How do we apply professional marketing standards to the use of Big Data?
Big Data – Buyer Beware
Controversy broke out in the USA in 2012 when it became public knowledge of Target’s advanced analysis of their customers buying habits. They analysed Big Data among shoppers to help the company figure out how to exploit them (Duhigg, 2012). Target’s analysis of its customers’ buying habit revealed habits such as:
- When someone marries, he or she is more likely to start buying a new type of coffee
- When a couple move house, they’re inclined to purchase a different kind of cereal.
- When they divorce, increased chances are they’ll start buying different brands of beer.
What one person may call “Cool” another would call “Creepy”. It gets stranger – Target moved on to build a “pregnancy-prediction model”. Imagine the reaction when a Minneapolis father discovered that his teenage daughter was pregnant after he found out she had received coupons for baby clothes and cots from Target.
Big Data is a new weapon for marketers. While the good old days of data analysis examined past performance to understand sales, marketing, operations and finance, it has limited predictive abilities in terms of forecasting what customers will do next. On the other hand, Big Data can be used to predict not only what the customer will do next but why (Oracle, 2012). This is a game changer for marketers. Big Data draws on ‘live’ data sets from social network sites, software logs, cameras and other mobile devices. Data is collected and analysed computationally to reveal patterns, trends and associations relating to society and human behaviour. Big Data’s potential is huge, but marketers need to start questioning assumptions, values and biases of this new wave of information.
The major ethical dilemma for the modern marketer is how do we apply professional standards to the use of Big Data when consumers are unaware their information is being used for multiple uses, profits and other gains?
In 2006, a Harvard based project gathered information on student users of Facebook that was released into the public domain, and the privacy of the individuals was consequently compromised (Boyd & Crawford, 2011).
Facebook and other social networking sites are the test case for the ethical use and storage of Big Data. And users should be asking:
- Is the information I post actually publicly available?
- Do you need my consent to use my information?
- What are my rights to privacy and protection?
- How are users of Big Data (sociologists, political scientists, economists, mathematicians etc.) held accountable for their use of Big Data?
While Facebook and Target have arguably compromised the privacy of their customers for their drive for profit, modern marketers need to look beyond the dollars and consider the ethical responsibility that comes with the collection and use of Big Data. While the governance of Big Data lags behind its collection and application, marketers need guidelines to inform practice now. When looking to develop data strategies, marketers need answer some simple questions (Shandrow, 2014):
- If I don’t have time to get anything from my customers but their money, do I really need to collect data from them, too?
- What types of personal data should I collect and why?
- What types of transactional data should I collect and why?
- What are the best ways to collect customer data?
- How should I organize and store it?
- How can I best protect my customers’ personal and financial data?
- How can I be sure what I’m doing is legal?
- Should I sell my customer’s information to third-party marketers?
- What’s the best way to benefit from the customer data I collect?
- What are some common mistakes to avoid?
Legislation always lags behind technological change. The way in which organisations, and marketers, balance innovation and Big Data will be challenging. Rather than relying on personal value systems, conversations, even if they are uncomfortable, need to be held on policies on data privacy, customer identification and data ownership.
At the end of the day, there is a huge opportunity to develop brand loyalty around honesty and transparency in the use of Big Data.
Marketing Management Blog T1 2015 
Thanks for your blog. I agree, it’s very Big Brother the way companies use Big Data to predict the buying patterns of consumers. I’ve noticed more recently that Woolworths have started emailing me about products that they think I like and telling me which ones are on special, and also what products people who like what I buy are also purchasing. Unfortunately for Woolworths, I just delete these emails but I can see how that type of marketing strategy could encourage people to buy things they wouldn’t have previously purchased.
I didn’t realise that Target were so ‘cagey’ in the way that they use Big Data. I personally do find that a bit creepy and invasive!! You’d think a company like Target, which has such a wide and committed consumer base, wouldn’t need to do something like that, but maybe it’s the new way of ‘doing things’. It will be interesting to see how marketers use Big Data in 10 or 15 years if we’ve come so far in the past 10 years from the simple catalogue, and newspaper and TV advertising, to now predicting consumer buying patterns based on other demographic data.
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I also found your blog really interesting, thank you. I don’t have a problem with companies using my buying habits to predict what I might like. In the case of Woolworths, I am a willing participant in their big data since I signed off up for their everyday rewards loyalty programs. I did this because I wanted to save on fuel, in the knowledge that my purchasing habits would be used against me. If I was strongly opposed to receiving their emails that market products to me then I have a choice to give up the discounted fuel and simply not scan my everyday rewards card when I purchase from Woolworths. I understand that people find it creepy, however people are willing participants in the process and can choose not to participate.
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These are fascinating issues. I am not sure if it is creepy or just overly pushy either way it puts me off. That said there may be many who are not bothered and actually find the direct marketing useful and helpful. It will be interesting overtime if researchers study the efficacy of these uses of big data. As the users of social media become more sophisticated in its use the may emerge a cohort of people (like me) who do not response to these type of marketing necessitating a different approach or the ongoing use of more traditional techniques.
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There is a very fine line that companies need to tread in their use of ‘Big Data’. From a personal perspective, I can see benefits in companies using their knowledge of my personality, interests and buying behaviour to better target their marketing messages. It means that I am more likely to be informed of promotions and new products that will appeal, rather than more advertising ‘noise’ that just drives me to distraction.
As danmclair identified, in most cases we choose to have this data collected via loyalty reward programs, subscriptions and the like, and so long as people remain informed and complicit to the collection and use of data, I think it is fair, reasonable and ethical.
The sale and consolidation of data is a more worrying phenomenon, particularly when consumers do not have a say in who is provided with their data and how it is used. It will be interesting to see how consumer groups, government and society in general balance the potential benefits and risks of personal data collection from a marketing, security and privacy point of view.
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Thanks for your comment. I agree the issue of big data and privacy is a big concern. Check out this interesting TED talk by Alesandro Acquisti: Why Privacy Matters that covers this topic.
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There are serious concerns for privacy in the use of personal data and legislation always lags behind technological change, may be the companies are using data for their marketing purposes and that may infact be good for the consumer but what if there is a data theft then in the virtual world of internet this personal information will be available to almost everyone and everywhere in global context. Take an example of facebook people copy personal information and create a fake profile for illegal purposes, in that case personal information is vulnerable and in virtual world it is very difficult to pull back or rescind information once it unleashes on internet.
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Thanks for your comment. I agree the issue of big data and privacy is a big concern. Check out this interesting TED talk by Alesandro Acquisti: Why Privacy Matters that covers this topic.
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This is a very good point. I never thought of being watched before.it is absolutely considered to be sort of invasion of privacy.Although customer’s data is used for marketing purpose, it is likely to be exposed in public and could possibly harm them.The consequences of this negative actions would affect the company to be untruthful.This needs to be taken into consideration.
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I noted several people have highlighted email offers being targeted to consumers by Woolworth’s based on their card tracking systems. In addition to this, Woolworths also sell this valuable data to major suppliers within the supermarket categories. As well as this being a great revenue stream for Woolworth’s, this data also provides valuable insights for suppliers relating to consumer switching (brands consumers switch into and out of within categories), price versus off take correlations, interactions between brands and product pack sizes. This information can assist with developing promotional strategies and in some cases has supported the case for new brand launches based on real time consumer purchasing data and behaviour rather than panel style research.
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