Alessandra Lariu, SheSays
Posted October 12th, 2012
Alessandra Lariu, Co-Founder, SheSays
What happens to advertising when users have full control of their personal data?
There is no doubt we’re becoming increasingly more and more connected. To put things in perspective, five years ago you probably had one Internet-connected device in your living room, one year ago you had five, this year you may have ten and in five years this number could be fifty. From your fridge to your clothes, your belongings will become ‘always-on’ devices able to exchange information about you with people or companies. This is not news to anyone, but when you think about all the data these devices create and who owns it, then things starts to become interesting and possibly industry changing.
All this connectivity should mean more personalized advertising experiences where consumers are more empowered. Today this couldn’t be further from the truth. The more connected we are, the less power we have. The power lies with brands and companies rather than individuals. But that could change.
Data privacy today
The first reason for our lack of control stems from that fact that all our variable data, i.e. ephemeral data from online activities, does not sit with us. It sits on other companies’ servers. Every time we transact or upload something, our stuff is saved with a third party company who may or may not turn around and sell that data.
In addition, our evergreen data (i.e. our name, credit card number, home address) is saved in silos by different companies. In other words, there isn’t a single hub where companies can access data about an individual.
Furthermore, privacy and tracking options offered to consumers currently default to favor companies not people. In other words, unless you are looking closely, your data is going walkabout.
And finally, real personalization does not exist. Right now companies look at ‘big data’ or combined behavioral patterns of people so they can pretend to personalize experiences based on aggregated behavior. That’s not anywhere near true personalization and does not give consumers any differentiated experiences. Just as an online advertising example, if you do a search for bathtubs in Google, then the banners you see for the next few weeks are all about bathtubs. Right now, that’s the best we can do but that seems very basic and blunt.
Things need to be fixed on many levels: transparency (users being able to see who knows what facts about them), access (users having a copy of the data themselves), and control (users owning the data or rights to their data exclusively).
What should we do now to get ready for this future?
The quest to give users more transparency, access, and control is on its way. A few companies have been working on giving individuals full control of their digital behavior that could hugely impact the dynamics of advertising. Projects like Tent, Kinetx and Gluu, only allow other services to access data when they can be trusted. These two-sided contracts mean users can then negotiate with Visa, Apple, and BestBuy and find terms that work for both parties. That’s a power shift.
What advertising could look like in 2020 when consumers have more control of their data
Brands and their ad agencies are struggling to understand and control data. Those with direct consumer relationships are in an incredibly powerful position to dis-intermediate consumer relationships. A grocery store through use of its frequent buyer cards can track decades of a customer’s purchase history. Because they have access to the data, grocery stores can target specific consumers to switch to a store brand product and leave Unilever and P&G in the cold. Consumers think they have relationships with brands, brands know they have relationships with data. Once enough of that data belongs the consumers a much truer relationship can begin and both brands and their ad agencies will have to learn how to deal with individuals rather than consumer demographics.
Just seven years ago most marketing communication was still fairly one sided, with brands blasting messages at us whether we liked it or not, and it worked. With the advent of mobile and social media, a new dimension was added to the world of brands. Advertising professionals had to master not only the way a brand looks and its tone of voice but also how it behaves: how it gets shared and the traces it leaves behind. Very soon advertising professionals will have to master new ways brands can negotiate even higher frequency trade with people, possibly directly.
Consumers could form the equivalent of ‘buyers groups’ to negotiate for better deals, or to get brands to create products that meet a group’s needs. This is starting to happen as a marketing stunt—Uniqlo and Oreo have recently run campaigns that dabbled in ‘group buy,’ but the brands are still dictating the terms; this could switch. Customers might get together to design a kitchen appliance as a result of months of collaboration, or a small group of friends out one night can search for a good deal on drinks. They could broadcast some basic facts about themselves and a bar owner having a slow night might offer them interesting deals or experiences. This cross trade could be completely automated, think high frequency trading, not eBay. The bidding process would be based on each party’s needs and willingness to sacrifice. Deals would be private, customized and offered on a take-it-or-leave-it basis to customers.
Brands will have to master the art of truly personalized experiences where most of the input for advertising opportunities comes from the users and not the brands. And brands will have to become what they claim without hiding. In the new world it is easier to be what you claim than try to convince consumers you’re something else. If consumers define themselves by their choices of brands, brands should be prepared for inspection under a far more powerful consumer microscope and be prepared for consumers switching loyalty more often.
Advertising agencies were always known as the ‘hidden persuaders’. We do that through our craft of story telling, art, and design. We will still need to be able to persuade people but it might be that we need to persuade them to give up their data rather than buy some Nike shoes. Imagine a TV spot where instead of an athlete telling you why he or she wears certain sneakers, they list the reasons why you should feel comfortable allowing Nike to have access to your data. That might not sound very interesting but we are masters of making the boring sound interesting. Much like a true relationship.
The author would like to thank Daniel Siders for his valuable contribution to this article.