Month: December 2015

Advertising in today’s world has been pretty much accepted by most Internet users. A useful rule of thumb is that if a website is not selling you anything, then you are the product. After all, many websites exist with a profit motive. However, advertising has also spawned a cottage industry in tracking users effectively on both online and offline mediums, and this has caused much concern to other people. The end goal of such tracking is to persuade and influence people to buy more of their products by analyzing their shopping habits. In this short paper, I provide a brief overview on the modes of online advertising and how they attempt to influence people to buy more of what they are peddling.

Social Media Tracking

It is indubitable that Facebook and Twitter have become ubiquitous. They also contain a treasure trove of personal data. Previously, search engines like Google had to infer the age, gender and demographics of a user based on the websites he or she visits. With Facebook, people willingly provide that info when they complete their profile or like pages and links. While there is much advice to fill up your profile with fake personal info, most do not take heed of that because Facebook is ostensibly more useful when you provide real information. After all, who would want other people to wish you happy birthday on your fake birthday? Hence, it is easier for companies like Facebook to target you with more relevant ads. Are you a 21 year old female college student? Perhaps ads for a sale for clothes could be shown. What about an unemployed 40 year old man? Ads purporting get-rich-quick schemes can be displayed. In itself, this might not be a bad thing. However, there should be some concern that such a considerable amount of personal information is concentrated in the hands of a few companies.

In one such case, Facebook intended to partner with other websites to share activities of users on external websites directly on Facebook’s news feed. This service, called Beacon, created an uproar because it did not allow users to opt out of the feature. For example, if one bought a book called Coping with Cancer on Amazon, one’s purchase will show up on other people’s news feeds as “Your friend XXX bought a book “Coping with Cancer” on Amazon. Click here to check it out”. Facebook’s intentions were clear – from persuasion theory, social proof is one way of influencing people to take action on partner websites. Simply put, people are more likely to buy something if their friends bought it. However, they implemented it in a way that third parties were privy to personal information on the Facebook platform. As can be seen, such data sharing among different websites can lead to privacy leaks and unwanted information disclosure.

More worryingly, there are companies such as Lookery that attempts to segment users into various demographics based on their website visits over participating websites. In fact, I used Lookery a few years ago and they paid $0.10 per 1000 visitors, which while seemingly very little, is quite substantial considering they place no ads on your website – only an invisible JavaScript beacon tag is placed. Although they promised that no personally identifiable information is stored and transmitted, prior incidents like the AOL search data leak leaves much doubt. In that particular case, AOL released detailed search logs to many users for research purposes. Although AOL did not specifically disclose which user queried what terms, it was possible to identify users based on their search terms. In many cases, specific individuals were even identified. It is of concern that such advertising beacons, while in itself is anonymized, can be cross-referenced with data from other providers to provide enough information to identify users. Therefore, online advertising can be used to identify users, which is an ethical problem in the broader schemes of persuasion.

The Rise of Data Brokers

The traditional role of data brokers was to provide firms with a way to get demographic data, or verify personal information in that firm’s database. For example, in the case of fraud prevention in an online shopping portal, firms can cross-reference a potential customer’s email to their shipping address. How it works is that the firm provides a one-way hash of their customer’s email and address and provides it to the data broker, and the latter returns a result indicating if they have an exact match. Either parties do not have access to the email or physical address that is being queried, since a one-way hash is being passed, with the hashing algorithm known only to those two parties at that point in time. However, some people are still spooked by the fact that personal data, even though encrypted, is still being passed around different companies in the normal course of business. With so many parties involved in a transaction, there are more points of failures in a privacy leak.

The more contemporary role of data brokers now involve bridging real-world and online actions to a person. For example, if Coca-Cola launches an online advertising campaign on Facebook, measuring its effectiveness would be hard without data brokers. These companies, via deals with multiple retailers, get transactional data of specific products in purchases made in-store, aggregate them and present them to clients to gauge advertising effectiveness. It can also work in the opposite way as well – Walmart might want to track and compare the shopping habits of those in-store vis-à-vis those online. In this case, the “bridge” is your loyalty card – if you use your card at a brick and mortar store, then enter it online to enjoy a discount, then retailers will know that the online persona is the person registered in your membership card. Data brokers can then help Walmart market products that you are more likely to buy on not just Walmart, but on other websites as well. At this point, your online identity can be associated with a physical one. An example of such a company is Datalogix, which tracks more than $1 trillion in consumer spending across more than 1400 retailers. This data is then passed to data cooperatives which act as a central clearinghouse for personal information across multiple companies, online and offline so that they can be homogenized into a machine readable format, to be resold to other advertising agencies.

As some critics rightly point out, data brokers have operated even before the Internet matured, perhaps even more unscrupulously. If you have written down your details to take part in a sweepstakes or lottery, you have effectively signed away your personal information to a company which purportedly helps facilitate the lottery. In fact, data brokers back then were subject to little regulation. Paid services existed which allow you to get someone’s address from their phone number, and vice versa, for telemarketing purposes. The modern form is encapsulated in the company Towerdata which prides itself on finding a person’s social media accounts and physical addresses based on their email addresses. Additionally, this service called Email Intelligence allows interested parties to buy “demographic, interest and purchase data for more effective list segmentation and personalization”. As can be seen, such exchange of personal information is not new, but due to increased frequency of data leaks, people are more concerned now than in the past.

Conclusion

In sum, online advertising can be seen to infringe on users’ privacies, all for the ends of getting people to buy more of their products. This has very much to do with the ethics discussion we had this week. Previously, advertising was pretty much a benign medium – you search ads with a particular keyword, and was shown ads with those keywords. Now, advertising has gotten so far to the point that Walmart and Target are able to know whether you are pregnant, even before you actually conceive – all based on big data analysis of your online habits derived from a variety of online and offline sources.

What a world we live in.

Discussion

Here’s an interesting discussion question that allows you to think about the future of advertising.

1. Do you think privacy and advertising can ever be segregated? That is, can effective advertising happen without breaching users’ privacies? Do such advertising firms exist now?

Abstract

The United Breaks Guitars case study shows that social media cannot be overlooked in a company’s customer service operations. Dissatisfaction with the company can propagate like wildfire over the Internet. In the short discussion piece that follows, this author attempts to show the significance of social media in public relations, as well as suggesting how United could have done better amidst this negative publicity.

Introduction

It is indubitable that social media has changed the public relations playbook for many companies. Previously, before the user-generated content Golden Age that Web 2.0 brought about, people who felt aggrieved had little recourse against the company. Now, people are able to tweet their frustrations, write a rant on the company’s Facebook page, or in this case, make a music video. In all cases, the actions taken by them are highly visible. Contrast this to a private email complaint to the company – the latter is definitely less visible and subject to less public scrutiny. In addition to increased visibility, the complaints are also able to be propagated much more quickly. Case in point – when someone uploaded a video of a FedEx delivery person throwing his fragile packages into the porch, that video was shared thousands of times over various social media platforms. Taken together, social media is a potent force to be reckoned with in a company’s public relations playbook – one that requires a different strategy than the one of yore to counteract.

For ease of discussion, I will segment my analysis of the case to distinct time periods in the life cycle of a public relations incident – pre-incident, during incident and post-incident. This allows the reader to gain a perspective on what a company should do in a situation like United Airlines was in.

Calm before the Storm

Since social media is such a powerful voice online, the attention given to it should be commensurate to its influence. In the case of United, we see that there were glaring ineffective use of social media. In July 2009, United Airlines used Twitter to only disseminate promotional messages and flight disruptions to its followers. While some followers might like the fare deals posted on its feed, United could have taken a more proactive approach on social media.  A cursory glance shows that tweets that mention a company on Twitter are usually negative. For United, this would mean complaints about delays, rude ticket agents, inept efficiency and its ilk. There was no such effort on United’s part to address these complaints. Today, the situation on the ground (pun intended) has improved drastically with United actively responding to customers’ complaints on Twitter, inviting them to message them so that they can investigate further. In one instance, someone reported an issue with the gate number on their e-ticket. United replied telling them to message them so they can ask the Mobile Apps team to rectify this. This is a step in the right direction. Moreover, most of the replies to complaints took less than an hour (minutes in fact), which is commendable. In a time-sensitive business like flights, customers expect their concerns to be addressed swiftly [1]. Customers use social media to air their complaints because it is easy and fast to do so; likewise, they expect a response to come quickly too. As can be seen, United Airlines used social media ineffectively previously.

Next, it would seem like United did not have dedicated personnel for their social media presence. From the paper, “United employees were encouraged to monitor social media for mentions of United Airlines”. Crowdsourcing was a good step by United so that each staff member has a stake in addressing issues concerning the company. This was instrumental (pun unintended) in the early spotting of Carroll’s video, and the subsequent reach out to him by the managing director of customers solutions at United. Without this policy in place, the video could have been seen only after all the mainstream media outlets have reported  on it, which could be even more disastrous. Whilst such crowdsourcing is a not a replacement for full time social media service staff, companies that opt for this route can improve on this further by providing incentives for staff to report customer incidents which are left unaddressed to the main customer service team. All in all, companies will do well to have dedicated customer service agents to address social media issues.

The Aftermath

Of course, the United debacle would not have happened had the United agent approved his claim in the first place. In this part, we take a look at how United handled the social media firestorm. Firstly, United was vague in their Twitter reply to Carroll. While this might be an off-the-cuff reply, there were no subsequent follow up on what exactly they did to “make it right”.  It was not until after they have reached out to him did they detail their poor response to his claims. Notice how Rob Bradford reached out to him. He is the managing director of customer solutions at United. What United should have done was to get the CEO of United to reach out to him instead. Since his complaints had been seen by millions of people, the CEO should have apologized, not anyone down the corporate ladder. This shows that United is not serious about the matter. Also, it would seem that United had taken to more actively tweeting to tell people their solutions. Perhaps a better approach would be to embrace traditional media and online news sites by writing a press release.  They could also have placed a statement on their corporate website or via a shareholders’ meeting. Thirdly, the response by United was weak because they did not address any punitive actions that United would take should such an incident happen again. They only promised to use that in training materials, but failed to communicate to its customers how its customer service would be overhauled. For example, one can take a look at how Amazon does customer service. While there are customer agents at every step of the way, one can email the head of Amazon Jeff Bezos directly at his personal email – jeff@amazon.com. [2] This shows sincerity in reacting to complaints. United could follow in Amazon’s footsteps if they really want to go all the way in this respect. A highly-reactive from-the-grounds-up approach would be to fire employees who lack customer service discretion. However, this has the knock-on effect of decreasing employee satisfaction so the pros and cons definitely needs to be weighed. Hence, one can see that United not only exhibited a weak response during the incident, it also failed to show its customers its sincerity in improving its services after the fact. Sometimes, from the customer’s’ point of view, education of frontline employees is not enough, they want to see a hardline stance on egregious actions by employees.

Conclusion

In conclusion, United’s social media action plan seemed to have improved since the article was written. The key points to take away from this is that companies should use social media to not only produce content, but also consume feedback from its social media followers. Also, they need to address such feedback promptly, with dedicated personnel to handle such matters, rather than delegating it to everyone. If a public relations disaster would occur online, companies should get their top guy to address the issue personally, especially after it has blown up to such proportion. In communicating to the public, companies should demonstrate sincerity in changing their practices by thinking from the customer’s perspective. The best solutions are always to involve the customer experience personally – for example, the ability for customers to contact the CEO directly. Strategies like educating customer service employees are likely to be seen as impersonal since customers are not really privy to any improvements behind the scenes.

References

1. http://www.convinceandconvert.com/social-media-research/42-percent-of-consumers-complaining-in-social-media-expect-60-minute-response-time/
2. http://gizmodo.com/jeff-bezos-if-you-have-a-problem-with-amazon-email-me-1724561248