Consumer Privacy

This is not a topic that I have given much thought of as a marketer.  When I think of consumer privacy I typically think about the companies that use internet data as a part of a scam or way to try to get money out of unsuspecting consumers.  Or, I think about people who don’t understand that what you put on Facebook isn’t really private and you have to be an idiot to put something out there that you don’t want employers or friends to find.  From a marketing perspective I think that there is some benefit to having rich consumer data that can be used to have very targeted and specific messages; as long as consumers are getting that advertising in ways that are unobtrusive and in moderation.  I am not well informed on the processes for buying and selling consumer information (name, email, address, phone number, etc.), but I am against reaching out to consumers in obtrusive ways.  In the past it was telemarketing during dinner, now it is excessive emails.

The article, “A Web Pioneer Profiles Users by Name”, focused on sites that install cookies and sends identifying information to databases that store and sell consumer data.  This data can be used in a variety of manners, but mainly it seems to be used for targeted advertising or communication.  I think that people who are using the internet expect some types of information to be made available to marketers – for example, I do a search for a flight to Venice on Google, I would be ok with later seeing banner ads for canal tour companies.  What I think people don’t expect is using a website that provides a service, such as the e-card site Pingg.com, to sell your information to a company that is later going to contact you directly through email.  From there, communication to consumers can easily become obtrusive and annoying.  As a consumer myself when I am targeted too specifically or in an annoying way it makes me suspicious of the company and less likely to buy what they are selling.

Something that I think it really interesting when it comes to consumer privacy is tracking consumer purchases.  Amazon does this really well with the wealth of data they have available – giving consumers very accurate recommendations and advertising.  At Target there is an entire department that focuses on guest insights and they are now more than ever better able to track consumer spending.  An interesting article that I read in the last month told the story of how Target is now able to know when you are pregnant just by your behavior in the store. Target assigns every customer a Guest ID number, tied to their credit card, name, or email address that becomes a bucket that stores a history of everything they’ve bought and any demographic information Target has collected from them or bought from other sources. Using that they will assign each shopper a “pregnancy prediction” score which is based off of a set of typical products purchased by women who are early in their pregnancy.  They will then target the consumer with pregnancy and baby advertising and coupons, hoping that she will register and purchase baby supplies with them.  Although I am slightly biased, I actually think this is a great and innovative way to get new customers in the door, increase revenues, and gain loyalty.

The big issue with this type of data monitoring and predictive analysis is what you do with the data.  The example in the article was about a teenage girl who received the “Congratulations on your pregnancy” advertising package from Target.  Her father found it and the story goes like this…

“My daughter got this in the mail!” he said. “She’s still in high school, and you’re sending her coupons for baby clothes and cribs? Are you trying to encourage her to get pregnant?”

The manager didn’t have any idea what the man was talking about. He looked at the mailer. Sure enough, it was addressed to the man’s daughter and contained advertisements for maternity clothing, nursery furniture and pictures of smiling infants. The manager apologized and then called a few days later to apologize again.

On the phone, though, the father was somewhat abashed. “I had a talk with my daughter,” he said. “It turns out there’s been some activities in my house I haven’t been completely aware of. She’s due in August. I owe you an apology.”

http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/

Funny enough, last week Carolyn Cross in our class told me she got a letter in the mail, addressed to her from Target that said, “Congratulations on your engagement!”  Carolyn is actually single and thought the letter was funny, but sent to the wrong person who just went through a bad break-up that coupon book could be disastrous.  We have all of this rich consumer data it truly is important that it is used in an accurate, non-intrusive, and ethical way.

Consumer privacy is something that I will have to think about in my next role in CPG brand management.  Traditionally, a CPG company that produces products that are sold in retailers/grocery stores will get their data from grocery loyalty cards and Nielsen data.  Recently, more and more brands are reaching consumers through Facebook and their own websites.  Big brands probably don’t need to buy consumer data from companies such as those mentioned in the article, but who knows?  The more data we have the better we will be able to reach those key consumers.  I think there is still some grey area around this topic and as I move into the “real world” it is definitely something I will have to be aware of.