Improved ad targeting at the expense of privacy

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Advertising continues to shift away from traditional media and more to digital media.  In particular, mobile advertising is the hot platform these days due to it’s ability to not just target customers with a specific profile but also take advantage of location information.  The customization and filtering enabled by digital advertising is helping marketers be more effective and more efficient with their promotional strategies.  A restaurant no longer needs to offer a generic promotion to all customers, they can push a coupon for the item most frequently ordered by each specific individual.

However, according to this article from Wired.com, researchers at the University of Washington have found that this deep degree of ad personalization may carry a price consumers aren’t aware of.  The researchers found that for just $1000 anyone can track a target’s location, learn what applications they have on their phone, routes they take to/from school or work, etc. with significant accuracy.  The article goes on to say that consumers are generally unconcerned about individual companies having location information and other limited data because they trust those institutions, their motivations, or the legal system to protect them from abuses.  However, this shows that any individual can exploit information shared across multiple apps and websites to spy on a specific individual.

The trend toward personalized, location-based advertising is likely to continue.  Do companies have any ethical issues to consider?  Should companies that conduct this level of advertising be required to educate consumers more on the consequences of opting-in to these services?

Can software detect emotions? How can marketers use this? Should they?

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Screen Shot 2015-02-06 at 3.02.36 PMPowerful computers now allow software to read people’s emotions. Some of this new software and various applications are described in this article and the video below “The Technology that Unmasks Your Hidden Emotions” (Wall Street Journal, January 28, 2015, non-subscribers may need to click here).

This article and/or video might be used to spark your students’ creativity and problem-solving. The article describes a technology, but only a few applications. You could have your students read the article (or you could show the video in class) and then ask your students to design a market research study that uses the technology. Alternatively, you might ask students how a retailer like Best Buy or a specialty store like say Victoria’s Secret. The software also raises privacy concerns that you might choose to discuss. We have also posted this at Learn the 4 Ps. 

Psychic Shopping – Stores May Someday Send You Stuff it Knows You Want

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psychic-readingsAs you know, big data and predictive modeling are getting pretty darn good at predicting the brands or products an individual might want to buy. It is not hard to imagine a day (perhaps not not too far into the future) where retailers are so good at predicting that they know what we want or need before we do. Target stores already knows what brand of shampoo a customer buys — and that they buy it once a month. So what if they just placed an order for us and shipped it out? Would people be interested in this service?

Harvard Law professor Cass Sunstein was curious. So he commissioned a survey and asked people. He appears surprised to discover that about a third of American consumers would be comfortable with stores sending us stuff it thought we wanted. You can read the details of his study in “Shopping Made Psychic” (New York Times, August 20, 2014).

I don’t think we are too far from very accurate systems that will predict our needs and wants. What are the implications of that for retail stores? What about consumer privacy? We also posted this at Learn the 4 Ps. 

Retailers see opportunity in tracking consumer movements — consumers don’t like it

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tracking-shoppersMarketing managers are  excited about opportunities to leverage location data from consumers’ cellular phones. There are many potential uses of this information – maybe you get a coupon “text message” for $1.00 off of Dreyer’s new Cinnamon Bun Fun Slow Churned ice cream just as you approach the frozen food section at your local grocery store. Starbucks might text you a discount on a Frappuccino as you approach a Starbucks store. Of course Starbucks might also use that data to know that you have recently visited a rival coffee shop — and maybe that fact will get you a bigger discount. You can only begin to imagine the potential for this data. This article recognizes that this invasion of privacy doesn’t exactly appeal to consumers — “Consumers hate in-store tracking (but retailers, startups and investors love it)” (Fortune, March 24, 2014).

This article might be used to stimulate discussion on technology, privacy and ethics.

The latest about online advertising

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There is always something new in online advertising. Here are a couple of articles and a video that will give you some new information you can share with your students.

First, let’s motivate the topic with some research that shows “Online Ads Best TV Ads When it Comes to Recall” (Visible Measures blog, May 2, 2013).  “Data from Nielsen shows that viewers have much higher recall of online ads than they do of TV ads. Message re call of online ads is double that of TV ads and brand recall is nearly double that of TV. Additionally, viewers tend to like the ads better online than they do on TV.” Click through to the short article to learn some of the reasons for the success of online advertising.

Second, new technology is emerging that allows advertisers to track us across the different platforms we use to access the web. So now, what advertisers learn about us as we surf the web on our laptop can be used to serve us advertising on our mobile phone. They can also target us at specific times of day. This whole topic raises privacy issues, too. Learn more by reading this Wall Street Journal article “Online Ads Can Follow You Home” (April 29, 2013 – non-subscribers may need to click here) and the associated (somewhat technical) video below.

The articles and video have content that will appear in the next editions of our books — but you can share these insights with your students the next time you cover online advertising or want to discuss technology, segmentation, targeting, or privacy.