Marketing Roadmaps

Ethics

On Personalization and Targeting

by

There is no question that the digital media industry has been disrupted by the Global Data Privacy Regulation (GDPR). It’s been at the top of advertising news for weeks, and while the volume of articles may decline, the impact of the law has just begun.

I used to say that consumers like ad targeting, because it ensures that we see ads that match our preferences, but I now have a more nuanced view. It’s not targeting that meets with our approval. No one likes being stalked by the slipper ad simply because we clicked it once on Facebook. Ad targeting relies too much on assumptions about past behaviors based on lookalikes and other data matching. It’s close, but very often, not. quite. right.

What we really want is personalization. To be addressed by our (correct) name when appropriate. To be presented with products that match our age, stage, and personal preferences. To be offered content (and ads) relevant to our interests.

First party data drives personalization, which is far more powerful than targeting.

Personalization is going to a store where the clerk greets you by name, asks if there is something special you want, and then offers solutions based on your answers. Targeting is the clerk stalking you through the store, thrusting products in your face based on an assessment of your “profile.”

I’ve written quite a bit about the opportunity we have to reforge better, consent-based relationships with customers in which we offer real, sustaining value for the privilege of using their personal data. Here are some ideas on what we might do.

Don’t ask users for too much or unnecessary information. Only ask for what you need to deliver value back to them. We’ve gotten so used to collecting everything under the sun, “just in case” and for targeting later marketing efforts, regardless of whether it makes sense or we have a specific use for the data. For example, buying a concert ticket. Certainly we need credit card information and the billing address to verify it. But we don’t need annual income or gender or marital status to deliver a concert ticket. We ask those questions out of habit, so the data set is complete.

GDPR requires that we inform users how we will use the data, but I recommend we do a better job than a blanket “for business purposes.” Have a reason that adds value for the consumer, especially for asks that go beyond those needed for the transaction. For example, your event is planning special activities for families with children, but to staff them appropriately, you’d like to know ages of the children attending. It’s reasonable to ask for this information during registration.

Encourage loyalty and repeat visits to your content by using the data your customers do share with you to personalize the experience. This could be as simple as customizing their “ front page” into your site with content that matches their preferences to explicitly making recommendations for products and services. Pinterest and Flipboard are examples of content platforms whose business model is built on the simple concept of consumers driving personalization by sharing their preferences to create their own contextual experience. Both have had their challenges in recent years, with the hyper-focus on third-party data, programmatic and targeting, but both will now be increasingly relevant, as brands and publishers alike start thinking about contextual distribution as an effective alternative.

Engage your community. Include the customers in the content with active experiences, not just passive viewing. Be useful and entertaining. Interactive content. Reviews. Community forums. Online focus groups and surveys. Free tools and widgets that make their lives easier. Cool stuff. Real-life events too. Remember — the reason social media works is that it is social. The media is just the vehicle for the human connection we crave. With each other and with the brands we love. The more personal the consumer’s experience is with your brand, the more you build mutual trust and utility with your content (and yes, your marketing,) the more likely your customer is to share the personal data that will improve the experience. For example, a consumer might not want to share age or income with a news or lifestyle site, but have no problem sharing it with a financial site in exchange for using a college planning tool.

Speaking of social media, use it to foster connections, distribute content and promote your brand, but do not put all your eggs in a basket owned by another. Build your audience and your customer relationships on your owned properties.

There’s going to be a lot of noise and confusion around GDPR and its impact for some time to come. I’ve already heard the expected arguments that regulation stifles innovation. While there is some merit to the argument, regulation also offers an opportunity to be innovative. To find ways to solve business problems while respecting the social good — in this case personal privacy — that the law was created to protect.

Compliance with privacy laws has costs. Simply having best practices about privacy absent regulation, which some companies like Apple already do, has costs. But the opportunity for deep, sustained customer relationships is far greater. That’s where marketers should be placing their attention.

Glass half full.

—

Not sure how to get started? I’d love to help you engage your customers, build loyalty and drive results for your brand with an innovative digital strategy and content ecosystem. Even better, the first hour is free. Email sgetgood@getgood.com to book your free consultation. I’ll give you some thought starters during our conversation, and we can go from there.

Email box filling up with updated privacy notices? Thank the GDPR.

by

Wondering why your email box is filled to the brim with companies asking you to opt-in to their new privacy policy or renew your subscription to their newsletter? It’s all due to Europe’s General Data Privacy Regulation (GDPR) which goes into effect next Friday May 25th.

Recently, I’ve been writing a great deal about GDPR and the impact it will have on the digital marketing ecosystem. Worldwide, not just in Europe. Beyond the required compliance, I see it as an opportunity for brands to build stronger relationships with their customers (and make more money!) by creating offerings and policies that respect privacy and offer the consumer real value in exchange for use of personal data.

But none of this will happen overnight. For the most part, advertisers, publishers and ad tech companies are in a mad scramble to comply with the law by the deadline of May 25th, or at least show good faith efforts. Points for trying and all.

Here a short primer on how the GDPR deadline impacts consumers.

Overflowing email boxes

The most visible immediate impact for the consumer is all those emails with opt-ins and links to privacy policies. GDPR requires companies to obtain consent for use of the personal data of EU citizens, but for practical purposes, most companies are executing their plans worldwide. Consent is required down to the specific uses, and brands must provide mechanisms for consumers to manage or withdraw their consent. This is an oversimplification but it will do for today’s purpose.

Most privacy policies were written much too broadly to be acceptable under GDPR. Even if they specified the uses the company would make of the data, they didn’t offer a mechanism to withdraw consent. And many more issues beyond that simple one, from sites that didn’t really offer “true consent” in that “free” functionality was contingent upon the submission of private data, to collection of data that wasn’t really necessary for the business purpose at hand, but helped the collector understand more about its customers for future targeting. For example, if you are buying a ticket for an event open to the general public, does the organizer need to know your gender or income to process the transaction? No. That information is used for marketing and audience targeting. Under GDPR, the event organizer has to provide much more information about, and justification for, the personal data they are collecting and potentially sharing onward with other partners, and give you a mechanism for managing that consent.

You will probably get an email from every site and every email newsletter you ever registered with, even ones that you long ago forgot. And if they DO share or sell your data, they are looking for an opt-in to the new policy, so that can claim they have your consent. In the long run, I don’t expect that’s going to be sufficient consent for the regulators, but it is why you are being asked to “renew” your subscription. Even though it may damage their subscription numbers in the short term, it is a whole lot easier to scrub the list and move forward with consumers who’ve consented than to keep people on for whom they have no audit trail, of any kind. That’s also why multi-nationals and companies conducting international e-commerce are generally applying the same policies across the board. It makes no sense to have double overhead by having one system for the EU and another for the rest of the world. Especially since other nations may follow suit with similar privacy laws and matching IP addresses to physical locations is far from foolproof.

What exactly are you giving permission for?

From a casual reading of my own emails, companies are keeping these communications pretty simple. They outline the uses they make of your data, and provide guidance on how you can manage consent. The thing you need to watch out for is whether they share or sell your data to other parties, and how you can manage consent once they have shared your data on. Companies are required to have a mechanism to manage this, and quite frankly, my take is that many haven’t gotten very far along with this part of the complex GDPR compliance process because it requires cooperation among multiple partners in the technology chain. And that has been slow in coming, even though the deadline has been known for a long time.

Generally speaking though, in my opinion, the more specific the policy is, the better off you are, even if it seems like a PITA to read all these policies. The thing I would be most wary of is when the site/firm uses “legitimate business interests” as a general reason for sharing your personal data with a third party. That’s a handwave that won’t pass muster. Especially if they haven’t produced a consent mechanism.

You should also expect more detailed sign-up forms going forward, both when you are signing up for access to content and subscribing to newsletters.

Some advertising terms that will help you better understand this privacy debate.

First-party data — That’s the data that you share directly with the website you are visiting. It can be personal data that you share or anonymous data that the site collects as a result of your use of the site. Privacy regulations are most concerned with personal data that can be used to identify or target you, and how companies will protect it and your rights to your own data. The opportunity for brands inherent in GDPR is to build a stronger relationship with you so you have incentive to share personal data with them — to make products better, to get more relevant advertisers, and so on.

Second-party data — This is not used that frequently. It refers to when a site shares/sells first-party data about you with a second-party, who then uses that data to contact or market to you. For example, a conference shares its registration list with its sponsors, who then contact you directly with offers. The conference (the first party) is obligated to get your permission to share your data with the second party, but the data is typically used as is, not combined with other information to create super-sets of data.

Third-party data — This is where all the action is with regard to GDPR compliance. The basic issue is that the digital advertising ecosystem relies on a variety of technologies to target and deliver ads to consumers, using data aggregated from multiple sources to create new “super-sets,” which identify consumers even more discretely than the original data sources. As a vastly oversimplified example, we combine the data from a media website with data from a luxury goods company to target ads to site visitors based on their past purchases of luxury goods. The basic concept is sound; it helps advertisers deliver ads to the people most likely to be interested in the products, BUT it also introduces a privacy issue. If I am the consumer, I did not give my information to the luxury goods company to facilitate delivery of ads on a media website. I intended to buy a product. There was probably a blanket consent within the transaction to the advertising use, but it most likely doesn’t pass the GDPR sniff test.

Right now, a lot of very smart people in the ad tech world are working to figure out how to manage consent for third party data. It’s tough, because it isn’t simply about the initial consent; the consumer has the right to withdraw that consent at any time, and then all the partners in the chain have to remove the data. In my opinion, it is worth solving but it will increase advertising rates for this premium targeting. As it should. There will be a whole lot of infrastructure to manage the consent as well as a burden on the first-party who collects the data initially to market the downstream use to its customers.

Consumers won’t “see” the impact of GDPR on advertising delivery. Behind the curtain, though there is a lot going on. Ad tech innovation to manage consent but also, I believe a return to more reliance on first-party data and contextual targeting, showing ads based on the surrounding content, not presumed consumer behaviors.

I’ll be participating in a Conference Board webcast next Wednesday May 23rd at 11am ET to talk about GDPR and its impact on the digital economy. It’s free, so if you’re inclined to know more, please join us.

Is Facebook vulnerable?

by

For the first time since its very early years, Facebook is vulnerable. The Cambridge Analytica mess highlighted an important but oft-overlooked fact about Facebook’s business model. Facebook’s business is data, monetized through advertising, not community or social networking. Social networking and community are merely the means by which it gathers and aggregates data and delivers advertising.

This was easy enough to forget in the feature wars and fight for online social dominance, but the public now is generally far more aware than ever that if you aren’t paying, you are the product. It’s also now clear that Facebook’s business models skirt very close to violating consumer privacy, if not outright violations. When working as designed, by the way, not through some breach or hack into the system.

While Facebook has announced changes in the face of governmental scrutiny in the US and Europe following the Cambridge Analytica revelations, the response still seems pretty superficial. Lipservice, not customer service.

As a result, while I wouldn’t sign a death certificate for the platform any time soon, consumer trust in Facebook has seriously eroded, and it isn’t doing such a terrific job at getting it back. At least so far. I’m not sure they can. So many of the problems are built into the very infrastructure. This leaves an opening for competitors.

Others agree.

When asked by NY Mag whether a new platform could get a seat at the table, Dan McComas, former SVP of product at Reddit, said:

I think it’s absolutely possible, but it takes a couple of major factors. I think a start-up needs to think about the monetization and how it can work with the users instead of against the users. I think they need to figure out the right funding mechanisms and incentive structures that also work toward the users. I think they need to have the right product team in place to focus on users.”

Angel investor and entrepreneur Jason Calcanis has put some skin in the game, announcing via his newsletter this weekend a competition called the LAUNCH Open Book Challenge to find Facebook’s replacement. Seven winners will receive $100K investments from the LAUNCH Incubator. In his newsletter, he stated he is looking to fund a social network that is good for society, that will:

– Respect and protect consumer’s privacy
– Respect and protect our democracy from bad actors
– Respect and protect the truth, by stopping the spread of misinformation
– Not try and manipulate people by making them addicted to the service
– Protect freedom of speech, while curbing abuse (not easy!)”

If you’d like to follow along, or think you might like to enter, details are at openbookchallenge.com. The competition is open to existing projects as well as new ideas/paradigms, but ideas alone are not enough. The main criteria for selecting the semifinalists and the eventual winners will be ability to execute.

Reddit, Snapchat and perennial second place finisher Twitter are also in the hunt, but they may have too much baggage (and their own privacy violations) to prevail.

Something will succeed Facebook. It’s not a matter of IF, only of WHEN. Right now, WHEN feels a whole lot closer than it has before.

Influencer Marketing and Instagram: The peril of quantity over quality – MediaKix’s fake Instagram project

by

Earlier this month, influencer marketing company MediaKix released How Anyone Can Get Paid To Be An Instagram Influencer With $300 (or Less) Overnight, a project it undertook to prove whether was possible to game the system of influencer engagement on Instagram. In short, how easy is it to create fake Instagram profiles, purchase followers and then get offered sponsored content opportunities by the major influencer marketing platforms?

Turns out, pretty easy, at least for the two profiles the firm created – one focused on beauty, and the other on travel, not coincidentally I am certain, two content areas where Instagram is particularly strong, and the demand high for influencers with scale.

This has spawned a great deal of coverage in the industry trades over the past week, including AdWeek, PR giant Edelman  and Digiday. All bemoaning the fact that it is possible to game a social network and artificially inflate followers and engagement.

I’m mostly surprised that anyone IS surprised. The demand for volume, for more, more, more – bigger reach, more likes, more clicks — is bound to lead to both fraud and waste. It did in advertising, in search of the almighty click, and it has in social, in search of likes, comments, shares AND clicks.

Let’s take the two problems separately. Fraud is the intent to deceive by artificially inflating numbers, whether buying followers or engagements. Waste is the natural by-product of scale. Not every legitimate viewer/reader of a message is the target, no matter how good our demographic and behavioral targeting. Even today, with the phenomenal matching made possible by programmatic advertising, there will be waste, and targeting on social is a mixed bag. You can do it within a social platform like Facebook, but not across platforms.

In my opinion, the platforms are responsible for posting the first level of defense against fraud in influencer marketing. The social platforms, to police the activity and manage fraudulent accounts effectively. The influencer platforms, to build similar checks and balances into their technology so brands can trust their influencer recommendations.

Managing the impact of waste, however, is part of the influencer marketing strategy. Our best offense is to put scale in its proper place in the strategy. Quantity – followers, likes, comments, shares, clicks – is not the only metric that matters. Quality of engagement is just as important. In the long run, perhaps more important. That means balancing your strategy, and including tactics that lead to deeper engagements with your current and potential customers as well as broader, more volume-centric microinfluencer tactics.

Remember: the influencer who matters is your customer. Always. That’s why influencer marketing works.

Disclosing sponsored content: Celebrities, Instagram and the FTC

by

Picture1Last month, the FTC sent letters to a bunch of celebrities, reportedly chastising them for improper disclosures. Here’s what this means for marketers and influencers creating sponsored content.

First things first. There are no new FTC Guidelines for Advertising Disclosures. Still the same basic rules we’ve been working with for years:

  • Disclose material relationships. If an influencer is compensated, whether cash or in-kind, she has a material relationship with the brand.
  • Clear, conspicuous disclosure in proximity to the endorsement. Unambiguous language. Placed where the consumer will see/hear it when she sees or hears the brand mention, the endorsement.
  • Accurate. The influencer and the advertiser both have an obligation to strive for accuracy and correct errors.

More details in my  FTC Disclosure Guidance deck.

What we did get in April was additional FTC guidance on the disclosures.

FTC guidance typically comes when the agency takes an enforcement action. In this case, it was the 90 letters to various celebrities and celebrity influencers who regularly promote brands using insufficient or unclear disclosures, sent in response to a complaint from watchdog group Public Citizen last Fall.

Generally, FTC guidance focuses on what to NOT do by highlighting practices that it deems insufficient. The FTC does not give an exact blueprint on the right way to disclose a brand relationship. If someone tells you (and I have heard this): “This is the official FTC disclosure,” they do not know what they are talking about. There is no standard, official disclosure. Just guidelines and guidance and the business practices we have developed to comply.

What was in the current guidance? Nothing surprising to those of us that have actually read the guidelines and previous guidance. The only surprising thing was that the agency took the step to reach out to influencers. Typically it focuses on advertiser compliance, for example the Lord & Taylor Instagram dress campaign of March 2015, settled in March 2016.

Here are some of the reasons I think they took the step of addressing influencers directly.

First, letters were sent to celebrities with massive followings. We don’t know exactly who received letters but names in the Public Citizen complaint included David Beckham, Mark Wahlberg, Jenny McCarthy, Chris Pratt and Kendall Jenner. Whether or not celebrities have to disclose has been a source of much confusion, but the test is pretty clear — what will the consumer understand? When the celebrity is in a television or print advertisement, or an athlete is wearing her sponsor’s gear as she performs, the audience has a good understanding of the relationship of the celebrity to the brand. The context tells us. On Instagram, where most of the reported infractions were posted, we have no such context. Everyone is technically, literally technically, the same on Instagram. My posts are viewed by my followers in exactly the same interface as Kim Kardashian West’s view hers. Without disclosure, we don’t know whether the endorsement was sponsored.

Second, the disclosures that folks were using were inadequate. Phrases like “in partnership with” or “my partner,” the hashtag #sp (which has been on record as inadequate for years) and branded hashtags are not sufficient disclosures. Mixing up the disclosure with a bunch of hashtags or putting it at the end of a post where it might not be seen are not sufficient disclosures.

The clearest disclosure on platforms that don’t have character limits is Sponsored Post (or Video or Content), and on platforms that have character limits, #sponsored or #ad. Placed at/near the beginning of the endorsement, especially on posts that truncate on mobile like Instagram. In fact, the FTC was unusually specific when it came to this point, apparently in all the letters:

“…the letters each addressed one point specific to Instagram posts — consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer post unless they click “more,” which many may not do. The staff’s letters informed recipients that when making endorsements on Instagram, they should disclose any material connection above the “more” button.” (from the FTC press release)

Finally, the problem was spreading. Increasingly, brands are turning to influencers instead of traditional agencies.  Especially on Instagram. The longer the FTC let the inadequate disclosures stand, the harder it would be to rein it in. Issuing enforcement letters to celebrities, not just big social influencers, guaranteed a certain amount of media coverage to help the agency get the facts in front of consumers and influencers. In addition to its press release and media outreach, the agency posted the news on both its consumer and BTB blogs.

Bottom line — we are far better off creating amazing content that our audience will love, sponsored and unsponsored alike, than trying to evade the disclosure requirements. Using obscure and inadequate disclosures, especially when there is intent to deceive, betrays the trust of the audience. Don’t do it. It’s not fair to your audience and the FTC is watching.

—

In other disclosure news, Facebook has expanded the availability of its branded content tool. ALL Facebook pages that post sponsored content must post it through the branded content tool, which labels the post as PAID. This ensures that sponsored content is adequately disclosed on Facebook even if the organic disclosure is not strong. The branded content tool is currently only available for PAGES. Apply here; turnaround is about 2 days. You no longer have to be verified, and approval to use the branded content tool does NOT mean you are verified (blue check.)