Ecommerce times has recently put out a good piece, titled Online Ad Targeting: From ‘Maximize’ to ‘Optimize’. In it, Troiano effective notes that online advertisers aren’t making much money by bombarding their customers with irrelevant ads, and the attempts to use deep packet inspection technologies as NebuAd and Phorm strike potential customers as ‘creepy’. He suggests that advertisers adopt three principles:
- User control: Users should own and control their personal information. Period. It sounds like a novel idea, but when people have control over their own personal information and can choose to share it or not share it with whomever they want, that will make them feel all warm and fuzzy inside.
- Transparency: Offering an opt-out option is not enough. Any online entity that tracks or collects user data of any kind should be straightforward and alert users to its practices. It’s not wrong to target ads, but it is wrong to collect users’ personally identifiable information without their permission. If companies adhere to this level of transparency, the need for potentially stifling congressional control is significantly lessened.
- Trust: Offering users a high level of control over their information and requiring a high level of transparency from online publishers and retailers will result in mutual trust. Users will share certain information about themselves in return for something they want and companies will promise not to use their information in inappropriate ways. Building this kind of trust is not easy, but when achieved it will create a mutually beneficial relationship.
This makes sense to companies for two reasons:
- It ensures that you aren’t collecting more data about people than you need – you’re best suited to target people who are actually interested in your work, rather than on individuals who are outside of your market. Of course, running ads online is relatively cheap, especially in comparison to large advertisements in physical spaces of downtown New York (for example), but you also risk alienating your niche customers by limiting the ‘cool’ appeal of your product.
- It ensures that you can maximize your profits within your core market, and spend time developing a relationship between them and you, rather than broadly trying to develop relationships with consumers that are less likely to be interested in your product.
The three principles that Troiano notes are, in essence, a money-savings actions intended to maximize profits. The difficulty with this model, however, is that while ‘baby’ advertisers in the online world might find this mode of customer analysis helpful, the 500 lb. gorilla, Google, isn’t ever going to adopt this kind of a rubric unless forced to. In the case of companies that generate revenue by identifying particular consumer habits, and then serving ads based on those habits, it is in their best interest to survey the entirety of the potential marketing ecosystems. This doesn’t mean that smaller companies adopting this ‘minimal collection’ style of data collection won’t be a step in the right direction for everyone, but only that the real worry, Google, will remain.