More than a year ago, Johanna Blakley explained in a TED speech (watch it here) that the knowledge marketers and advertisers could gain from online networks would render traditional demographic data not only useless but offensive—glorified stereotyping. Demographics, she argues, perpetuate divisions between what we assume men and women might want to buy, or how we gage the value of young verses old consumer populations. We market to certain groups, assuming they have homogenous wants and desires. With data generated from online behavior, however, Blakley suggests marketers may finally see us for the unique, individual consumers we are. And unlike those old stereotype strategies, raw behavioral data is always egalitarian … right?
Wrong. A new ethical dilemma presents itself to marketers and advertisers as they use online information to provide ever more direct advertising and services to their customers. No, I’m not actually talking about privacy concerns (take a look at this – link). I’m talking about the inadvertent effect of consumer-behavior influenced offers and advertisements for services. Individual consumer knowledge of both products and deals is becoming unequal based on algorithms that determine who might be interested in what. There is no reason to think that in every case personalization is egalitarian or empowering for consumers.
Recently (08/09/12), Stephanie Clifford of the New York Times reported on Safeway’s trial with a new system that records its shoppers behavior and then sends discount offers to consumers based on their buying history and preferred products. Over time, Clifford suggests, price tags may disappear and pricing will be dependent on past consumer behavior—on proven loyalty to certain products and marketers offering rewards to their preferred customers.
It is worth thinking about the ramifications of this kind of program even if it is intended to benefit both consumer and seller. Under this system consumers are not only picking preferred products; the brands are picking their preferred consumers. Suddenly shopping for groceries becomes more like shopping for health insurance or a bank lone. Do I need a good record with purchasing Pepsi Co food and beverage to get the best deal?
Increasingly, this doesn’t sound like a program that simply lets me buy my favorite things for less. This is a program that also allows brands to further curtail my power of choice or even my knowledge of the possibility of other options. ‘They’ will know when I cheat on them. Consumer data gathered with more sophisticated technology that tracks consumer behavior might mean that advertisements and offers gain the power of personalization, which is sometimes a good thing for everyone. But we should be cautious as consumers, communicators and regulators, about the trajectory of uses of data that restrict the consumer’s ability to choose between numerous possible products.