Category Archives: ethics

Why marketers know if you’ve been naughty or nice

santa watching

There is a story about a jolly old elf who tracks your behavioral data carefully, spies on you even when you’re sleeping, and runs algorithms to assess whether your actions are more positive or negative than social norms. Based on his calculation, the elf will reward you with financial gain in the form of material goods or will deduct from your status by tricking you with what looks like material goods but in reality turns out to be lumps of coal. The system is extensive, including a database of every youth in the world, and is updated annually. If you don’t like this surveillance, good luck: The elf’s privacy policy is unpublished, the observational data cannot be accessed by individuals, and your only recourse to correct misinformation is to send handwritten postal mail to the elf’s address at the North Pole.

Perhaps these childhood stories are why people often freak out about data. The legends of people recording others’ actions, especially those of children, as a form of behavioral modification have been with us for millennium. In Bavaria, the Santa myth is actually split into two figures, a Saint Nicholas who rewards good children with gifts and a devilish, horned Krampus who punishes bad children. Japan has a similar tradition, with an Namahage figure played by men wearing huge, ugly masks, who knock on doors and warn children not to misbehave. Religion is filled with data tracking, starting with God watching Adam and Eve’s naughty apple-biting in Eden, moving on to the widespread but vague idea that somehow all of your actions in your lifetime are being observed for a final post-death judgment. In our deepest beliefs, we perceive there is a connection between what we do, how others record it, and how we will be rewarded.

Which brings us to marketing surveillance 

If you collect enough data to form a baseline for comparing people, you end up with a “database” — and this idea has been around for at least 400 years.  In America in the 1600s, clergy tracked births, marriages and deaths; officials called “tythingmen” would also enter homes to inspect families for observed moral behavior. The first consumer database in the United States was set up in Massachusetts in 1629 to track property ownership. As data expanded, intrusions did too. In the early 1700s, U.S. postal mail was opened regularly to spy on message content.

And then marketers figured out they could make money from all of this information. Database marketing started in the 1940s, first driven by direct-mail marketers (who needed target lists of consumers to mail things to and then calculations to see what worked), later by credit-card companies and banks (who rapidly learned that not all consumers have the same credit risk), and then in the 1990s by Internet marketers who realized they could measure a treasure trove of consumers’ online behavior. While the basic approaches are the same — identify potential customers, differentiate by their value to you and what they need from you, continue to gather more information through interactions, and then customize your response — the cycle time of data marketing increased. Direct mail list updates used to take months; if you purchased a pair of boots at a store in December, it might be March before another company’s boot catalog showed up in your mail. But the Internet enabled a cycle time of identification, differentiation, interaction and customization within days, hours, and now even seconds. Visit zappos.com, look at shoes, don’t buy them, and you’ll see ads for similar shoes on other web sites within seconds. The prevalence of such digital “retargeting” has gotten so rapid that many consumers are beginning to freak out.

The systems are growing ever-more sophisticated. Digital media vendor Rocket Fuel has begun testing device fingerprinting to track consumers by their individual mobile phones; in a recent campaign for Brooks running shoes, it identified the mobile devices of everyone standing along the running route of the New York City marathon, and then later served ads to those devices for running equipment long after the crowds had dispersed to Baltimore, California or even foreign nations. Digital marketers can pick up the IP address of a home’s Wi-Fi connection, and then retarget multiple devices — based on a trigger of one person’s behavior — across the many iPhones, tablets and computers residing in a household. Creative-based retargeting is another digital approach in which banner ads or online videos can be retargeted based on a single ad appearing on any web page, whether or not a consumer clicks on it; for marketers, this provides the advantage of being able to “lift” a publisher’s audience, such as a reader of WSJ.com, and chase that individual around the web later with a pretty good idea of their demographic profile based on the original reading material.

Consumers are rebelling, so what is the balance?

Not everyone is happy about this. Early in 2014, a survey by Truste, a global data management company, found that 74% of Internet users had increasing worries about the use of online data. While only 38% expressed worry about government surveillance, 58% said they had concerns about business use of their personal information. Beyond simple consumer annoyance, the growing use of online data may actually be harming marketing results. 83% of survey respondents said they were less likely to click on an online ad due to privacy concerns. In a deeply ironic circle, the data collection sophistication used to make online marketing work better may actually be depressing response rates.

Smart marketers are recognizing this and beginning to tone down the creep-factor of retargeting, using tactics such as impression caps, dayparting, ad creative versioning, and opt-out options to allow Internet users more breathing room before they are inundated with braying offers.

Data tracking will not ago away, because it is how all of us assess the outside world to calibrate our actions. Marketing in particular is all about treating different customers differently, as the great Don Peppers once wrote — after all, if you have unique needs, you should receive messaging about products or ideas that appeal to your interests, and marketers who play this right will gain greater results from their advertising investments. Just as parents and Santa Claus watch over children to assess behavior, other people will always be watching you too. The practice isn’t creepy in and of itself; what has gotten scary is the instant cycle time it takes someone else to pass their judgment. For our clients, we recommend looking beyond just response and conversion rates to also assess the real end customer experience. You’re trying to share information that benefits the customer, so pace yourselves, people. Everyone likes an elf who brings presents, but we all get nervous if he’s watching us too much.

Tweet Adder: Should you game the Twitter system?


Imagine the telephone was invented in March 2006, and now, three years later, marketing executives remain confused by this startling technology. “It’s a network to communicate with people, but only if we know their numbers? And they have to answer? So how do we make money off this?” the CMOs ask.

Ah, but new software promises to help marketers identify phone numbers of prospects, and then schedule automated phone calls every hour. Executives relax. “We can do robocalls! And at X percent response rate, we’ll make money!”

Sounds good, right?

Twitter, invented in March 2006, is becoming just such a robocall wasteland with software services such as Tweet Adder promising to help you “CAPITALIZE on the NEW Twitter phenomenon very quickly.” This is not necessarily good or bad; ethics, after all, are just agreed-upon levels of moral values, and if you have to sell like most of us do, then outbound contacts are not above you. Ad consultant Michael Gass has a detailed post about how to use these software systems to identify business prospects and then ping them with automated tweets; he pushes 373 old blog posts through two Twitter accounts trawling for leads. Some of the world’s most innovative businesspeople, such as VC dude Guy Kawasaki, fill their streams with useful links that appear human but are really scheduled with automated broadcasting software. Tweet Adder refines this approach by allowing you to identify people who work in certain industries; for example, you can follow everyone who in turn follows @mayoclinic to develop a target list of doctors and hospital service line execs to pitch for your ad agency or technology service.

Automation vs. authenticity

Go too far down this path, though, and you risk losing authenticity. New users often see Twitter as streams of random thoughts, but soon patterns emerge — people going @ateachother, carrying on conversations, debating ideas, sharing information. Within any active Twitter user’s base of 2,000 followers there may be 50 or 100 people who develop a close-knit communication club. Your expertise may be noticed by other firms, and PR people, and the business press. Authenticity is the way to build trust in that audience, and any whiff of automated salesmanship is the surest path to erode it.

If you just want to use Twitter to sell, by all means, build 50,000 followers in your target industry using tools like Tweet Adder and then robotically broadcast your blog posts with, say, SocialOomph. You’ll be spraying bait into fish-infested waters, and some may bite. But if you want to be known as a human being, you can always play the network like a real person. Your social network growth will be slower, but someone important out there may take notice … and give you a call.

Image by Tranchis. Hat tip to Edward Boches.

Coolest little fake shilling we’ve seen in a while


We checked in on the pay-per-tweet service Magpie, in which people online agree to turn over their personal Twitter accounts to let ads run. The ads aren’t disclosed. They look like genuine opinions from these people. These people get paid (a little) as messages are transmitted to thousands of online followers. Brands like Apple, Skype and Flip are participating.

Is this cool? Do such paid insertions in conversations break trust, even if “sponsorship” is disclosed, if the recipient can’t tell the source of the opinion?

If we told you the Flip camera is the coolest little device, would you now believe us?

Do you see the problem?

Google to sponsored blog posts: Your links are trash


Dear Bloggers: Behave. Because if you write a lot of paid posts, your blog could get demoted by Google in search results.

This is the latest wrinkle in the story about how many bloggers are now willing to sell their “posts,” or written opinions, to marketers trying to buy their way into social media. A few years ago a guy named Ted Murphy thought to encourage legions of bloggers to shill, er, write about products for payment. Google got wind, and pretty much shut it down by removing the “page rank” of all such bloggers — turning them invisible on the web.

Murphy recast his company to IZEA, and now has launched massive efforts to make paid blogging placement more respectable with new rules such as full disclosure — bloggers who shill must declare it a “sponsored post” — and telling advertisers the bloggers can write whatever they want. The new model is now being seeded across the internet by engaging top bloggers (Chris Brogan, Joseph Jaffe) to write, show it’s cool, and encourage other bloggers to do the same.

This week, Google moved again to shut it all down. Matt Cutts, an enforcer at Google’s web-spam team, has re-announced that any bloggers who write paid posts must include a “no-follow tag” — a snippet of code that tells Google’s magic machine to ignore this post and any links from it, because it is worthless. This is a harsh judgment against paid posts because any marketer who hopes to generate 10,000 links into her brand’s web site from paying bloggers will now get exactly *zero* links (or more accurately, the scoring from those links will not drive up the brand in Google search results). Not exactly a good return on investment. Google went further by also warning bloggers if they don’t comply, they’ll face corresponding action. Cutts wrote, “Google — and other search engines — do take action which can include demoting sites that sell links that pass PageRank, for example.”

We covered the entire ethical debate in our recent BusinessWeek column and can only say, well, Google has voted. If bloggers continue to let their opinions be sold — even while disclosing the brands who pay them for their supposedly unbiased thoughts — they now risk having all their links back into the web go up in smoke.

Photo: PSD

An open letter to Forrester about payperpost ethics


Sean,

I am disappointed that Forrester would condone paid posts as a legitimate marketing model. Bloggers lose out as they erode their *authenticity* and brands lose consumers’ *trust* — two important aspects that make this type of program a failure.

Paying someone to blog about a product is a disturbing low point in human ethics, because it manipulates a system to artificially elevate a topic where it does not belong, inside human opinions. It is damaging because the readers cannot judge where the message is coming from, or whether it is true or false.

Sean, let’s imagine Gartner gives you a $500 gift card if only you say in your next upper management meeting, “Hey guys, speaking of our research, have you seen what Gartner is doing lately?” You might be free to voice your own opinion, and say with transparency that the mention was paid, but you are still inserting a brand into a conversation where it has no bearing. People in the meeting would wonder if your opinion were real. Your authenticity would be eroded and Gartner would look a bit the fool. Do this enough and no one will listen to you in meetings.

And that’s the real point. These gimmicks will eventually erode the value of bloggers’ individual voices and the brands they shill.

I’m certain this trend will continue, crest, and then fade as the pollution among real social media conversations creates the inevitable backlash. See telemarketing and email spam for two recent examples of other networks where overly aggressive intrusions failed due to consumer discontent.

As for the bloggers who consider it: If you don’t see the ethical problem of selling your own opinion, then perhaps you don’t place much value on your own voice. Keep it up, and your readers will agree.

(Reprinted from our comments on Forrester’s blog.)

Photo: Imfreelykeely

Debating the ethics of SEO


Ad guru Bob Knorpp asked recently “Why do tech people hate SEO?” As you probably know, SEO stands for “search engine optimization,” a controversial approach to elevate a web site in Google search results by either stuffing it with content that Google may pick up on or creating inbound links from other web sites to make the content on the site appear more relevant. It’s all a bit of gamesmanship to put your brand somewhere it may (or may not) belong.

(UPDATE: SEO expert Michael Gray suggests that the description above is flagrantly inaccurate. For the record, SEO involves changing web site content, HTML coding, and relations to other web sites to allow content to be found more easily by search engines. Poor examples, or so-called Black Hat SEO, can include “keyword stuffing” or filling pages with tons of keywords to try to trick search engines, a naughty no-no, but if you read Michael’s comments in full below you’ll see there’s more than one way to skin an SEO cat.)

Bob wrote,

“Internet purists pride themselves on the idea that the Web is a world-wide leveling of the playing field. It is a place where anyone can rise to the top based purely on the quality of their thinking and expression. In-bound links and being part of the conversation online are benefits that are earned over time…

“SEO, however, ‘cheats’ that cycle. Thoughts and ideas that have no relevance or that may not offer the best solution can be transported to the top of the search results over-night. And frankly, that drives the tech community crazy.”

We responded,

“We have met the SEO enemy and it is us … because humans have a tendency to pollute every ecosystem, including advertising systems. We did it with phones (telemarketing, now almost dead), email (spam, now wildly annoying and ineffective), radio (Clear Channel once ran 12 minutes of spots per hour and killed ratings, then later retrenched to 9+ minutes with a ‘Less is More’ campaign to try to woo advertisers and listeners back), and now social media (think of bloggers shilling $500 Kmart gift cards to try to build link Ponzi schemes, throwing the beautiful names their mommies gave them out the ethics window).

“I write this not to say that any form of media is ‘bad’ — but rather, just as farmers who rush to herd their sheep into a common grass area to feed their own flocks might destroy the grassy commons, every individual’s incentive to be heard can destroy the greater ecosystem. What marketers usually fail to see, in their individual lack of self-control, is we *all* need a healthy environment for advertising to succeed.”

What do you think? Is it fair to try to manipulate the link structure of the web to make your own material rise to the top? Or is there a point where exploiting a networked system goes too far?

Photo: Hobo

If we all believe, is it truth?


Folie à deux means madness of two — a rare psychiatric syndrome in which a delusional belief, or psychosis, is passed from one person to another. There is a story of a woman named Margaret and her husband Michael who adamantly believed invisible people were living in their house spreading dust. The craziness usually starts with a dominant person, called folie imposée, who begins imposing the delusions on others … until it becomes folie à plusieurs, the madness of many.

Plug in the 2006 real estate market, or the 1998 internet bubble, or any major religion, and some could argue the irrational beliefs held by so many are a mental fiction spread virally from one to another. If you think there is really truth, read the brilliant post by Eliezer Yudkowsky who argues that humans make decisions not only by observing facts, but by slyly calculating the credibility of other prior witnesses. If enough others tell you something is so, why, you tend to begin believing … weighing their opinion more than your own cognitive observations. It’s probably an evolutionary shortcut; your cave-dwelling great-great-grandpa couldn’t wait to collect all the data himself on incoming rabid saber-toothed tigers, so when his buddy Org shouted “Arg! Tooger!” he took that as a good sign to run for his life. Yudkowsky writes, “if you know that a cognitive machine is a rational processor of evidence, its beliefs become evidence themselves.”

Recently some contacts on Twitter engaged in a rancorous debate over whether it is ethical to receive payment to write opinions. We’re working on a column for a national publication on this, and while we come down against the “pay per post” idea — bending minds with cash is far different than paying for the location of an ad — the ethical argument is nuanced. The most difficult judgments in the modern world are weighing the data for yourself when there are so many inputs and opinions trying to bend your will. It’s counter-intuitive, going against everything that made human clans survive. If 100 people judge your idea to be wrong, is the bell-curve of opinion right? Or do you let your mind stand alone?

The problem with Chris Brogan’s Kmart promotion


If you read blogs regularly you know that certain minds carry authority. Chris Brogan is one, attracting about 185,000 readers to his main site each month, and he provides wonderful advice on how to set up and manage social media programs. He’s an upcoming guru akin to Don Peppers in the 1990s and Seth Godin in the early 2000s.

So why are we, an ad agency, disturbed that he is pitching Kmart on a blog?

Call it the gray area of o-pay-nion, where an advertiser offers an online blogger money to write about a product. Advertorial copy has been around in newspapers since the 1940s and the intent is often to deceive — trick the reader into thinking the opinion is a valid autonomous endorsement, when really it’s all staged. IZEA is the agency behind the recent Kmart campaign, where six influential bloggers were given $500 gift cards to “experience” shopping at Kmart and then blog about it. Chris Brogan’s write-up was clearly labeled a sponsored post. In between glowing endorsements of Kmart’s vast product selection he included a few faint critiques, such as dismay that Kmart has a limited CD selection.

So what’s wrong?

This pay-per-post gambit dilutes the power of both pure editorial and paid advertising. Let’s start with the pure editorial — it’s an opinion or news report that is influenced by no one but the writer, and readers love strong minds with pure intent because they believe the information provided will be 100% useful. You may not agree with the liberal commentator on MSNBC or the conservative on Fox News, but you believe where they are coming from, and because you judge the input to be factual you take it in entirely to recast as your own opinion. Editorial comments are healthy vegetables for the mind.

Paid advertising is the flip side, an obvious attempt to spin a message to get a consumer to buy. (We work all day at our shop designing media plans trying to make ads work as effectively as possible. Yes, it’s manipulation.) But the beauty of promotional advertising is it is obvious — and consumers can judge it fairly to see if the message about the new car, new bank, or new cell phone is something they want. Paid advertising is the dark chocolate for the mind, a sweet treat that may be bad, but you indulge because you know it will fulfill your cravings.

Alas, pay-per-post blogging makes a distasteful chocolate-veggie soup. It’s worse than advertorial because the opinion of a noted writer is misrepresented to favor something that he or she really does not. The resulting opaynion makes the ad message weak (do we believe what Mr. Brogan writes about Kmart?) and erodes the power of the editorial voice (hmm, what do we think tomorrow when Mr. Brogan blogs about another retailer?). Neither writer nor sponsor win.

We don’t mean to sound haughty; we have deep respect for Mr. Brogan, who over tweets with us this Saturday morning professed his innocence. Many of his regular readers agree — hey, the post was clearly labeled “sponsored.” But if you think beyond the $500 caveats you’ll see upcoming thought-leaders at risk of losing the credibility of their opinions, if some of those thoughts are forged under the banner of “paid idea here.”

Yes, advertorials are common in print, and talking heads give voice to ad scripts on the radio. But the internet media is more bent toward knowledge … and now that knowledge is getting bent. The more bloggers who sell out, even under full disclosure, the less value the blogging channel will have — until the information is so discounted that marketers will have to move elsewhere to find new ways to manipulate the minds of consumers. Maintaining autonomy, especially in the world of marketing and advertising, is an almost impossible task. Here’s to the growing few who try.

UPDATE: Chris Brogan responds to the Kmart pay-per-post controversy here. Most of his readers don’t see a conflict. What do you think?