Saturday, February 07, 2015

Privacy in the Digital Marketing Age

One of my Professors once said: in this internet era, privacy is dead.

Indeed, it seems that out of all the people who live in this world, the second person who knows us well besides ourselves is Google, or Apple if you are a 100% iPerson. Today it is almost a norm that wherever we go on the internet, we are surrounded by advertisements, and these are not just any ad, very often these ads would show products we just browsed, recently purchased, or even something related to what we just searched. Sometimes it almost feels like we have been followed everywhere we go, except that not many people know who are following them. When we were discussing retargeting in class, most of the responses from students concentrated on one word: “creepy”. Yep indeed, it is just not normal to realize that there seems to be some eyes behind our back when we browse the internet, it annoys people so much that some browser plug-ins were born just to clear up your trace when browsing.

But do people really always resent the idea that their privacy is not protected on the web? Well, maybe it is too soon jumping to the conclusion. After all, it appears that we all trade in our privacy for some service. Gmail, Facebook, Android, iPad to some extent they exists for free because we are actually paying with our personal information, which was in turn used by companies to improve their advertisement targeting. The question is, though, is this healthy?

A group of Marketing researcher did an interesting experiment in Shanghai. Since the mobile phone service carriers in China have the right to push commercial text messages to users, it appeared to be one of the few places where we could test how much people accept the idea of targeted ads without been annoyed. The researchers developed a geo-fencing system combined with store sales data in certain shopping malls. Then, when they detect someone walking into the “fence”, who have shopped in the store before but have not returned for long, the mobile network would push out a message saying: “Hi Mr/Mrs.X, YYY stores thanks for your earlier purchase with us. As a gratitude to our loyal customers, here is a 20% off discount if you make a purchase within these three days.” Since cellphones are very personal device, you would expect a lot of people complain about this type of spam messages. To the researchers’ surprise, not so many people complained. Rather, a fair amount of them actually did revisit the store and made another purchase. There were no indications that they feel offended whatsoever! If they are so comfortable with targeted text message pushed to such a personal device they have, does it really make sense that they would complain about targeted ads on their browser which is arguably less personal than the cellphone? The result seems puzzling in explaining human rationale.

Perhaps this new era with targeted ads synced with every service would push people to adapt and live with them. It is hard to say what would become the future, are we all going to accept this as a norm? Well, there is certainly a possibility for that. At least from the study result, it seems that people can comfortably accept targeted ads when they really bring values or convenience to them. If the same can be applied to online advertisements, then it would not mean that people hate targeted ads in general, but only mean that the current targeting method is way too naive to figure out what people really want. With the advance of big data and marketing analytic models, maybe we would see the day come when the targeted ads can really bring the “just right” product to the exact consumer. Isn’t that what marketing is about?

It may sound controversial, but what the professor summarized may very well be the reality of the future: perhaps it is time for us to forget about all the privacy complains, and embrace the advances in technology that would eventually bring us the most efficient communication between firms and consumers.

No comments: