They say that knowledge is power.
Well, in the world of advertising and marketing thorough knowledge definitely equates to absolute power. The drive for profit, fuelled by the emergence of big data analytics, has transformed the world of marketing to such an extent that consumers are now beginning to feel that companies know more about them than they know about themselves. If you’re looking for definitive proof of that, then look no further than U.S. advertising giants, Target. Their ‘targeted’ marketing became so sophisticated that they were able to spot a pregnant teenager and send her baby tokens before even her father became aware of her condition. But is that such a bad thing? Are the companies who use the copious amount of raw and generally freely-available data not simply giving us what we want? Or have they now stepped over the line and invaded our personal space?
When Andrew Pole took over statistical analysis at Target in 2002, revenue just topped $44 billion.
8 years later revenues had grown to $67 billion. The reason for that is self-evident; it was largely down to Pole’s data-mining of tracking, profiling and data-purchase information. This knowledge meant that Target was in the perfect position to spot trends based on historical buying data and target its offers accordingly. If customers wondered why they were getting offers on cotton wool balls, calcium supplements and baby buggies, then it was simply down to the fact that Target’s market research suggested there was a likelihood that they either were or were likely to get pregnant.
All remained well and good until customers started to get spooked by the nature of the offers they were starting to receive; like the incredulous father of the pregnant teenager. The targeted marketing raised suspicions that companies were actually spying on customers, and understandably that began to freak people out. After the backlash began, Target had a change of heart. Did they stop data-profiling their customers? Why, of course not. Target simply refined its advertising strategy to target the same market but in more subtle and sophisticated ways.
Rather than send specific tokens for baby products, Target issued books of coupons to the same people with the high-rating pregnancy scores, but varied the content of the coupons to include other offers. Customers then received baby product vouchers alongside money off coupons for products like lawn mowers, so it looked to all intents and purposes that they’d received the baby vouchers purely by chance. In that way their sensibilities were assuaged and they no longer felt like they were being spied upon.
The net effect was that Target’s market share held firm in spite of the privacy concerns.
The question is was that just a one-off case, or are others employing the same sort of tactics? You probably already know the answer to that. If the information is available, any company in their right mind will use that information to improve its position and crank up market share. There’s nothing illegal in what they are doing either, even if it does offend your sensibilities. If there’s a moral to this it’s simply this, next time you’re out shopping on the High Street or surfing online, remember that the information you carelessly give out may come back to haunt you at some stage. Why else is Facebook able to send targeted adverts direct to your timeline? It has nothing to do with chance and spooky co-incidences, and everything to do with tracking and profiling. Maybe it’s time to start thinking about paying in cash.