Transcript 9-Marketing and Internet

CSc 375
SOCIAL ISSUES IN COMPUTING
Department of Computer Science
City College of New York
Spring 2006
Copyright © 2006 by Abbe Mowshowitz
TOPIC 9. MARKETING
AND THE INTERNET
A. Introduction
1. Simple ‘old style’ direct marketing
campaign for product X
- obtain list of consumers who have
purchased or used something like X
- prepare advertising copy
- stuff envelopes, stamp and ship
TOPIC 9. MARKETING
AND THE INTERNET
A.2. Needs of advertising & marketing
a. Information about potential customers
b. Methods for analyzing consumer
behavior
c. Means to reach or interact with
potential consumers
d. Advertising/marketing techniques
* Look at each in turn.
TOPIC 9. MARKETING
AND THE INTERNET
B. Information about potential customers
1. Commercial sources of consumer data
(e.g., Dunn & Bradstreet’s database on 60
m. American households)
2. Registration on company Website
3. Transaction data from sales records
4. Data from tracking browsing behavior
5. Interest expressed in chat rooms
TOPIC 9. MARKETING
AND THE INTERNET
C. Analytic methods
1. Segment consumers into groups according
to demographic and other data
2. Construct profiles of likely buyers
3. Identify target groups for specific
marketing campaign
4. Estimate likely outcome of campaign from
pilot studies
TOPIC 9. MARKETING
AND THE INTERNET
C. Analytic methods (cont.)
Origins in studies of voting behavior
- segmentation: blocs of voters based on
demographic and other data
- profiles: voters likely to support a candidate
or issue
- target groups: for specific election campaign
- predict outcome of election using exit poll
data
TOPIC 9. MARKETING
AND THE INTERNET
C.5. Segmentation, profiling & targeting in
practice: “Data warehouses”
-details of past customer transactions
- credit scores
- demographics
- motor vehicle records
Identify subsets of population likely to
respond to promotions
TOPIC 9. MARKETING
AND THE INTERNET
C.6. Customer profiles & feature
construction: data analysis problems
- massive numbers of records
- sparseness of data on consumers
and products
- heterogeneity: large variation in
purchasing behavior
TOPIC 9. MARKETING
AND THE INTERNET
D. Distribution channels for marketing
1. Broadcast
- TV, radio, newspaper, magazine
- mass email
- Website publication
2. Direct advertising
- targeted email
- chat rooms (product users)
- recommender systems
TOPIC 9. MARKETING
AND THE INTERNET
E. Internet marketing
1. Facilities
- ease of getting feedback from customers
- interactive capabilities between company
and customer
- enhanced support from product users
- new ways of obtaining data on customer
behavior
TOPIC 9. MARKETING
AND THE INTERNET
E.1. Facilities (cont.)
- large, global audience
- enhanced possibilities for design of
advertising material
-- static multimedia
-- streaming video
- aggressive/unavoidable ads (e.g., popup)
TOPIC 9. MARKETING
AND THE INTERNET
E.2. Influences on online buying behavior
(Observations of Chau, et al., 2002)
a. Demographics alone not good predictor
- “wired lifestyle”(Internet experience) is key
- product information search is most
important predictor
b. Cultural differences
- US: Internet used for information search
- Hong Kong: used for social communication
TOPIC 9. MARKETING
AND THE INTERNET
F. Marketing and privacy
1. Specific problems and threats
- cookies
- tracking of mouse clicks
- mining of transaction data
- monitoring chat rooms
- availability of marketing data for use by
intelligence and law enforcement
TOPIC 9. MARKETING
AND THE INTERNET
F.2. Countermeasures
- activate cookie alert
- check/delete cookie file regularyly
- note Website privacy policies
- surf anonymously (anonymizer.com)
- give information sparingly (bugmenot.co)
- stay away from the Internet
IS GOVERNMENT OR BUSINESS
THE GREATER THREAT?
TOPIC 9. MARKETING
AND THE INTERNET
F.3. Consumer privacy
(observations of Earp & Bauer, 2003)
a. Protection weak
- FCC has statutory authority to
prohibit “unfair and deceptive” trade
practices
- lacks resources to regulate Internet
TOPIC 9. MARKETING
AND THE INTERNET
F.3.b. Consumers willingness to give personal
information online
- highest on gender & age
- lowest on Social Security numbers
- type of Website important (e.g., more
open to health than retail sites)
- well-known sites command more
confidence in general
- opt out provisions important; privacy
policy and 3rd part seals less so
TOPIC 9. MARKETING
AND THE INTERNET
G. Fair Information Practice in Cyberspace
1. Data quality principle
- relevant to purpose
- accurate, complete and current
2. Use limitation principle
- specified purpose only
- changes by law or permission
TOPIC 9. MARKETING
AND THE INTERNET
G. FIP in Cyberspace (cont.)
3. Openness principle
- pointers to personal data must be
provided
- indications of intended use
- designation of data controller
4. Individual participation principle
- right to discover and inspect data
- right to challenge and rectify data
TOPIC 9. MARKETING
AND THE INTERNET
H. Privacy as economic good
1. Product/service enhancement: competitive
ploy
2. Saleable commodity: like loyalty in retail
store card programs
3. Royalty payments for personal data
- create countervailing power for the
consumer
- feasible with micropayment systems
TOPIC 9. MARKETING
AND THE INTERNET
I. Trade offs
- How much do you care about your
privacy?
- enough to forego the convenience of a
credit card or give up possible
bargains in the grocery store?
TOPIC 9. MARKETING
AND THE INTERNET
J. Intensified surveillance in the Internet
marketplace
1. FBI’s Carnivore system
- FBI hardware placed at ISP site
- monitors traffic/email addresses of
‘suspects’
2. User logs kept by online companies
TOPIC 9. MARKETING
AND THE INTERNET
J. Intensified surveillance (cont.)
3. Regulation of encryption: to provide
‘backdoor’ to intelligence agencies
4. Echelon
- highly secret NSA data mining system
- existence confirmed by European
Parliament (concerned with its potential
use for industrial espionage)
TOPIC 9. MARKETING
AND THE INTERNET
J. Intensified surveillance (cont.)
5. Proposed Total Information Awareness
system
- existence of vast arrays of data is
seemingly irresistible to officials
- Congress has yet to authorize it but may
in the future
TOPIC 9. MARKETING
AND THE INTERNET
K. Marketing as form of social control
1. Reinforcing ‘desired’ behavior
- targeted advertising
- group pressure in chat rooms
2. Defining norms of behavior
- create affinity or user groups
- introduce/cultivate norms
- inject propaganda in discussions
- manipulate group pressure
TOPIC 9. MARKETING
AND THE INTERNET
K.3. Operative mechanisms
- desire to belong to group is
powerful motivator
- attitudes and beliefs can be
modified by exercise of group
pressure
TOPIC 9. MARKETING
AND THE INTERNET
INDIVIDUALISM
vs.
SOCIAL CONTROL
TOPIC 9. MARKETING
AND THE INTERNET
K.4. The New Individualism
“… So increasingly narrow and accurate will be
the target that each individual will feel
himself all the more an individual through
the direct mail he gets. What he receives
will be so likely to be of interest to him
and to be slanted to his particular needs
that, even if he does not buy, he will feel
that someone has gone to the trouble of
knowing what he might want.”
- Isaac Asimov, 1973 (NYT Supplement)
TOPIC 9. MARKETING
AND THE INTERNET
K.5. Asimov updates Socrates
“Know thyself”
becomes
“Know thy consumer profile”
Are we indeed just what we consume?