Sunday, November 24, 2013

Behavioral Advertising and Your Privacy: Facebook and Google Push Forward

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 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.

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/>.

10 comments:

  1. I believe Google and Facebook see the benefit to squeezing information out of online consumers. They both exist to provide something to a consumer, may it be an engine to search on or a media to use to socialize, they are going to do everything in their powers to do what is necessary to get a better idea of the consumers using their sites. I believe what they are doing is a blessing and a curse. For people who use Google and Facebook for business purposes, it is a blessing because they are able to hone in on a group of people that is their target audience. As opposed to wasting their efforts targeting everyone and barely getting a bite. The curse is the invasion of our privacy. They look at who, what, where, when, and whys of the websites we search for on the internet. Our privacy is completely open to these websites to do what they want with this information.

    What could online consumers do about this? They can either stop using the internet all together and just stick back to the olden days. Or, they can be smart about their browsing. There are several ways to keep your browsing private. Options for "private browsing" are available on most engines used to surf the net. Using a public computer as well allows for the ultimate privacy. It is either we jump on board and allow our privacies to be invaded, or we become super paranoid and take precautions to prevent our virtual footprints to be tracked and recorded.

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  3. As I mentioned in my blog I don't agree that Facebook and Google and all these sites are invading privacy; however I do believe that this data mining behavior is completely and 100% unethical. We "trust" these sites to provide us with a service and forms of communication. What they do with what we share on these sites is 100% up to them. This is why corporations should be held liable and accountable for any and all unethical behavior that may affect any inside and outside party in a negative way. We share our lives on these sites we shouldn't complain about privacy, we should complain about the way they utilize this information to improve business and infiltrate the consumer and his or her behavior. Not everything is bad, targeting ads according to consumer is a better way to advertise to the masses and improve marketing effectiveness. I think that Google and Facebook will push forward; however we should voice concern over the ethics of their strategy and actions.

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  4. Professor this was a very interesting blog subject that you have brought up. In my opinion behavioral targeting is not an invasion of privacy, like I stated in my blog big brother is always watching, all these companies are doing is segmenting us by our online behaviors and tendencies to market at us for the products that they offer. When I feel that one is invading my privacy is if my personal information is being compromised or misused for unethical practices. I have always been of the opinion that one can only feel like their privacy is being violated if they are not acting appropriately but if you are a web user that used it for recreational or educational purposes there should be no reason to fear if these sites are being tracked by someone in order to target us as consumers. If you do the right thing you will always succeed and have nothing to worry about, if someone is watching me on the sensiblemarketing website posting a comment to a blog I'm sure that will not be very useful for Nike per say but If I'm on Espn.com that could be a behavior that Nike might like and possibly target me this holiday season for that new pair of Nike's 5.0 that came out a few months ago. To me its all good and ok and if I as a consumer decide to be a bait for that advertising that's totally up to me because I have the power to decline it and move on as well.

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  5. Great post, I am writing on a similar topic about whether the collection of this data is ethical or just good business. I understand that marketers need a new way to sell their product effectively, but let's not forget that with everything must come standards and rules to live by. Without these clear and transparent guidelines, the consumer is going to feel threatened and that may ultimately hurt the sales of every company. I also feel that the naturally "old school" or non-tech savvy individuals are at the mercy of the collector. Because as they use a new a computer that they do not fully understand what goes behind it, they are being taken advantage of and their privacy is being destroyed. Rules should be set and information should be guarded by consumers like gold.

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  6. Google and Facebook are kings when it comes to online adverting and marketing. And for good reason too. As time passes and as technology advances these companies will find new ways to segment consumers even further in ways that no one has thought about just because they have alot more information available to them then no one else.
    There is not much that we can do except talk to our local politicians and say that we are against what these companies are doing with our information. They can then fight and make laws to support our cause.

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  7. Great topic. I believe that behavioral advertising is invasion of privacy but I'm not bothered by it. Technically Google and Facebook are working on the down low to make money of us, but who cares! Would we want google to disappear? would we want Facebook to disappear? my guess is no. I don't mind companies finding out what i like by my internet activity. The fact that Im constantly exposed to companies and items that i may want, makes my life easier. I don't remember rea-searching for items i bought, really rare now i jus seem to seem them around my online activity. all
    this controversy about it and how is invasion of privacy is not going to get anywhere. If they happen to stop companies like google or Facebook to continue sharing our info, advertisers will find another way.

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  8. Professor,

    I find it very intriguing how privacy has been a reoccurring topic in our blogs. In my Lifestyle blog I have also mentioned privacy many times. It is really interesting how although the Internet is evolving and basically becoming a means for everything we do (a real problem-solver if you ask me) it is simultaneously creating blogs. It's like the saying "Damned if you do, damned if you don't". Online posting and privacy is like a tug of war, you want to use what is available to you for your benefit but you don't want everything exposed. I believe Facebook and Google will move forward and the the issue of privacy will fade with the generation.

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  9. I do agree with you in so many points, but we need to be clear that it is a double age blade. There are more poores and there are few riches, good and evil and so on. Behavioral advertising is extremely good for advertisers, but a rico off for customer. Behavioral advertising makes the use of ads more cost and time efficiently. I just think we need to educate more the customers about data collection, and how they can opt out of it if they want. That way both sides of the valance will have equal weight.

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  10. The Internet is always developing and improving to make it more efficient and productive for people to use and that goes for websites as well. I do believe that Facebook and Google will continue to get more and more information from customers to use it to micro segment the Internet world and to also provide more target marketing offers to people. In my personal opinion I think that this is a good thing because the Internet is getting more and more personalized to fit peoples needs. For example I think that if Google knows you like to shop online for shoes I don’t see a problem with them showing ads of shoe sales, etc. I don’t think that it‘s deceiving in any way. If the Internet becomes more personalized I think companies will be able to reach the consumers that will be interested in their goods and services and I think that is a great thing. I don’t see a problem with the Internet bringing products that interest you to your attention, its up to the customer to decide what they want to do with that information. I don’t think there is anything consumers can do to change the fact that the many websites can use personal information to target and segment them.

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