Consumer data has become a cornerstone for every successful business in the modern age. The power of turning gargantuan sets of complex data into useful information has revolutionized commerce by allowing companies to better evaluate successes, learn from failures, and more effectively plan and strategize for the future. Companies have long understood the importance of using customer data to more effectively target consumers, but the evolution of powerful digital and online technologies which passively and actively extract this data have led many firms to reconcile their insights strategy. Cookies, which emerged in the late 1990’s, were used as a means for companies to keep track of a customer’s interaction on its website by notifying the website of the user’s previous behavior. Eventually this harmless technology was transformed into “tracking cookies”, which compile long-term records of individuals’ browsing histories across multiple website and give advertisers a more complete idea of how to target an individual consumers. In the article, “They Know What You’re Shopping For” by Jennifer Valentino-Devries, this process is highlighted when analysis of the auto websites a consumer named Mr. Morar had anonymously visited were paired with his real name and studied by his local car dealer. The use of tracking cookies have become a core part of online marketing strategies for many firms over the past half-decade, but new technologies which blend the physical and digital insights process like Bionic Mannequins represent the newest wave of insights technologies. In Andrew Robert’s “Bionic Mannequins Spy on Shoppers to Boost Luxury Sales”, he details a new retail technology that features a camera embedded in the eye of a mannequin which feeds data into facial-recognition software to record age, gender, and race of consumers. Revolutionary technologies like this prompt the question: At what point does extracting consumers information became unethical?
The argument for insights technologies and why our society is better with them rather than without is three-fold. First, these technologies allow advertisers to become more effective at providing relevant information to consumers. Decades ago companies had very few choices but to mass-blast consumers with advertisements over mediums such as the television and radio. This practice often led to many consumers facing commoditized and often irrelevant advertisements on a daily basis. The information provided by these insights technologies have enabled advertisers to significantly reduce the noise associated with mass-blast advertisements and show consumers only products and services that are relevant to them-- products and services that can actually help them. Second, these technologies allow many amazing and useful internet services to be provided free-of-cost to consumers. Companies like Google, Facebook, and Twitter, which provide free services to hundreds of millions of people every day for free, can operate because of the money they make off of advertisements. In 2013, close to 97% of Google’s Revenues were associated with online advertisements. Without technologies that effectively leverage information from consumers, these companies would arguably have to charge their consumers for their offerings, or worst, shut down completely. Aside from the aforementioned large internet firms, many small local businesses are able to succeed because of the success their limited online advertisement presence has from targeted ad technologies. Finally, many firms argue that these tracking technologies gleam only basic information from consumers and always keep their identity protected. Valentino-Devries notes that although the definition of “anonymous” has shifted over time, advertisers still practice a high level of anonymity by removing, protecting, or separating personal identity information from browsing histories.
Although there are many benefits of advertisers’ ability to track insights, there are also serious downfalls and ethical questions. First, although every company says it does its best to protect consumers’ personal identity information, hard facts show otherwise. In Valentino-Devries article, she states, “A Wall Street Journal survey of 50 popular websites, plus the Journal's own site, found that 12 sent potentially identifying information such as email addresses or full real names to third parties.” This information leakage causes a multitude of different problems ranging from unwanted and unprecedented advertisements to criminal purposes such as fraud. Gathering data on consumers is a practice many consumers and firms have come to accept, but the risk of private information leaking has caused many consumers demand that firms be more transparent with their data policies. Next, many people question how relevant this information is to advertisers and if its worth the massive efforts taken to extract it. The internet allows consumers the luxury to “window-shop” on a scale unlike any before. Many consumers spend hours browsing for products and services that they can’t afford merely because they are interested. In turn, the insights gleaned from these habits often portray a consumer that is very aspirational and not a very accurate representation of who he or she really is and what he or she might be interested in. Finally, advertisements that are fueled by these insights have created a lot more noise than there once was. Sure these advertisements are more relevant and effective, but because my information can be accessed through my phone and computer, I am no longer safe (from advertisements) in my own home. Consumers have already become remarkably skilled at tuning-out advertisements, highlighting their aversion to advertisements.
Online advertising and collecting user data has become so crucial to the success of the internet that it is pointless to sit here and say these practices shouldn’t exist. Firms and politicians must now work together to ensure that this information can be used safely. The important practice to emphasize moving forward is accurately separating personal identity information from everything else. Politicians need to crack down on the expectations set forth for firms gathering personal information and tune out the commercial lobbyists who keep these standards lax. Not only should standards for tracking insights be more highly regulated, firms should also explore the opportunity to reward consumers for agreeing to share personal information. SafeWay, CVS, and many other traditional retail stores have used loyalty cards to gather information on customers for the past decade. Consumers rewards? Discounts. This practice can undoubtedly be utilized better in the digital environment. Online business could offer consumers premium benefits or discounts in return for personal information, perhaps even richer than the information already gleaned from tracking cookies and other tools, that could help them better plan for and target their consumer. By increasing transparency and actually negotiating directly with the consumer, firms can gather more relevant information to their advertising needs and do it in an honest manner.
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