Data and privacy

How to be clever – not creepy – with customer data

Customer data can be a marketing gold mine, but businesses must take care to target ads in ways that won’t seem too intrusive.

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Kimberly Cho

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Businesses are collecting ever-increasing customer data and marketers targeting consumers with more personalized ads. But when does hyper-targeted marketing cross the line from clever into creepy?

In 2012, an angry customer approached a manager of a Target store in Minneapolis, US, demanding to know why his teenage daughter was receiving coupons for baby clothes and cribs. The manager, who had no idea why, apologized.

Days later, the customer called to apologize, having found out his teenage daughter was, in fact, pregnant.

Target’s customer-tracking technology showed people ads based on what they bought. It had identified that purchasing vitamins, cotton balls and fragrance-free skincare products suggested future purchases of a crib and baby clothes, or in other words, that the customer was expecting a baby.

Businesses can collect huge amounts of data about customers, and when combined with shopping or browsing patterns, it can tell marketers much about someone, sometimes more than we know ourselves. They can correlate data from different sources into a ‘buyer persona’ that may be surprisingly accurate.

But ads based on this deep data collection and correlation can come across as creepy, leaving consumers wondering how brands know so much about them.

Tracking people across the internet

“Most websites and emails contain some form of tracking,” Karen Gullo of EFF (Electronic Frontier Foundation) told me. “Cookies let advertisers follow your web searching. Tracking pixels in emails tell the sender if you opened the message. Tracking links let websites know what you clicked on. If you’ve ever filled out an online form, the data may have been collected even if you didn’t submit the form.”

Social media apps can also collect and retain information, creating accurate user profiles. It can feel like your phone is listening to you when Instagram starts showing you ads for coffee beans just as you’re running out.

But with great data comes great responsibility. ‘The more targeted the ad, the higher the response’ has been a standard in advertising for decades. But as ads grow more focused, they begin to cross lines. Marketers must think about how their campaigns might come across to customers.

What makes ads creepy?

Research shows that personalization tends to increase response, but it can also have the opposite effect. When personalization and targeting are ‘too much,’ it puts people off by seeming intrusive.

CEO of Email Optimization Shop Jeanne Jennings told me, “I got an email from a department store where I shop, with my first and maiden name in the subject line.” She had not used her maiden name for 20 years and could not figure out how they knew it. She eventually worked out they got her maiden name through her social security card, which she had shared when setting up her debit card.

The further we get from good personalization, the more awkward the information – feeling ‘wrong’ or too personal. That’s when things start getting strange.

Jeanne Jennings, CEO, Email Optimization Shop

While perceptions vary between customers and age groups, people tend to base judgments of creepiness on four things.

1.   Consent: Was the data collected voluntarily?

Using data voluntarily provided by the customer means great targeting, but using third-party data or data obtained without consent can be an invasion of privacy.

“You want the customer to be pleased the content is relevant. You don’t want them to wonder how you got that information,” said Jennings.

2.   Explainability: How does a brand know this about me?

“Some of the best recommendations… suggest why you are seeing that recommendation,” said Emad Hassan, former Head of Data Analytics at Facebook and Paypal, on CMSWire.

Using targeted data in a way that makes it easy for the customer to know why you have the data reduces intrusiveness. For example, a donut shop might say, “From your purchase data, we know you’re a huge fan of our donuts, so here’s a special discount for being one of our top customers.”

3.   Third-party data: When information given to one company shows up in an ad for another

Using demographic or preference data from a third-party source to target consumers often comes across as intrusive. Someone buying books for a niece or nephew from a children’s book shop may not appreciate a children’s clothing brand urging them to get “their” children new clothes for school. There’s presumptuousness alongside exchange of personal data between brands.

“If you learned that a friend had revealed something about you to another friend, you’d probably be upset, even if you have no problem with both parties knowing the information,” wrote Harvard Business Review.

4.   Security and privacy: Will this brand keep my data safe?

Consumers want to know they can trust brands to store and process their data ethically and securely against hacks and breaches.

Poor data storage or weak privacy policies can turn consumers off. Seeing personal information pop up in an ad or communication from another brand can be distressing and feels like a breach in trust between consumer and brand.

The same principles that apply to social interactions apply here – don’t use information gained without consent or from a third party, keep customers’ data secure and avoid using sensitive information like sexual orientation, health information or financial status.

“It’s about privacy, safety, and security, and being able to control your data and internet experience,” said Gullo.

Future advertising: Hyper-targeted… or not targeted at all?

Third-party cookies are put on a website by someone other than the website’s owner and collect data for that external entity. Many search engines have already, or plan to, phase these out soon.

The third-party cookie ban means marketers must rely more on data from their own company’s customer interactions. This may mean more transparent, direct and explainable ads that improve trust between the consumer and the brand.

Jennings thinks marketing’s future should be more responsible and smarter personalization. “As the industry is more responsible with how they use data, personalization is going to stay around but be better,” she said.

Advertising must respond to evolving consumer attitudes to privacy, but data-based targeting is likely here to stay. How companies obtain and use data will change, focusing more on consent and privacy. Make sure your business gets ahead and leaves the (sometimes creepy) old ways behind forever.

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About authors

Aishwarya Jagani is a freelance tech writer based in India. She writes on cybersecurity, science and the human impact of technology.