Thursday, March 6

Dangling Cookies: Alaska Airlines & Everybody


According to The New York Times, Alaska Airlines is introducing a system on the Internet to create unique advertisements for people as they surf the Web. Called retargeting by the industry, the ads will consider combined data (demographics and psychographics) from several sources to adjust the ads and ticket offers. The trade off, as always, is online privacy.

“I come from the direct marketing world,” Judy Gern, the chief executive of DesignBlox told the New York Times, referring to ads that are mailed to consumers’ homes. “And consumers should really worry about what direct marketers know, not what online marketers know.”

What Direct Mail Has Always Known.

Gern has a point. When as much as half of my time was dedicated to writing direct mail years ago, some companies would provide pretty pointed data about the people we were writing to — from the cars they drove to the magazines they read to where they preferred to take their summer vacations. With direct mail, it was not all that uncommon to present a second and third offer, increasing the opportunities for those who did not respond to the first, much like retargeting ads hope to do.

Generally, all the information was complied by magazine publishers, past direct marketing campaigns, and other survey mechanisms, with participants agreeing to answer questions upon request or for an incentive. What tends to spook people about Internet data collection is that it is comprehensive, constant, and not always clear who sees the information (or what threat that information might pose).

Privacy For Perks Is Today’s Bargaining Chip.

But marketers and network developers have noticed something else. As Marston Gould, director of customer relationship management and online marketing for Alaska Airlines, alluded to in the article: When people know that they might see an advertisement promising a $200 ticket to Hawaii, the priority for privacy quickly drops. And it takes much less than an offer that good.

In fact, for every story about consumer groups considering online privacy, there are an equal number of stories about consumers who are ready to make the trade.

What seems to be is that as long as a marketer provides a clearly defined opt-in and opt-out feature (which is where Facebook faltered on the front end), people are ready to share anything and everything about themselves. Many of them already do. The basic concept behind many personal blogs, vlogs, and even network programming like Big Brother is sharing everything with everybody.

In fact, tomorrow's consumers who are teens today, do not hesitate to share information about themselves. According to PEW/Internet study last year, they are surprisingly open.

• 82 percent of teens already use their real first names online
• 79 percent include a real photo of themselves online
• 55 percent of teens already have profiles online
• 66 percent of these profiles are limited to “online” friends
• 49 percent of them use online networks to make new friends
• 46 percent say some of their profile information is false

Teens are not alone. Their parents are happy to share information too. Most need a tiny incentive. I learned this last year after questioning tying GPS tracking to advertisements. Several people said GPS advertising went to far, until they learned it could help them find a little black dress, on sale, in their size.

Data Accuracy Remains A Question Mark.

While sometimes I consider some of the advances in consumer profiling a bit spooky, it does seem to me we are trending toward total transparency, with relatively few question marks as a marketer ...

• The randomness of “discovery” Web surfing, popularized by networks like StumbleUpon and Digg.
• The potential for savvy Web techs to game any retargeting ad structure, driving offers down so they might land the $200 Hawaii price.
• The fact that people sometimes lie on surveys and contest entry forms.

”I usually check the first box on every question because it saves me time,” one contest entrant told me. “Otherwise, entering them would take forever.”

In fact, even when consumers tell the truth, it doesn’t always mean much. One visit to a “recommended for you” list on Amazon or iTunes might demonstrate how close or, er, far away online profiling really is. And, since that is the case, one might wonder the trading privacy for perks is really as effective as we pretend it might be.

Digg!

3 comments:

Staff on 3/10/08, 10:31 AM said...

UPDATE:

The New York Times reveals how invasive Internet tracking is by marketers because they track "preferences, hopes, worries and fears."

Anonymous said...

Actually - there is a big misconception in how these type of systems work. There is an assumption that because an individual's behavior is being tracked, their privacy is in some way being traded away.

For years, brick an mortar retailers have tracked people's behavior through many mechanisms - from loyalty cards to the use of in store cameras (they're not just tracking shop lifters).

Website owners also have invested a great deal of time and effort into their online properties. When someone enters that store, they have every right to look into how users are interacting with the site - and to use that data to determine how they can best create utility for a customer. Remember, no one is holding a gun to the consumer's head. They can just as easily pull the plug. No one is forcing them to enter their credit card number.

As far as offsite behavior is concerned- this is generally done in a manner that only non personally identifable data is used to alter the algorithms of what is shown to a user - be it the experience in the store, a price, or with an online with an advertisement. It all comes down to utility.
Has a marketer created an experience / product at a price that a customer is willing to pay. It is completely within the purvue of a company to charge the same fee to everyone or to gamble using yield management systems to find the right balance between price and sales at the individual level. Both approaches have pros and cons.

Rich on 12/2/08, 10:23 AM said...

Anon,

You present some valid points in that is exactly what the discussion is about. However, one always needs to consider that some online tracking mechanisms were going beyond what you outlined, without the benefit of the consumer knowing what was being tracked or how far offsite they were being tracked or ever being provided the most basic opt out feature (something that Beacon, for example, installed later).

In addition, if you think all tracking is delivered via anonymous compilations, then perhaps you just haven't see what I've seen in terms of available technology. However, more importantly, if you reread the post, you'll also see that the case is presented objectively with the question being not how I feel about it, but how consumers feel about it.

And regardless of how a marketers might feel about it, marketers always need to be sensitive to how consumers feel about online tracking because the moment they feel intruded upon is the same moment government begins to develop regulations. At the moment however, there is no such concern from the majority of the population.

Best,
Rich

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