Why brands should establish ethical principles for data collection

The internet of things is constantly collecting intimate data.

The internet of things is constantly collecting intimate data.

Data collected should provide value to all concerned parties

The Altimeter Group published “The Trust Imperative: A Framework for Ethical Data Use.” The report gathered information from several different sources to provide a well-rounded view of how consumers view data collection and how organizations are starting to rethink data collection practices.

Data collection is becoming more ubiquitous, thanks to the “internet of things” – thermostats, refrigerators, wearables, and of course smart phones, to name a few. Therefore, protecting consumer data, from encryption, to storage, to online marketing, is becoming a brand attribute.

Rethinking the digital cost-benefit analysis

The online marketing axiom, rooted in cost-benefit analysis, is that consumers will trade their personal data for perceived discounts. The internet provides consumers with free services – search engine, photo archive, social media networks, etc. – if the consumer shares personal, friend list or email information.

This appears to be a good deal on the surface. However, upon closer inspection, many organizations use data collection as a profit center, selling data to programmatic media firms, credit reporting operations, database marketing firms, and large retailers. In fact, there is so much consumer data for sale (over 1500 data points for each of the 500 million active internet users, most of them in the United States) that a precise mosaic of the consumer’s lifestyle, actions, interest, food preferences, and ailments can be purchased for marketing purposes.

If this comes as a shock, it shouldn’t be

Most Americans are resigned to the fact that there is nothing they can do to thwart the onslaught of data collection by marketers. This comes from a lack of understanding about digital marketing and a preconceived notion that the Federal Government is looking out for their best interests when it comes to their personal privacy rights.

Why brands should be worried

The internet of things is constantly collecting intimate data. This is changing the nature of data collection from something that requires action to something that just happens. Consequently, consumers are becoming more uncomfortable with how brands will use their data.

As the tension level rises around data collection, trust becomes a serious issue for brands. An Altimeter® survey of over 2000 consumers revealed that over 45% of those surveyed had little or no trust in how organizations use their data.

This lack of trust has a quantifiable effect on business performance. The 2015 Edelman Trust Barometer survey of 33,000 general population respondents found that 63% of people that lack trust in an organization will refuse to buy products and services from it. 58% criticized the organization to friends or colleagues, and 37% shared negative opinions online.

The impact of distrust clearly affects revenue, reputation, and stock price.

How brands can benefit from ethical principles in data collection

Brands should establish principles for ethical data collection, beginning with the expectation that any data collected should deliver value to all concerned parties. This is a litmus test for any “go or no go” marketing initiatives.

A second principle that organizations should consider is data minimization, meaning what is the least amount of data needed to meet the marketing objective? By practicing minimization, brands promote more sustainable and less risky analysis.

To download the report “The Trust Imperative: A Framework for Ethical Data Use” click here.

Additional articles you may find of interest on this topic:

Digital Ad Targeting – What Do Marketers Know About You?

Ad Technology: Programmatic Advertising

The challenges of “Big Data”

Please leave your comments or thoughts below.

Copyright: joebelanger / 123RF Stock Photo

Big brother and marketing ROI

Big brother is watching

Know where the line is between user privacy and data collection.

Digital ushered in the era of data collection.  For aviation marketers, digital offers big data and unlimited possibilities for ways to track advertising and marketing effectiveness. The “C” suite demanded accountability for marketing funds and data houses responded by monitoring and tracking click-throughs, websites visited, time on page, and time of day, basically offering a very specific connect-the-dots profile of our web usage. Cookies were placed on our machines without our permission and we naively accepted that corporations would do the right thing with our personal data. Big data houses claimed that did not track our names but tracked the IP addresses, as if there’s no correlation.

Unfortunately, it did not quite work out like we planned. Now we come to find out that data mining companies have been selling out web browsing habits to advertisers so they may offer up specific banner ads or offers based on our browsing profile, credit score, and brand preferences.

Web privacy groups lobbied for more transparency, and software providers responded with better and easier controls to track cookies that gathered our information. After all, it’s just one little pixel bobbing around in a sea of screens.

But now we’re discovering that the Federal Government also has an interest in our browsing habits, emails, phone calls, and everything else digital, and stores this content for connect-the-dots referencing. Should this surprise us? Of course not!

During all of the news coverage following this revelation the advertising community has been very quiet. In fact, it’s embarrassing that agency  holding companies, trade associations and digital advertising networks, have said almost nothing about data collection.

The advertising community probably has done more to promote behavioral targeting in the name of more effective advertising that any other group on the planet.

Which leads us to a very interesting internet privacy case of Harris vs. comScore’s  class action lawsuit. The suit centers on comScore’s practice of bundling its monitoring software into third party downloads such as free screen savers. The plaintiffs contend that comScore did not provide adequate notice that when the downloaded free third party software was installed, it also monitored the users’ email and browser habits and sent that information to comScore, which in turn sold it to advertisers.

You could look at this two ways; one being a fight for internet privacy, and the second  how comScore tried to monitor users’ internet habits and email without users’ consent.  Why is this a big deal? Because our personal data drives internet advertising. To put in a monetary context, according to the Interactive Advertising Bureau, Internet Advertising revenues total $36.57 billion in 2012, a 15% increase over the previous year.

Now with mobile on the rise, geo-location tracking opens up even more real estate for internet privacy issues. Just think about the amount of information you are providing through apps and social networks every time you pick up your smart phone or tablet.

In conclusion, aviation marketers need to pay special attention to the privacy rights of their customers while balancing the perceived needs for more marketing ROI data.

Additional articles your may find of interest on this topic:

Determining Advertising Return On Investment (AROI) for Aviation Marketing

Why content development will drive the future of aviation marketing

Aviation Marketing: Measuring Digital Display Advertising ROI