How much is too much when it comes to data in marketing? Can we find a mutually agreeable level that’s beneficial to both brand and consumer? Fiona Killackey investigates.
This article originally appeared in The Trust Issue, our June/July 2018 issue of Marketing magazine.
Warren Buffett famously said, “It takes 20 years to build a reputation and five minutes to ruin it.” In the last 12 months, society has witnessed a mammoth rupture of reputations – from the #metoo movement and its perpetrators, through to an ever-increasing army of young workers standing up to global employers in the wake of wage rorts.
In the world of marketing, the breakdown of brand reputation has resulted from massive data breaches that appear to happen when companies put profits ahead of ethics. But is it really a case of good versus evil when it comes to data mining for marketing, or is it simply that we have not yet mastered how to make sense of – and use transparently – the insights technology enables?
Before diving into the answer, first we need to understand the matchstick responsible for reigniting the 2018 debate on data
On 2 April 2018 Mark Zuckerberg, CEO of Facebook, apologised in court for his company’s role in the Facebook-Cambridge Analytica data scandal that included the collection of the personally identifiable information of up to 87 million Facebook users.
“It’s clear now that we didn’t do enough to prevent these [Facebook] tools from being used for harm… That goes for fake news, foreign interference in elections and hate speech, as well as developers and data privacy. We didn’t take a broad enough view of our responsibility, and that was a big mistake. It was my mistake, and I’m sorry. I started Facebook, I run it and I’m responsible for what happens here.”
Since the scandal broke a month earlier (after hints at it in The Guardian in December 2015), critics took to social media and marketing forums, pronouncing the ‘end is near’ for Facebook and its associated entities. The hashtag #deletefacebook took off, reaching more than 400,000 tweets in the month of March 2018 (Inc.com).
Yet, the apparent backlash appears to have had little impact on the business itself. On 26 April 2018, Facebook posted its quarterly earnings to 31 March 2018, showing an advertising revenue of US$11.79 (AU$15.91) billion (up 50% from the same quarter in 2017).
It also revealed user behaviour of its platform, with the social network boasting 1.45 billion daily active users and 2.2 billion monthly active users for March 2018 (both up 13% year-on-year). It would appear – from the figures at least – that the backlash was more hype than fact. While Facebook may have tweaked its back-end to seemingly safeguard users’ information, its billion-strong audience hasn’t made that many adjustments to their own behaviour. Upon the release of its Q1 figures, Zuckerberg stated, “Despite facing important challenges, our community and business are off to a strong start in 2018. We are taking a broader view of our responsibility and investing to make sure our services are used for good. But we also need to keep building new tools to help people connect, strengthen our communities and bring the world closer together.”
The need to trust
Zuckerberg’s words balance on the idea of trust between the social media giant and its billions of consumers. It’s this trust that Dr Linda McIver, executive director at Australian Data Science Education Institute, says is waning as consumers aren’t absolutely sure on how or where their personal data is being used.
“Like any technology, data science can be used well or used really badly. Ideal applications of data science enhance the story and make it much more personal. For example, personalised medicine can tell me a much more detailed story of how patients just like me respond to particular drugs, rather than giving me averages and probabilities spread over the entire population. And marketers have a better chance of connecting with their audience if they already know a lot about what we like and dislike.” It’s this latter aspect though that “worries” McIver. “The more companies know about what makes me buy something, or just click on a link, the better they can manipulate me. I’m really uncomfortable with the implications of that,” she says.
Patrycja Slawuta, founder and CEO of SelfHackathon – a boutique behavioural consultancy that merges science and humanity to create campaigns that benefit brand and consumer – agrees that when it comes to a way forward, the first step is figuring out how to build trust. “Trust is a two-way street. Do the brands and companies trust the consumer enough to let them know they are gathering their data, tracking their movements and behaviours so that they can sell better?” Slawuta believes that we are entering an age of “moral outrage, one where global levels of trust are the lowest in the last 40 years, when fake news travels faster (and deeper) than real news… Given that this behaviour on the part of companies seems so pervasive, perhaps the next evolution of marketing will be a versioning of ‘permission marketing’ that is truly a two-way bilateral trust dynamic between the consumer and the marketer to use data in a conscientious and intentional way to deliver the product and services that are just right for the end consumer.”
Hype or happening?
While there may be a collective moral outcry against the use of data, the question posed by many in the industry is: ‘are we actually using that much data for marketing purposes?’ While brands like Amazon, Google and Facebook employ thousands of data experts, for many companies their marketing team may only house one or two data scientists.
According to Adam Ferrier, founder of Thinkerbell – an agency of ‘thinkers and tinkers’ that have extensive experience in the worlds of research, strategy and creative execution – “Most consumers think marketing is much more scientific and precise than it really is. Unfortunately, or fortunately depending on how you look at it, marketing is still a relatively blunt instrument. Matching context, consumer needs, messaging and product rarely happens with surgical precision. In fact, I think most consumers would be somewhat relieved to understand how ‘intuitive’ the process still is. The days of Minority Report, where people walk past ads in shopping malls that call out to them by name, are still a long way off.”
Ferrier also suggests that the data solution platforms, apps and companies popping up at an ever-increasing rate, aren’t necessarily what people – consumers or marketers – want. “There is also an assumption by those peddling data solutions that personalised advertising is desired by the consumer and will sell more stuff. Both of these are just that: as-yet-unproven assumptions.”
It seems statistics would back up Ferrier’s point. According to the 2017 CMO Survey, while spending on marketing analytics is set to increase (from 4.6% to 22% of total marketing budget), the majority of marketing decisions are not made by reviewing or utilising data. In fact, the survey found only 31.6% of decisions are made following data analysis, the rest are made with little or not data involved.
According to McIver, while every marketer may not be fully exploiting data available, the fact that it is so easily accessible warrants a review of how we use it, today and well into the future.
“We’d be hopelessly naive to believe that companies will self-regulate their transparency and ethical behaviour when it comes to data. They will always tend to act in favour of profit, rather than in favour of public good. As consumers, it’s essential that we become data-literate, so that we can have intelligent debate about what is and is not OK, and enact legislation to hold companies to account. Marketers can help this process by being completely open about what they do and why. [The TV show] Gruen does this brilliantly, explaining the reasoning and techniques behind particular marketing campaigns, but that tends to be focused on mainstream media advertising. We are way behind the eight ball when it comes to data collection, digital media and their impact on this industry.”
Self-management and education
Dr Damian Cotchett, a consumer and organisational psychologist at Changing Behaviours, believes that changes to policies, along with one’s ability to self-manage, will be crucial for individuals to thrive in a data-led society. “As the concept of online marketing becomes considerably more impactful, the perceived responsibility of those driving and influencing the new direction will have standards applied to them. Currently, this is limited in terms of rules except for things like ‘do not contact me’ rules and the ability to unsubscribe. The social media area will establish ‘fit for purpose’ rules that will demonstrate a higher level of transparency, but this is primarily as a result of pressure applied by consumer action groups. As with most areas of marketing for adults, the principle of self-management underpins consumers’ decision-making and transparency of actions… The best way to ensure a mentally healthy society is to encourage people to be self-managing.”
McIver agrees, “We like to think we are rational creatures, but countless studies have shown that we are really easily manipulated, even by things we’re not paying conscious attention to. The more skilled companies become at using that, the less our behaviour is actually under our conscious control, and the more we are prey to being controlled by others… Data has so much potential to change our lives for the better… But it can also be used against us. And, because that’s so profitable, it seems like that’s the aspect of data science that’s currently winning. We can change that, but we have to work together and prioritise data literacy and critical thinking skills.”
US author and businessman, Stephen R Covey once suggested that, “Trust is the glue of life… It’s the foundational principle that holds all relationships.” For many, the Facebook-Cambridge Analytica data scandal has brought to the surface just how important trust is for business today. While it may have shocked many consumers, it has also opened up the conversation on how and why we use data and how we can begin to build more trust between marketers and their audiences. “It’s important for agencies and marketers to get involved in discussions such as this,” says Ferrier, “as ignoring the issues surrounding data and consumer rights is inauthentic, and potentially destructive. As an industry it’s great to see so many organisations working through these types of questions – not pushing them aside.”
For Slawuta, the conversation we’re having on data may well result in a positive shift for society. “If we want to sell more products, data definitely helps. If we want to create a better world – we need to be better storytellers. Data looks at what is, stories create what will be. I think the world today is starving for narratives of hope. Technology is multiplier of human psychology. The ever-increasing computational power of machines is just that – raw computational power. What makes it potentially powerful is the underlying human psychology – and, as such, technology will neither save nor doom humanity. It will multiply what is – our fears, frustrations and anxieties or our dreams, hopes and aspirations. The old Greek maxim ‘know thyself’ has never been more appropriate. The social fabric of societies based on trust and fairness is arguably being torn by fake news, populism and masterful fear-management. Awareness of how we are being hacked will make a difference whether we collectively upgrade or downgrade as humanity.”
This article first appeared in www.marketingmag.com.au
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