FEBRUARY 9, 2012 – With an increasing amount of consumers’ daily activities taking place online, the stores of data they create are also growing rapidly. Some in the marketing and advertising industries may think this would be a boon for business – allowing them to conduct market research and gain insight on their target audiences. However, there is a line between building anonymous consumer profiles and violating individual privacy. Critics argue that the industry is hurtling toward that point, if it hasn’t been crossed already.
A posting on the online business journal for the University of Pennsylvania’s Wharton Business School, Knowledge@Wharton, examines the risks and rewards of consumer data mining and target marketing. It notes that regulators are questioning the legality of tracking online behavior and using that to inform future campaigns. Last October, Jon Leibowitz, the Federal Trade Commission chairman, called those who gather data online “cyberazzi,” the source notes.
But supporters of the marketing tactic fire back, saying that delivering more relevant advertising to consumers benefits both parties. People aren’t distracted with materials they have no use for, and brands get to spend more efficiently by sending ads to consumers who may actually buy their products.
Anindya Ghose, a visiting professor at Wharton and co-director of New York University’s Center for Digital Economy Research, told the website that the increased availability and accessibility of information is empowering consumers and enriching their shopping experience. He adds that social media, and all the data that comes with it, is actually “democratizing marketing.”
“Companies can use my interaction with my friends on Facebook to personalize and highly customize products and services for me,” Ghose explains to Knowledge@Wharton. “There is very little explicit selling of data going on. It’s more like the data is out there; it’s stored and assembled, and it’s ready [for] intermediaries who can use it effectively…. I think the right word is that there is a lot of sharing of information.”
Others involved in the debate argue that this selling and mining of consumer data is nothing new, that it’s been happening for decades but has just taken a new form in the digital era. Wharton marketing professor Jonah Berger told the online journal that the only thing that has changed is the volume of information. Before the rise of Big Data, organizations just gathered phone and mailing lists, he says.
Digital privacy and control of information have become hot topics for consumers and marketers alike. The blog notes that consumers are becoming more aware of the tracking that occurs, and that there is a risk of the “creep-out factor.”
Andrea Matwyshyn, a legal studies and business ethics professor at Wharton, told the source that many consumers are starting to think they have no control over what details researchers see when they browse the internet. This could create tension between the people who want everything to be transparent and those seeking to maintain their privacy.
In an effort to create some structure in this burgeoning field, mobile marketing researchers are collaborating to establish a set of best practices and ethics for handling the data consumers generate with their smartphones and other mobile devices. The Mobile Marketing Research Association formed in January and aims to “advance the use of mobile devices for marketing research,” in part by supporting education initiatives and sharing the value of the “mobile marketing research channel for use by clients, researchers and participants.”
MMRA board member Michael Bare noted in the announcement that the excitement surrounding mobile research also had the potential to confuse or make some people uncomfortable. He added that having a set of guidelines would lend respect and credibility to the growing sector.