It isn’t only Google and Facebook that tracks customers for advertising purposes…

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Online music streaming service Spotify believes that it can someday become one of the advertising powerhouses. But like its rivals in the advertising business, Google and Facebook, the company needs to collect and analyze lots of data on its customers. Spotify knows more than just what its customers are listening to, it also knows what they are doing and what you are going through.

The Spotify app can gather data from customers’ phones’ including accelerometer, gyroscope, and location data. This might be analyzed to find out if and when a customer works out or walks their dog.

And “Spotify (also) knows that you started playing Lizzo’s “Truth Hurts” at 23:03, listened to it for one minute, then searched for “break up” and listened to the entire four hours and 52 minutes of the “ANGRY BREAKUP PLAYLIST” without any pauses. Spotify might know to serve this listener ads about ice cream or (maybe a few weeks later) ads for online dating services.

Right now, Spotify is investing a lot in data science to figure out what all that data it collects can be used for. Privacy? Read more in “All the Ways Spotify Tracks You – and How to Stop It,” Wired.

Internet of Things: Comfort vs Privacy in a Connected World

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The Internet of Things (IOT), which we cover in one of our What’s Next? boxes (see Chapter 8) offers some promising consumer benefits. IOT connects devices (your sprinkler system, coffee pot, thermostat, and more) to the Internet. From there, the devices get smart — so for example, your sprinkler system sees there is a 90% chance of rain today and so it doesn’t water the lawn for the next three days. Yet there are tradeoffs as consumers lose privacy. This short (less than 3 minute) Bloomberg video can be assigned to students or shown in class to stimulate discussion. It might work well with Chapter 8 as you discuss Product or in Chapters 7 or 19 where we dig more deeply into privacy.

Facebook Transparency

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Facebook has suffered a number of self-inflicted wounds over the past year.  So much so that my students joke that they must have a calendar full of bad decisions and we’re just waiting to see which one they decide to roll out each month.  Impressively, Facebook recently announced that as of the end of February, users will be able to see how their information is used for ad targeting.  They are referring to the update as Custom Audience Transparency.  Once launched, users will be able to click on the top right corner of a Facebook ad and see which business uploaded that user’s information and highlight audience sharing that might have taken place.  This article from Wired covers the new update in detail.  According to Facebook, this update should help improve transparency for themselves and their advertisers.

What do your students think?  In my experience, students are relatively unconcerned about privacy and marketing students understand it is being used to help target ads that might be more relevant to their audience.  However, targeting was also used to help influence voters in advance of multiple US elections.  Is that still okay?  What about business implications?  How will Facebook’s financials be affected by the change?

He Knows if You’ve Been Naughty or Nice

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Welcome back, I hope everyone had a restful and relaxing holiday with friends and family!  When I saw this Marketoonist cartoon I thought it was very topical for the start of a new semester.  Marketing should be all about informing and enabling consumers but there’s always the risk (and temptation) to push ethical boundaries.  As we welcome a new batch of students, talk with them about where those boundaries lie.  Is it intrusive if consumers give permission to track information?  What if they didn’t opt-in but instead you utilize an opt-out strategy?  Are we doing a disservice to customers if we don’t utilize available tools and technology to optimize our messages?

Survey Overload

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Tom Fishburn recently ran this Marketoonist comic which hits close to home, particularly during holiday season.  We teach students the importance of making market-based decisions and getting direct consumer feedback is an important part of that process.  However, companies now inundate consumers with surveys.  The volume of surveys increases which leads to surveys being ignored which only leads to reminder messages and more aggressive survey tactics.

Marketing week ran a recent article by Tom Goodwin talking about this issue.  In the article, he talks about this dynamic and suggests the issue is rooted in a desire to gather easy to measure KPIs rather than really digging in to understand customer needs.  Electronic addiction is making it easier for marketers to gather information on consumers but we don’t always know how to properly interpret that information.  Marketing data analytics is an emerging need for companies to learn what information is worth gathering, how to interpret that information, and how to use that knowledge to drive strategy.