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.
The issue of privacy has been discussed numerous times in the past (in this blog several times – click 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.
Last year Facebook 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 were 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 announcement that it would combine information from various sources to create better search results also irked consumer advocates who felt that building detailed profiles from online behavior is an invasion of one’s privacy.
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.
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/>.