enhances existing activities in innovative ways. We’ll soon see whether Glass, Pebble and others have similar levels of success. Regardless, we’ll continue to see new wearable computers down the line, and they will undoubtedly lead to new opportunities for marketers that are impossible to see today.

But Your Data Is Fine, Trust Me …

Data … that great big, hairy gorilla in marketing departments all across the globe. We have Legacy Data, Subscriber Data, Third-Party Data, Business Data, Personal Data, Master Data, Sales Data, Reference Data, Privacy Data, etc., etc., ad nauseum. Now, during the last few years, the latest and greatest—Big Data and its cousin SoMoBi (SocialMobileBig) data have entered the fray enough to make everyone’s head spin.

Data … that great big, hairy gorilla in marketing departments all across the globe. We have Legacy Data, Subscriber Data, Third-Party Data, Business Data, Personal Data, Master Data, Sales Data, Reference Data, Privacy Data, etc., etc., ad nauseum. Now, during the last few years, the latest and greatest—Big Data and its cousin SoMoBi (SocialMobileBig) data have entered the fray enough to make everyone’s head spin.

No matter what you want to call it though, it just boils down to simple information. Information all you marketers crave. Information about your customer, your prospects, your products, your competitors and the trends that will steer you to hitting those numbers in the next and future fiscal quarters.

There is just so much of it, you say? No one here knows what to do with it, I hear? Every department controls a piece of it and refuses to share, is the excuse?

Maybe true. But, with a little time, effort and—of course—some of those ever-scarce budget dollars, you can create an environment where the grain can be separated from the chaff to build a healthy and robust universal silo of data which will benefit and streamline the efforts of every area of your organization efficiently and profitably.

There is no cookie-cutter data model for the business needs of every organization, despite the host of plug-and-play database tools and marketing automation processes available today. The information that makes your business research and marketing program successful is likely to be much different from what works for even your closest competitor.

At the core, your primary contact data for customers and prospects needs to be acquired and maintained as strictly as possible. My good friend, Bernice Grossman, along with fellow direct marketing legend Ruth Stevens, have a whitepaper I always refer to when providing guidance to anyone striving to establish or reorganize the variety of information that quickly begins to accumulate from different sources, in multiple disparate formats. Written as a guide for B-to-B organizations, the reasons and methodologies hold true for B-to-C. Even with the changes in data availability and the explosive growth of social data availability in the industry during the last few years, the white paper addresses the core data requirements for contact and communication.

Outside of the core basics of data needed to contact, track and segment your data pool, determining exactly what it is that gives you the edge is Priority One in deciding what else you must have available to make decisions. In every conversation or discovery session around data and database design within a CRM, the persistent desire that comes up is wanting a “full 360-degree view of my customers.” While that is possible with simply the basic contact information you have as the core of your data, along with whatever historical transactions available to provide RFM, most users expect a much deeper dive. At the more extreme illustration of designing your data around the optimal user experience, you have this infographic from Visual.ly that has been making the social media rounds. While extensive, the many comments on the sites where it has been posted point to even more data sources being needed to be all-encompassing.

If you, and your business goals, are like most, your time and budget is more likely going to place your need somewhere between the most basic and the most extravagant of these two extremes.

Discovering your own sweet spot is where the best value proposition is to create and maintain profitability for your business. That is where I hope to focus in the posts that will follow on a regular basis. I will be sharing points of interest, ideas, solutions and strategies for identifying the most accurate and efficient steps to take in planning the housing and process flow of all the data you need for success … with a dose of irreverence sprinkled in liberally along the way.

Take Command of Marketing Data Governance—Because We Have To

The emergence of “big data” as an enterprise concern for many businesses and organizations is, as with most trends, both an opportunity and a concern. I recently was involved in reviewing new and recent Aberdeen Research on “Big Data”—how it is defined, how it is changing information volume (astounding in quantity), variety (both structured and unstructured, with tremendous pressure to integrate and make sense of it), and velocity (pushing the insight, analytics and business rules that flow from such data to lines of business that can best profit from it).

The emergence of “big data” as an enterprise concern for many businesses and organizations is, as with most trends, both an opportunity and a concern.

I recently was involved in reviewing new and recent Aberdeen Research on “Big Data”—how it is defined, how it is changing information volume (astounding in quantity), variety (both structured and unstructured, with tremendous pressure to integrate and make sense of it), and velocity (pushing the insight, analytics and business rules that flow from such data to lines of business that can best profit from it). An infographic that captures some of this research is now posted at Mason Zimbler, a Harte-Hanks Company, which created the visual presentation.

Alongside this current fascination and business trend, perhaps it’s not surprising that members of Congress, both Democrats and Republicans, also are posing questions at the marketing business as to how we collect, buy/sell, rent and exchange data about consumers online and offline, and if there is adequate notice and choice in the process. In the rush to capitalize on Big Data, we need to ensure that we’re collecting and using marketing data for marketing purposes only, and doing so in a manner that is respectful of fair information practices principles and ultimately serves the end-customer, be it consumer or business individual or enterprise. [See Rep. Ed Markey, D-MA: http://markey.house.gov/content/letters-major-data-brokers.]

All too often, privacy adherence is considered a legal matter, or an information technology matter—but I maintain that while these two business areas are important in respecting consumer privacy, it is marketers who have the most to gain (and lose) by smart (or insensitive) information practices. Data is our currency, and we must treat data (our customers as data subjects) as our primary asset to protect. Our method of marketing is in the balance. One or two major privacy mishaps can spoil it for everyone.

Of course, marketing data governance is far more than privacy compliance. Data quality, data integrity, data security, data integration, data validation and data flows within an enterprise all, too, are part of marketing data’s customer intelligence equation. It is in this spirit that the Direct Marketing Association recently introduced its newest certification program for professionals: “The Institute for Marketing Data Governance and Certification,” taught by marketing veteran Peg Kuman, who is vice chair at Relevate Group. The three-day course, which has launched on a two-year, multiple-city tour, is indispensable in understanding how multiple channels, multiple data sources and platforms, customer expectations and business objectives combine to command better understanding, tools and processes for data handling for smart integrated marketing. Forthcoming course dates and registrations are available here: http://www.dmaeducation.org/dm-essentials/marketing_data_governance.php

For three days last month in New York, approximately two dozen professionals from large and small enterprises, both commercial and nonprofit, attended the first seminar. I, too, attended. There were representatives from marketing, public relations, analytics, legal, IT and fundraising, representing brands, agencies and service providers. This group was engaged—providing examples, asking questions and reporting experiences as the curriculum moved along. (For those who don’t know Peg—a former client of mine—she is quite the facilitator.)

Alongside a workbook, I took home some great handouts, too:

  • A sample security policy; a sample information security vulnerability assessment;
  • A security due diligence questionnaire;
  • A sample vendor risk management program vendor questionnaire;
  • The latest copy of the DMA Guidelines for Ethical Business Practice (recently updated with new email append guidelines, by the way) and a bevy of news articles that captures the media’s and public policymakers’ current attention on consumer data in America.

The meat of the course tackled, among other topics:

  • Categorizing data and assigning priority and sensitivity (personally identifiable information, sensitive data and other categories);
  • Mapping data flows and interactions with customers; enhancing data with appended information, and ensuring its use for marketing only;
  • Having a data quality strategy as part of a data strategy;
  • Calculating return on data investment;
  • The emergence of digital, mobile and social data platforms, and how these present both structured and unstructured data collection and insight analysis challenges;
  • Assigning data “ownership”;
  • Calculating and assigning risk regarding security;
  • Monitoring security, investigating potential incidents of a breach, and handling a response to a breach were it to occur (using recent breach response examples of LinkedIn and Epsilon); as well as
  • Laws, ethics and best practices for all of these areas.

One of my concerns is the importation of European-style privacy protection in America, and current fascination with such protections by U.S. regulators and elected officials. That is worth another blog post in itself, but I can assure you that we need to educate politicians about the superiority of self and peer regulation where no consumer harm exists.

Thank you, DMA. Marketing data does not harm. It only creates consumer choice, commerce, jobs and (tax) revenue—and pays for the Internet and other media, too—and it is ridiculous to even entertain government-knows-better regulation of such information through a potential omnibus law in America, or other notions such as a government-mandated “privacy by design” requirement in marketing innovations. (On the other hand, I’m more than happy to see laws pass that protect Americans from potential government abuse of private sector marketing data—Big Brother should not be getting access to marketing data for non-marketing purposes, unless there is a demonstrable greater public good, where subpoenas are served and heard.) Privacy by design is smart business, but only when left to the innovators, not the policymakers.

Which brings me to close—and if you’re still reading this, I congratulate myself for not chasing you away. Big Data (which can incorporate far more than marketing data) goes hand-in-hand with marketing data governance. Whether a Big Data user or not, we all use marketing data everyday as our currency. Protect it. Respect it. Serve it. Govern it. So we can use it.

Don’t Be Creepy: Using Robust User Data for Ad Targeting While Respecting Privacy

When your brand possesses or has access to data that provides deep visibility into user interests, you should use that visibility to create more relevant ads, thus increasing performance while limiting costs. But with deep visibility comes deep responsibility to respect privacy. The fastest way to hurt performance is to cross into the creepy zone. Don’t be a creeper.

Google announced that on March 1 it will be updating its privacy policy to enable the integration of user data across Google properties. As it integrates more cross-property data, including information on user interests and demographics, Google can provide advertisers with more robust and precise targeting capabilities in search and display.

For instance, Google may uncover a certain person’s interests through their interactions on Gmail and Google+. This capability may someday enable an advertiser to direct search or display ads to that person based on those interests.

Although users can opt out of the experience and adjust and delete information that Google has collected, the privacy policy update has been met with some backlash. Lawmakers in the U.S. and European Union have asked Google to explain why the changes are necessary and how privacy will be protected. A privacy advocacy group sought a court order directing the FTC to sue Google, and sites like Gizmodo have urged people to take control of their privacy by switching to various non-Google-owned properties for search, email, social, photos, docs and video.

Assuming Google goes forward with the update and activates the potential for more robust targeting options, advertisers should keep a few things in mind to increase performance while respecting privacy:

1. There’s a fine line between appropriate and creepy. Ads that are more tailored to a person’s interests are more likely to satisfy that person’s needs. However, many users would prefer that advertisers don’t know everything about them. If a user sees an ad that’s eerily related to a Google+ or Gmail conversation they’ve just had with a friend, a line may have been crossed.

2. Users will blame you. Creepy ads harm people by making them feel as if they’ve been unwillingly observed. But who’s responsible for this unwanted observation? Technically Google observed the user, but the average web surfer doesn’t think about what’s happening behind the scenes. Users ask, “How did this brand know that about me? Have they been watching me?” Creepy isn’t always a label that users attach to Google (or Facebook or any other advertising platform). It’s a label attached to brands that push the platform’s capabilities too far.

3. Just because you can doesn’t mean you should. Users must agree to the new privacy policy in order to sign in to Google. Google provides an easy means within its Ads Preference Manager to opt out of customized or personalized search and display ads. Thus Google’s informing its users, obtaining their consent and providing them with privacy controls. But just because a person consents or fails to adjust their ad preferences doesn’t mean that it’s open season for creepiness. People shouldn’t have to choose between using Google and avoiding the creep factor.

As a marketer, don’t think that people agreed to diminish their right to privacy in order to use Google or another service. Respect privacy as a right that can’t be diminished, no matter whether a person opts in to a privacy policy.

When your brand possesses or has access to data that provides deep visibility into user interests, you should use that visibility to create more relevant ads, thus increasing performance while limiting costs. But with deep visibility comes deep responsibility to respect privacy. The fastest way to hurt performance is to cross into the creepy zone. Don’t be a creeper.

Trade Associations Bond on Industry Self-Regulation

With the threat of an online privacy bill looming, some of the nation’s largest media and marketing trade associations released self-regulatory principles on July 2 to protect consumer privacy in ad-supported interactive media.

With the threat of an online privacy bill looming, some of the nation’s largest media and marketing trade associations released self-regulatory principles on July 2 to protect consumer privacy in ad-supported interactive media.

The seven principles will require advertisers and Web sites to clearly inform consumers about data collection practices and enable them to exercise control over that information. The collaboration includes the American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association and the Interactive Advertising Bureau.

The Council of Better Business Bureaus is also part of the effort and has agreed, along with the DMA, to implement accountability programs to promote widespread adoption of the principles.

This is a big deal: Taken collectively, the participating associations represent more than 5,000 U.S. companies, and the task force represents the first time all advertising and marketing industry associations have come together to develop self-regulatory principles.

And it should be a big deal, quite frankly. Concerns around government regulation on the use and collection of data on the Internet has been swelling in the industry over the past few years as the medium has become all-encompassing. What’s more, the House Communications Subcommittee Chairman Rick Boucher (D-Va.) is preparing an online privacy bill right now that may contain an “opt-in” provision that would prevent companies from targeting consumers without their explicit permission.

The seven principles
The self-regulatory program is expected to be implemented at the beginning of 2010. The process, however, started in January, when the task force announced it was working on developing these principles in direct response to calls by the Federal Trade Commission.
The principles are designed to address consumer concerns about the use of personal information and interest-based advertising, while preserving the robust advertising that supports free online content and the ability to deliver relevant advertising to consumers.
The seven principles include the following:

  • The Education Principle, which calls for organizations to educate individuals and businesses about online behavioral advertising. Along these lines, a major campaign — expected to exceed 500 million online advertising impressions — will be launched over the next 18 months to educate consumers about online behavioral advertising, the benefits of these practices and the means to exercise choice.
  • The Transparency Principle, which calls for clearer and easily accessible disclosures to consumers about data collection and use practices associated with online behavioral advertising.
  • The Consumer Control Principle, which requires Internet access service providers and providers of desktop applications software such as Web browser toolbars to obtain the consent of users before engaging in online behavioral advertising, and take steps to de-identify the data used for such purposes.
  • The Data Security Principle, which calls for organizations to provide reasonable security for, and limited retention of, data collected and used for online behavioral advertising purposes.
  • The Material Changes Principle, which calls on organizations to obtain consent for any material change to their online behavioral advertising data collection and use policies and practices to data collected prior to such change.
  • The Sensitive Data Principle, which recognizes that data collected from children and used for online behavioral advertising merits heightened protection, and requires parental consent for behavioral advertising to consumers known to be less than 13 on child-directed Web sites. This principle also provides heightened protections to certain health and financial data when attributable to a specific individual.
  • The Accountability Principle, which calls for the development of programs to further advance these principles, including programs to monitor and report instances of uncorrected noncompliance with these principles to appropriate government agencies.

Sounds like a plan to me. What do you think? Do you think this initiative will stave off government regulation for good, or should these trade groups be doing more? Leave a comment here, and let us know how you feel.

An Ill-Timed Folly for Facebook

Facebook has caused quite a stir lately. About two weeks ago, it revised its terms of use, but the change caused such a turbulence in the blogosphere that the social media pioneer backed off and reverted to its old terms — at least for now.

Facebook has caused quite a stir lately. About two weeks ago, it revised its terms of use, but the change caused such a turbulence in the blogosphere that the social media pioneer backed off and reverted to its old terms — at least for now.

What temporary revision caused the uproar? Basically, the terms said members own their information on the site and control who sees it. But when they’d go to delete their accounts, Facebook would retain the right to the information, so friends still would be able to access the shared information. Facebook sated that it would have an “irrevocable, perpetual, non-exclusive, transferable, fully paid worldwide license” to material on the site, per the short-lived terms.

But after the new rules were posted, many people contacted Facebook with questions and comments about the changes and what they meant for people and their information. Many expressed distrust and aired suspicions that the site would sell or share their information with third parties. Users protested on the site, while external groups also took action. The Electronic Privacy Information Center threatened legal action.

Data-sharing issues have been dicey stuff among American consumers since well before the economy tanked. Facebook has become such an American icon that this revision was ill-timed. Facebook made a mistake and had best rectify it quickly before the site becomes just another fad.

CEO Mark Zuckerberg explained in a Feb. 16 blog post that the revised terms were intended to make the site’s policies clearer to users. “One of the questions about our new terms of use is whether Facebook can use this information forever,” Zuckerberg wrote.

“When a person shares something like a message with a friend, two copies of that information are created — one in the person’s sent messages box and the other in their friend’s inbox. Even if the person deactivates their account, their friend still has a copy of that message. We think this is the right way for Facebook to work, and it is consistent with how other services like e-mail work. One of the reasons we updated our terms was to make this more clear.”

“In reality,” Zuckerberg continued, “we wouldn’t share your information in a way you wouldn’t want … Our goal is to build great products and to communicate clearly to help people share more information in this trusted environment.”

Nevertheless, based on the feedback on his blog on Feb. 18, Zuckerberg said Facebook had decided to return to the previous terms of use while it resolves the issues people have raised.
But the matter isn’t resolved. The Harvard-schooled boy wonder of social media said Facebook is working on a new version of terms. The next version, he said, will be a substantial revision from where Facebook is now. It will reflect the principles of how people share and control their information, and it will be clearly written in language everyone can understand.

He also said Facebook has created a “Bill of Rights and Responsibilities” and a forum where users can discuss the issues.

The incident marks the third time that Facebook has backed off changes after users voiced privacy concerns. The site’s news feed and its Beacon advertising program drew criticism, which prompted the social networking site to increase privacy protections.

So, what do you think? Is Facebook doing the right thing? Is the flip-flopping affecting your opinion of the site? Let us know.

Authentication Alliance Marks Data Privacy Day With Consumer Trust Best Practices

To mark World Data Privacy Day, Jan. 28, the Authentication and Online Trust Alliance published its top 10 list of privacy principles and business practices. These practices, many of which have been widely adopted by AOTA members, are calls to action for companies to help maximize consumer confidence and ultimately spur economic growth.

To mark World Data Privacy Day, Jan. 28, the Authentication and Online Trust Alliance published its top 10 list of privacy principles and business practices. These practices, many of which have been widely adopted by AOTA members, are calls to action for companies to help maximize consumer confidence and ultimately spur economic growth.

To me, it’s pretty simple: Adopt these principles or suffer the consequences of a consumer trust meltdown. And that could invite regulation, according to AOTA Founder/Chairman Criag Spiezel. Here’s what the group recommends you do, edited a bit:

1. Ensure all privacy policies are discoverable, transparent and written to ensure consumer comprehension, accessible from every page of a Web site and/or e-mail.

2. Periodically contact users and provide them with your company privacy policy upon any changes for their review; allow for provisions for consumer choice or their data usage.

3. Establish and publish procedures for data collection, transfer and retention; perform third-party or self-audits for compliance.

4. Support collaborative, global, public-privacy efforts to increase consumer awareness and education, as well as the adoption of fair information practices and privacy/security regimes (e.g., the appointment of a national chief privacy officer).

5. Support self-regulatory efforts to adopt standard data retention/use policies.

6. Set and publish standards of privacy, security and data retention policies with clear accountability between first-party sites and third-party content providers and advertisers.

7. Create response plans for accidental disclosure of personal information and data breaches, including notification to consumers and governmental agencies. Provide relevant remedies to consumers (e.g., no-charge credit record monitoring services to those affected, or other remedies as appropriate).

8. Commit to authenticating all outbound e-mail with Domain Keys Identified Mail and/or Sender ID Framework to combat forged e-mail and potential privacy exploits within six months.

9. Transactional sites should adopt Extended Validation Secure Sockets Layer Certificates within six months or upon existing certificate expiration.

10. All consumer-facing sites should obtain privacy certification and seals from third-party providers or other third-party consumer dispute resolution mechanisms.

More details can be found here.

Are you following these best practices? If not, why? Let’s start a dialogue on the subject. Post a comment now.