John Anderton! You Could Use a Guinness Right About Now! The Advantages and Pitfalls of Personalized Advertising

In the 2002 movie Minority Report, a thriller that takes place in a dystopian future, people are subjected to constant retinal scans. In one memorable scene, Tom Cruise walks through a subway station with a large crowd, each having their retinas scanned various points. As his character walks past ads for Lexus, Guinness, American Express, and multiple other companies, each scans his retina and calls out his name. American Express changes their ad, so the card in the ad has the character’s name on it. In the clip below, he ends up in a Gap, which scans his retina and can provide personalized shopping information, including past purchase information.

Although we don’t have our retinas scanned for personalized advertising, consumer data is available for companies to use, often without the consumer realizing it (Marshall, 2014). While this personalized advertising is generally only available through online sources, new technology is continuously evolving that may make the Minority Report scene from the Gap a reality (Marshall, 2014).

In 2018, a whistleblower turned in the political consulting firm Cambridge Analytica for using Facebook personal data to micro-target specific populations in elections (The Guardian, 2018). Once consumers learned their data was compromised, it caused outrage and fear. Many consumers to delete their social media accounts to preserve their privacy (The Guardian, 2018). However, if a personalized marketing plan is used, 79% of marketers have found that they will exceed their revenue goals (Manafy, 2018). According to Manafy (2018), more than a third of consumers prefer personalized advertising. How do advertisers overcome this paradox with consumers? On the one hand, they do not want companies to use their data, and on the other, they are expecting well-executed personalized ads (Manafy, 2018).

The key is control. In the Cambridge Analytica example, Facebook users took random surveys which analyzed their personality traits, told them which celebrity they should date, or even told them what kind taco they were. This information was building a profile about them without their knowledge (Harding, 2018). These quizzes form algorithms on each consumer, allowing data-mining companies to create micro-targeting campaigns based on each consumer’s online searches, purchasing behaviors, and yes, online quizzes (Harding, 2018). For a consumer to feel as though they have control over how their data is used, they need assurances of data protection, the ability to opt-out of any company’s advertising and to know what information a company has on them (Manafy, 2018).

The Institute for Advertising Ethics addressed personalized advertising in 2011. In their Principles and Practices for Advertising Ethics, they caution about using personal data without the consumer’s knowledge and encourage a self-regulatory program (Institute for Advertising Ethics, 2011). More recently, Admap published guidelines for data ethics. They suggest that “as technology such as AI and facial recognition become more pervasive marketers must sense check their use of it” (2019). Since the Institute for Advertising Ethics published Principles and Practices, the EU passed its General Data Protection Regulations (GDPR). Enforced in May 2018, the GDPR provides real consequences for a company’s failure to protect consumer data (Admap, 2019).

Personalized advertising is the wave of the future, but there are risks as well as the benefits. Giving the consumer control over how and when their data is used, following regulations and guidelines intended to protect consumer data, and not “stalking” the consumer (or appearing as though you know the consumer more than they know themselves) will help companies make the most of personalized marketing (Manafy, 2018). This creates a mutually beneficial relationship: Consumers will be more satisfied, and companies can reach their revenue goals. 

Sources:

AdMap. (May, 2019). Data Ethics.

Harding, X. (2018, April 2). It’s not just Facebook—Online quizzes also collect data about you. Mic. Retrieved from https://www.mic.com/articles/188678/its-not-just-facebook-online-quizzes-also-collect-data-about-you.

Institute for Advertising Ethics. (2011). Principles and practices for advertising ethics. Retrieved from https://www.aaf.org/_PDF/AAF Website Content/513_Ethics/IAE_Principles_Practices.pdf

Manafy, M. (2018, August 21). Customers want your marketing to be personal. Here are 4 tactics that really work. Inc. Retrieved from https://www.inc.com/michelle-manafy/customers-want-your-marketing-to-be-personal-here-are-4-tactics-that-really-work.html.

Molen, G., Curtis, B., Parkes, W.F. & de Bont, J. (Producers) & Spielberg, S. (Director) (2002). Minority Report [Motion Picture]. United States: 20^th Century Fox.

Marshall, J. (2014, February 7). How has advertising lived up to ‘Minority Report’? Digiday. Retrieved from https://digiday.com/marketing/advertising-really-like-minority-report/.

The Guardian. (2018, May 3). The six weeks that brought Cambridge Analytica down. Retrieved from https://www.theguardian.com/uk-news/2018/may/03/cambridge-analytica-closing-what-happened-trump-brexit.