What is Targeted Advertising, and its Benefits for both Customers and Manufactures-Part 3

By December 24, 2014Uncategorized

Targeted marketing like every other concept has its pros and cons. For instance, in 1990s Erick Larson, the author of The Naked Consumer raises some concerns about targeted psychographics and targeted advertising. He started his book with the letter that he receives for his daughter’s birthday, and he mentioned his concerns that how the marketers know everything about his private life. He realized that, marketers try to get as much information as they can. Then offer him and his family substantial amount of goods based on his personal information. Then he mentioned technology and the way technology helps marketers to gather more information. For instance, he mentioned barcode readers that can read barcodes in the shopping centers. Marketers gather the scanners’ data in order to evaluate the market and sell more to consumers. Finally, he mentioned his concerns about his privacy, and the way he feels that he does not have privacy anymore and marketers know him even better than himself.

Companies must collect customer information in order to do business with them. The problem is all companies must respect their consumer privacy. Thus companies have to find a way to both collecting data and respect consumer privacy. These data collection and consumer privacy are conflicting subjects together, and sometimes companies violate their consumer privacy while they are collecting data. Like every other aspects of business, collecting private data has its own laws. If a company violates these laws, it will be punished. Obvious and recent example of these types of violations could be Google. According to Grunewaldz “Google map cars were collecting data from unsecured Wi-Fi networks.”  Since the cars were collecting that data without informing network owners, their activity marked as an illegal activity. Thus based on Gruenwald “they had to pay fine and also delete the collected data.” Another good example could be DoubleClick. This company was trying to connect people online life behavior with their offline purchase history. Since this type of tracking could lead the company to completely identify each individual and their private data, DoubleClick activity considered as an illegal. According to Marilynn Larkin, “Pressure from the Center for Democracy and Technology (www.cdt.org), among others, and an investigation by the US FTC, forced DoubleClick to stop this practice.”

Erik Larson claims, “Someone is watching his family and gauging its process through time”(Larson 4). Larson means that marketers and manufacturers are the ones who watch everyone’s life in order to sell them products. Data collection is because of the nature of the American market. It leads companies to gather information in order to survive among other business like them. However, they should be cautious about how, when, and why do they collect data. The basic rule is more data will be better for the future marketing. The person who gave marketers that information was Larson or his wife by signing up for the club, buying something with their credit card, etc. Otherwise, how they know what is going on in his life? That is correct that companies are collection information, but they collect information with consumers tacit consent and even active participation. According to the U.S. Small business Administration “for many companies, collecting sensitive consumer and employee information is an essential part of doing business. It is your legal responsibility to take steps to properly secure or dispose of it.” Which means as an American citizen, each person has the right to read the company privacy disclosure. Then he can decide whether he wants to do business with that company or not. Marketers collect consumer information usually when consumer join a club, buy something online, or use his credit card. If consumer does not want to give his information to the marketers he should first read the store privacy policy then, he should not buy from online stores and finally pay all his purchases with cash. Larson did not mention whether he read any privacy policy anywhere. As a result, he cannot complain that his life is under surveillance without his tacit consent and even active participation. Keep in mind; it is possible that companies gather information from their affiliate partners. If they gather information from their affiliates, their affiliates definitely should have a privacy policy which states that how they share information with their partners.

Larson started his book with the marketing letter. He stated that America becomes a consumer culture and marketers “adapt his special life events to the commercial moments” (4). Every one has some sort of special times in her life. Sometimes marketers try to sell their products to the person at that moment. Since the person usually gives the information to the marketers, when they send marketing letters to him he can simply ignore them, but he cannot complain about them. Each person needs material goods in his life whether it is a basic need like food or simple clothes or luxury goods. In order to gain these materials he has to research and look for what he needs. Marketers are offering the opportunity to the person to get his products with discount by signing up for clubs, newsletters, mailing lists, and etc. Consumers pay the values of discounts with their information. Thus both consumer and marketer will win the game. Consumer wins by getting discounted products and marketer wins by getting consumers information for the future purchases. Another modern example of collecting data with offering discounted service could be online business like Google and Yahoo. They offer us free services in exchange to showing us ads from their sponsors, so they can have revenue and pay their maintenance costs.

Larson’s other concern is “Technology added another layer of collecting data from consumers, and it gives ability to see the consumers’ inner individual interests”(13). Technology is the tool that helps human population lives easier. Technology is the key to human improvement in all aspects. Thanks to technology, marketers have an ability to collecting data in order to show the relevant ad to the right person in the right time. Also a person can easily find his way through the ad clutter because marketers only shows him ads that he is interested in instead in based on their improved databases.

In the Internet era no one has privacy. By simple search in a Facebook anyone can find pictures that can be consider as the most private things in every person life. How do they appear online? Does the Facebook user did not know about their privacy? As a result, the area of privacy is over. It is may be too late in being concerned about the privacy in the world of universal surveillance. A person has to choose between loneliness, old fashion, hard times, or using technology, has an easier life, and ignores his privacy. Everything has its own advantages and disadvantages modern life is no exception from this law. In the modern era of technology it is hard to not be under surveillance if a person likes to enjoy life with his friends, and family.

Larson’s other concern is “Companies have begun invoking the constitution in defending their rights to probe our private lives. They talk now of the right of corporate free speech.” (98) His idea has a complete contradiction with his other idea that is about short privacy notice. Although constitution and privacy policy are two different topics, Larson tried to show that companies are to show themselves as human entities. Also he tried to say that companies as human entities reserve the right for them to behave however they want with their consumer base on their interests. First of all, companies and corporations are all the results of the human mind. According to Ripken, “No corporations would exist and no corporate actions would occur without the actions and consent of the human beings who make up the corporate entity. Corporations themselves cannot literally ‘act’ or ‘decide’ or ‘intend’ apart from their human members”(100). Second, companies have to have constitution for their legal protection. Third, both consumer and manufactures have some rights based on the law. For instance, consumers can tell the marketing agency how to share his information with others and if they violate it he as a consumer can go after them. Companies also have to define their rules, so whoever trades with knows about their rules in the business. As a result, it is not fair to say companies are ruin consumers life base on their constitution while their business are based on their consumers.

Additionally, America uses free-market system.  According to Zupan, “Free markets have many virtues. Arguably, the most recognized is the expansion of individual choice—and thus freedom—through mutually beneficial exchange”(171). Thanks to free-market no one forces any one to use certain company. A person can easily change his mind and not to use one company at all. If America did not have free-market, every company would have the same product with same quality because everything was under the surveillance of the government. Thus all the companies’ constitution would be the same, and it did not matter where to buy anymore. Also a company has the right to do business whatever it thinks is best for it. Also, keep in mind, many companies are trying to survive, so they try to stand out from other companies in every aspect of business that they can.

Finally the last concern of Larson is about,

One paragraph notation of privacy policy, however, is to underestimate the power of the marketing surveillance to cause a wide range of changes in our daily culture: to annoy us, disrupt our thoughts, break our hearts, erode the bounds of self, even to short circuit the checks and balances of government. (202)

As mentioned above this statement has paradox with his last statement. He did not mention any evidence for his belief. America is based on the work and consumption. If a person does not spend his money, it causes others to do not gain money. If this cycle continues, it basically corrupts the whole system. Most of the companies are trying to write the simplest and also more efficient privacy policy as well. The problem is although people say they are concerned about their privacy they never read such statements. As stated by Goldman,

Consumers may tell survey takers they fear for their privacy, but their behavior belies it. People don’t read privacy policies, for example. In a survey taken last year by the Privacy Leadership Initiative, a group of corporate and trade association executives, only 3% of consumers read privacy policies carefully, and 64% only glanced at–or never read–privacy policies.

Even if companies have a good and well-written privacy policy no one cares about it. In addition, even his book publisher–Penguin Group– has a more than two-pages privacy policy. Thus many credible companies are having a solid and complete privacy policy rules. Finally, according to Said, “Privacy is a constitutional right in all European Union countries, which zealously safeguard personal information about their citizens. Each has its own data protection commissioner, a privacy watchdog roughly equivalent to the chairman of the Federal Trade Commission in the United States.”  Which basically means each company has to protect its customers in a free business environment. Everything has a cost and having free America is to have free business as well.

What is the real solution to the clutter of advertising? How to eliminate privacy concerns about targeted advertising? Everyone is confronted with the numerous ads every day. Most of these ads are not even related to the person, or he has no interest in them. For instance, usually male population does not have interest in cosmetic products, but they see cosmetic product ads everywhere. According to Rotfeld the solution for this mass advertising is, “more creative advertising that breaks out from the advertising clutter. They are partially right, since the problems of clutter are compounded when the exact same dull message is seen multiple times within the same vehicle.” This means marketers need to condense down their amount of ad’s and instead focus on the ads quality. This goal is not possible if marketers want to advertise in an old fashion way. 

According to Kline “consumer online spending up thirty-five percent from 2002 to a record-setting $18.5 billion during the 2003 holiday season”; it is no wonder that online advertising is now considered a “necessary element of any comprehensive integrated marketing”(920). It is obvious that consumer has tendency to shift from old fashion type of shopping to the new era of technology shopping. It is the marketers’ responsibility to first keep up with the consumers, and second offer them more pleasant shopping. The solution for clutter of ads and answer to the consumers shift is to showing relevant ads to the relevant consumers, which is possible only by tracking, every ad and its audience. The easiest way to track ads is to use technology. Technology and especially the Internet make it possible to target consumers and give them the ads in which they are interested.

People around the world use most of the Internet services free of charge. They use search engines, social media sites, or job posting sites usually for free. How does these services can operate? If they offer free service to their visitors, what is their revenue source? The answer to these entire questions is advertising. Every one can use these services for free because manufacturers have already paid for them. As mentioned above, marketer should have ability to track their marketing money, and target their audience. As a result, targeted advertising help consumers use the online services for free while it helps manufacturers to advertise their goods to the right consumers.

Everything has advantages and disadvantages. Targeted advertising is not an exception. The best way to track ads and consumers behavior is through cookies. Unfortunately, some marketing agencies go beyond the line and violate user’s privacy. The solution for this problem is to use the “do not track” buttons. Abusing the cookies leads to do not track proposal. According to donottrack.us:

Do Not Track is a technology and policy proposal that enables users to opt out of tracking by websites they do not visit, including analytics services, advertising networks, and social platforms. At present few of these third parties offer a reliable tracking opt out, and tools for blocking them are neither user-friendly nor comprehensive. Much like the popular Do Not Call registry, Do Not Track provides users with a single, simple, persistent choice to opt out of third-party web tracking.

As of today, many browsers have this option to block tracking users behavior in the sites. By enabling this option browsers allow only the site domain to access to cookies and they do not accept tracking cookies anymore. For example, if a site is partnered with the Google adverting network, each time a visitor visits that site, Google will place a cookie on the visitor’s browser to remember that the user used this site and then show him ads base on that site content. By enabling “Do not track” Google will no longer be able to place a cookie on behalf of other site for its marketing purposes. The marketers realize people concerns, and they also changed their role as well. Browsers realize people concern and they tried to make people aware about these feature. For instance according to Fire-fox official website “Mozilla Firefox offers a Do Not Track feature that lets you express a preference not to be tracked by websites. When the feature is enabled, Firefox will tell advertising networks and other websites and applications that you want to opt-out of tracking for purposes like behavioral advertising.” This means that browsers realize the issue and they feel responsible for it. This option is not on by default. The reason for not being on at the first place is people usually do not change the app’s default setting and by keeping this option on for everyone it simply stops advertising industry to advertise and prevents manufacturers from selling.

Finally, according to Merrill “traditional advertising is radically more expensive than the new ways of targeted advertising.” New start-ups and small businesses usually cannot afford to go for mass media advertising at a first place alone. This will lead them to become unsuccessful or no one will be hear from them. Targeted advertising makes it possible to first lower the cost of advertising and second made small businesses visible to the right consumers in the right places. To clarify the use of the targeted advertising for small business and how it can help both consumer and business, let’s use and example; for instance a new nail treatment shop opens in a city, according to Google “97% of consumers search for local businesses online,” so that shop can easily start targeting within only a twenty miles radius around it’s location. Thus first of all it will decrease its advertising costs. Second it promotes itself to the real potential consumers. Third, it helps consumer population because it avoids adding more to the clutter of adds, and by only targeting the right ones with real interests.

Targeted advertising, is a new technology and it is based on the psychographics. The best answer to the ad clutter today can be shifting from old type of advertising to the targeted marketing. Although this type of advertising raises some concerns about privacy issues, if marketers use this method wisely they can use relevant ads to potential consumers. Also they can help consumers continue using many services for free.

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Hamid T.

Author Hamid T.

He created his first website in 2003. As of today he is a researcher and student at the University of California Irvine. He has more than 15years experience in online marketing and web design.

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