BrainTrust Query: Privacy is Dead … and It Could Be Great
Commentary by Doug Stephens, President, Retail Prophet
Through a special
arrangement, presented here for discussion is a summary of a current article
from the Retail Prophet Consulting blog.
Recently Facebook announced its intentions
to develop what it calls the Open Graph, a means of connecting data about an
individual based on their choices, tastes and preferences by profiling their
social networking and web activity. The idea is to link all of this data and
then bring it to a central point; that central point being Facebook, of course.
In doing this, Facebook would be capable of graphing an intricate, accurate
and ever-evolving picture of the individual consumer.
The strategy involves
a few things. First, they are allowing partner sites to interface with Facebook.
When a user comments on an article (on CNN.com for example), it would be shared
with their social circle on Facebook and in the process, the fact that the
user visited CNN.com would be noted and added to their graph. Second, they’re
going to share the "like" button
programming code so that any business can place the button on their site to
create a social-link back to Facebook. In the process, Facebook gathers more
data about that user’s
preferences outside of Facebook itself. Lastly, they’re going to break
from the current protocol of not storing or caching user data for more than 24
hours. They didn’t give any details about how long they intend to store
this information.
The open graph is the holy grail of marketing.
Reaction to this announcement
ranged from enthusiasm to anger. While some viewed it as a positive step toward
a more connected and meaningful internet experience, others saw it as yet another
step in the eradication of privacy as we know it.
In fairness to the naysayers,
anyone who’s been phished on Twitter or
Facebook can attest to the fact that the web can be an ugly place when you
share the right information with the wrong people. What’s particularly
disconcerting is the speed and scale of the damage that can be done when your
information gets compromised.
Having said all that, I believe that the idea
of privacy is completely outdated. We live in a world where your picture can
be taken hundreds of times in the course of a normal day. Our cell phones are
like homing beacons. Our credit card is a trail of digital breadcrumbs. And
it’s now routine to Google someone
before you meet them.
It’s really about trading information for value.
Traditionally, when we
give companies information, we don’t get any real
value in return and, if we do get anything, it’s usually just generic offers,
junk and noise.
However, imagine if we could move to a state where the marketing
messages we receive are almost completely relevant and timely. If virtually
every piece of direct marketing you received made perfect sense with respect
to your tastes and preferences and needs at that moment. If the advertising
you were sent matched your life-stage and interests perfectly. If even new
products that you’d
never heard of made sense with respect to your unique needs and wants as an
individual.
Would you be willing to trade a little privacy to get to this point?
I know I would.
Discussion Questions: How significant will the new Facebook Open Graph
initiative be to marketers? Are consumers ready to exchange more privacy
for a more personalized internet experience, including targeted marketing?
The Facebook Open Graph would be significant for marketers. It would allow targeting like never before. I can understand why many would want use it. That being said, I have to disagree with the author when he says that he would trade “a little privacy to get to this point.” He’s trading a lot of privacy in order to receive relevant ads. Is that worth the trade-off?
There is about to be a big discussion in the US about privacy. I don’t think many consumers realize how little privacy they have on the web. As this discussion heats up and consumers discover how quickly their actions can be traced back to them on an individual basis, without an easy way to opt out, there will be a backlash. This size of the backlash is yet to be seen.
This issue is much bigger than targeted advertising. It will be interesting to watch the debate play out.
The Facebook Open Graph initiative would be equally valuable to both marketers of goods and to marketers of everything else. Me thinks very few marketers in today’s opening-up society have the character and the uncompromising integrity that would give one perfect confidence in their discretion far into infinity. While I would enjoyable personalization, such a trade off would have a rather low appeal to me.
Leaving aside the “Big Brother” question, the value of the Open Graph is undeniable. The most important concept in marketing is relevance, and the most important factor in determining the likely relevance of a marketing message to a particular person is accurate knowledge about that person’s tastes and preferences.
Facebook (and affiliate sites) can provide *some* of the information needed to tailor marketing to a person, but not all. The key thing they will be missing is the person’s actual purchase patterns. Sure, someone may *say* they like Guns N’ Roses on their Facebook profile, but they may buy Broadway show tunes from the privacy of their own iTunes account. Grocery store purchases are another example: the person may post pictures of their bike ride, but they may buy more potato chips than Power Bars.
So, combine Facebook’s Open Graph of people’s *stated* preferences with actual purchase behavior data showing people’s *actual* purchase behavior, and you’ll have a truly powerful tool for targeting marketing. Add in the location and time data that mobile platforms bring, and we truly will have the marketing Holy Grail.
This is a great idea and the shared information can benefit the person who provides it. What’s the downside?
The anger comes from the idea of “trading privacy for value.” First, the idea of a trade involves a conscious decision. Did the Facebook users make a conscious decision to aggregate and share this aggregated data about themselves? Is there a way of opting out? Without a conscious decision the users of Facebook are not doing the trading.
Second, what value are the Facebook users getting in return for sharing aggregated data? The “privilege” of using Facebook? If that is all the value that users are getting, I predict a massive shift away from using Facebook as soon as consumers find another option. The users did not sign up for this choice so this was not the value they assumed with choosing to use Facebook.
The assumption of the owners of Facebook that consumers are all right with this decision to share their information may lose consumers for them. Facebook is easy to use and has built a lot of options making it a preferred choice for many consumers. However, making decisions for using information about consumers without their choice is a violation of consumer trust.
Good for marketers…not necessarily so good for marketing’s image. Yes, it’s the Holy Grail but privacy advocates will see it as the Antichrist. We already see Facebook retrenching on the issue of privacy. Watch for more to come.
As the short-lived “era of personal privacy” comes to a close, it is a worthwhile exercise to consider what the new norm should be when it comes to commercial access to individual information. A few principles to launch the debate:
1. Privacy and personalization are two sides of the marketing coin. Individuals should be empowered to decide how much of either they sacrifice in order to obtain the other.
2. The individual should retain ultimate control over his/her personal behavioral profile. It has monetary value. There is a major business opportunity in providing a secure platform for this transaction.
3. Marketers must be prepared to exchange something of value (experience, money, convenience) for access to individual information.
4. Live your life assuming that no personal behavior is private – and behave accordingly.
I’m not convinced Facebook (or Google for that matter) understands the principles above. Compiling a data resource for marketers is interesting, but providing a platform where shoppers can exchange personal access with motivated marketers is a social and commercial revolution.
Think of this as a segmentation tool. Many people are major social media users and are not concerned about their privacy. If they are an attractive target for a business, efforts in this area make great sense. Some consumers may adjust their profile to attract special offers and discounts that businesses do not intend for them. Still others will opt out (and this group will grow when stories of people being hurt because of their low privacy settings are publicized). These folks may also be an attractive target and need to be reached via conventional communication means.
Shifting one’s core principles and mission is serious when it affects privacy. It may seem innocuous as the program is the social media version of Premium Knowledge Group’s Pri-Stat, Claritas or Acxion, etc. Consumers will enjoy the benefits without knowing why.
However, there will be push-back. It is one thing to tell friends what you’re up to; quite another for marketers to apply algorithms to your daily life and rituals. It will be painted as if someone is listening to your phone conversations.
The open graph is good for marketers. We can agree with that. What I can’t agree with is the access it gives marketers, and other not so wonderful people, to our personal data. I still think it is too high a price to pay. Count me in on the side of limited access to giving my “preferences” to others.
I recently purchased a book on photography from Amazon.com for a friend’s son. I have no personal interest in photography, much less in buying books on the subject. Yet, for the next two weeks that was all I heard from Amazon. In this instance, they were wrong about my “preferences” – but I was the one receiving the unwanted marketing pieces.
One of the top links on the Web these days is how to completely eliminate a Facebook profile. I don’t know a single person who thinks that it’s a great idea to randomly share information about sites we’re visiting. It’s one (creepy) thing to visit Slate and see a scrolling list of Facebook friends…but imagine the fallout when sites like Maxim and WebMD start sharing too. I expect wholesale opt-outs.
There has been a great deal of coverage recently about those Google searches for how to opt out of Facebook and the umpteen different stages you have to go through to maintain some slight degree of privacy. I’ve lost track of the references to the NY Times’ diagram. Bottom line, I think is that lots of people ARE indeed willing to swap privacy and personal information for more targeted marketing BUT I strongly suspect that few are genuinely willing to accept someone else’s decision (e.g. Facebook’s) to use their details without their permission.
“It’s really about trading information for value.”
Come on, who’s kidding who here: it’s about letting every one who has something to sell–and is willing to hand over a few $$$ to FB, of course–flood your inbox with “potentially valuable information” (aka: “at least a one-in-a-million shot you’ll like it and they have little to lose by trying”) I predict the rise of ever more sophisticated spam-blocking software…and we’ll need it.
“Imagine if we could move to a state where the marketing messages we receive are almost completely relevant and timely…”
This will never happen. First, most normal people do not *live* to receive marketing messages. Second, the concept is both arrogant and a pipe dream. The only person capable of deciding the value, relevance and timeliness of marketing messages aimed at me is me. There is already plenty of bad, misdirected, unappreciated search engine-driven marketing without Facebook taking it to another level. Facebook richly deserves the pushback it is getting.
Facebook has a business model that a lot of companies would kill for, largely based on getting 500 million users to provide lots of (personal) data about themselves, including what and who they like, where they are and where they spend their money — or at least where they would like to spend money.
The seemingly utopian state that is referenced above — where marketers are hugely relevant to their prospects and customers at all touch points — isn’t going to happen via Facebook, probably ever, and for at least two good reasons.
First, Facebook is going to charge an awful lot for this, as they should, because most brands aren’t willing to invest in and allocate the right strategic resources to do this themselves.
Second, Facebook has never been and is not likely to be consistent and clear with respect to its collection, use and sale of customer data. Customers don’t have any idea how their data is used and misused, whether through Facebook or third party apps that leverage any number of APIs.
It will take a concerted effort, along with honesty and transparency for Facebook or any other third party data aggregator to reach a utopian state, much less have consumers and the brands that value them along for the ride.
“You have zero privacy anyway. Get over it.” Scott McNealy,chief executive officer of Sun Microsystems told a group of reporters and analysts. [www.wired.com/politics/law/news/1999/01/17538]