Long before the days when snake oil salespeople would deftly select their marks from a crowd of curious onlookers, sellers have been using market segmentation to determine which customers, or more generally which types of customers, are more likely to succumb to a particular set of marketing efforts and which are presumably a waste of time. (Or in the latter case, which segment would benefit from a different set of marketing efforts.)
Fast forward to the world of e-marketing where electronic data collection and detailed information on potential customers allow marketers to divide markets into subsets more easily and more accurately than ever. Rather than use only state-of-being characteristics (such as demographics, socioeconomics, and geographic features) and state-of-mind characteristics (such as attitudes, interests, and opinions), online marketers can now use behavioral characteristics such as which websites are visited, which hotlinks are clicked, the pattern of online web surfing, and the timing of each visit. This behavioral data provides additional information that allows marketers to target consumers with advertisements or product offers that are more likely to be received favorably. This is the essence of online behavioral advertising (also called behavioral targeting).
What does this mean to consumers? The good part of behavioral advertising is that consumers are likely to receive more advertising that is relevant to them and less that is irrelevant. Behavioral advertising also should increase marketer efficiency, which should allow marketers to offer products at lower prices if the marketing cost savings are passed on to the consumers. The downside, however, is that consumers may feel that their privacy is violated by the intense monitoring and data sharing that occurs due to behavioral advertising.
What’s New?
The issue of privacy has been discussed numerous times in the past (in this blog several times – click here, here, or here for some examples). But now Facebook and Google have been accused of pushing the data collection portion of their behavioral advertising efforts even further.
Facebook recently announced that it would require its subscribers to use their new Timeline format for their profiles. Although technically, this would not provide any additional personal information than what a user has provided in the past, privacy advocates are concerned that the new format would make information, particularly older postings, more easily accessible. (Rather than having to press “older posts” continually and purposefully, the information could be acquired with just a little scrolling and a simple click.)
As for Google, the recent announcement that it will combine information from various sources to create better search results also has irked consumer advocates who feel that building detailed profiles from online behavior is an invasion of one’s privacy.
So What?
Although many online consumers express concerns about the privacy of personal information, they continue to make purchases, provide information on Facebook and other social media platforms, and/or surf the internet non-anonymously (e.g., while logged into one of Google’s properties such as YouTube or Gmail). Thus, the push by consumer advocates to have new laws created that limit the data collection and consolidation capabilities of Facebook, Google, and the other large online forces will not carry much weight. (Not to mention that both Facebook and Google have increased their political lobbying spending greatly over the past few years.)
What do you think?
Will Google and Facebook continue to squeeze more information out of online consumers and use it to microsegment the internet population, providing even more targeted marketing offers? If so, is this good or is it bad? Better yet, is there anything online consumers can do about it?
Segmentation is sensible, but so is a bit of privacy.
Be sensible.
Anthony
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A little more reading...
Acohido, Byron, Scott Martin, and Jon Swartz (2012), “Consumers in the Middle of Google-Facebook Battle,” USA TODAY (January 26), <http://www.usatoday.com/tech/news/story/2012-01-25/google-facebook-competition/52796502/1>.
Hart, Anne (2012), “Google Plans to Follow Online Activities of Users,” Allvoices (January 25), <http://www.allvoices.com/contributed-news/11378223-google-plans-to-follow-online-activities-of-users>.
Kupka, Anna (2012), “Facebook Timeline Now Mandatory For Everyone,” Forbes (January 24), <http://www.forbes.com/sites/annakupka/2012/01/24/facebook-timeline-now-mandatory-for-everyone/>.
I declare the loss on privacy, due to the internet usage. However, is very easy to say that the people who say they want privacy should resist from using social networks, or participating in any online activity...In today's world, with all these rapidly technology changes, those who do not use these electronic media are left behind and miss out of critical information. So, at the end we are force to pick one of these two choices, to do not have privacy or being excluded from modern life.
ReplyDeleteWell said, Alba. It's likely passed the point where participating in online social networking is an advantage. It's more that NOT participating is a disadvantage. And with that participation comes a certain breach of privacy.
DeleteFacebook and google do share our information with third party companies. There are a few things we can do to control what information is shared but at the end of the day we have to accept that our information is more public than it used to be. The best to avoid personal, sensible information to be share is not posting it online. In other words not because they asked for your age and address necessary means that you have to publish it. Keep important information with you and post only what you thing everybody else have the right to see.
ReplyDeleteAs technology advances; so is the amount of information that anyone can have at hand. Internet sites are becoming more user friendly and also requesting more information from their users. It is almost hard to navigate the net without leaving some kind of footprint. However, as users, we can limited the amount of information that we freely post on sites. Ultimately, it is up to us what is it that we want to share others with. BE SMART! DON'T SHARE ALL YOUR 411
ReplyDeleteAs you well said, online consumers complain about the privacy issues, but they continue shopping and publishing their interests and personal information throughout the social networking Websites! It is like complaining about how dirty the garden is but at the same time throwing away garbage in it. By any means I intend to say behavioral advertising is like garbage, but I think sometimes we need extreme comparisons so people can understand the idea much better. Consumers need to understand that nobody is violating their privacy,but that they have made the choice of giving it away. They can decide not to share it by simply opting out from these websites! Simple as that. You can't have the best of both worlds!
ReplyDeleteNot only do I think that Google and Facebook will in fact continue to squeeze more information out of online consumers and use it to micro-segment the internet population, but I also believe they have every right in the world to do that. This is a net positive for us as consumers and the companies trying to target their messages to the appropriate recipients.
ReplyDeleteThe only way online users can attempt to stop this is to refuse to use these sites. You can't simultaneously contribute loads of information to these sites while also complaining that they're using it to their advantage.
Knowing that all my purchases online and web browsing histories are monitored I still do all the activities. Indeed, behavioral advertising helps companies to focus their marketing, and it works well. As a result we always need to keep in mind that our information will be far beyond.
ReplyDeleteConsumers have little options. One option would be to select a different browser. For example some select “Dog Pile” as an alternative. Another options is to not make use of Facebook and other social networking sites. Lastly, consumers should lobby and contact their congressmen or women to vote for privacy and liberty. http://emarketingcafe.blogspot.com/
As a future online marketer, I believe that Facebook and Google does have the right to use personal information for their advertising benefits. What I believe should change is the way the information is being collected. If Facebook sent out a questionnaire with topics of interests that a person may answer, then they will be able to cater to their wants and needs without being too invasive.
ReplyDeleteThe only problem once again with this is the fact that our society has become obsessed with posting and giving out personal information about their lives. Twitter, Facebook, Myspace, Instagram; those are all new mediums where people publish their lives to the world. So how can people be hypocritical enough to say marketers are invading their privacy when they agree to give their privacy away.