Alex Aristidou explores the new age of personalized marketing that comes from internet usage.
Are you interested in going on holiday to Barcelona? You don’t need to respond because you have already given an answer. Don’t you remember? Even though you just started thinking about it, probably without specific dates or how many friends you want to bring with you, the internet knows everything already. Some may call it magic, but it’s nothing like that!
Footprints on the OCEAN
We are now faced with the OCEAN, not one covered by salt water, but full of data, full of us. An OCEAN profile is designed by organizations based on the psychographics of individuals. OCEAN stands for:
- Openness to experience
A measurement of innovation or curiosity of an individual
The inclination to show self-discipline, ambition and organization
An individual characterized by positive emotions and constantly seeking the company of others
The tendency to be compassionate and cooperative
A sensitive individual, demonstrating unpleasant emotions with signs of anger, anxiety or vulnerability
Predators of the Ocean
Companies in possession of these data will sell our secrets to the highest bidder who will then go on to utilize this information, optimally allocate their marketing tools and resources to the appropriate OCEAN user. ‘Blanket Advertising is now dead’, are the words of Alexander Nix, CEO of Cambridge Analytica, a data-analysis company. He argues that the era of mass advertising, when billboards and TV advertisement could target large audiences will slowly vanish. He points out that messages that target people upon their demographics just does not make sense. Personalized marketing and advertising will be the ultimate tool of effective campaigning in the digital and real world. Companies are currently integrating these methods into their marketing strategies. For example, Ford hired 125 new employees who specialize in the research and analysis of data, and Walmart bought a predictive data-analytics company. The latest CBI/PWC survey suggests that two thirds of all British Financial Services firms are expected to heavily invest in data-analysis such as customer history and risk profiling in the next year.
Consider the 2016 United States presidential campaign, while the presidential polls indicated Hillary Clinton as the definite winner, Donald Trump argued otherwise. Specifically, a day before the elections, CNN predicted that Hillary Clinton, with 332 electoral votes against 206 for Donald Trump and with 91% of public confidence, would become the next President of the United States. However, 24 hours later, results were announced showing a victory for Trump with 306 electoral votes against 232 of Hillary’s. Where did all the experts and polls go wrong? Some say that people were desperate for change, while others say that voters were badly influenced. Both statements are normative, but we can only be sure about one thing: Trump’s campaign closely worked with Cambridge Analytica. They profiled every single voter in the United States, they knew exactly what people demanded, and they offered exactly that. Statistics show that Trump lost the public vote, but as he said, he couldn’t care less. Due to statistical analysis, Trump’s Campaign knew exactly where and on whom they should focus their campaigning efforts. Take for example the state of Wisconsin, which is considered highly democratic. The last time the state voted for a Republican candidate was in 1984. What happened? Hillary Clinton didn’t even run a single rally in Wisconsin. Due to data-analysis, Cambridge Analytica found many suggestible voters. As a result, Trump’s campaign ran 5 rallies and won over around 70,000 voters. It is no surprise that Trump won Wisconsin with a margin of 27,257 votes. While a variety of reasons can influence the results, it is undeniable that analyzing data and acting on the results massively boosted Trump’s chances of winning.
OCEAN profiles provide organizations information on what we want to hear. No wonder Google ‘magically’ advertises Barcelona hotels and restaurants on your computer screen. Through personalized and targeted marketing, resources are being utilized more efficiently and achieving a closer point to the optimal allocation of resources on our Production Possibility Frontier. This has a greater positive impact on our society, tackling the fundamental economic problem of scarcity. Furthermore, we can clearly see the macroeconomic effects. As we can now profile users, we learn more about them, and predictions about what is going to happen in the future can be evaluated more accurately. ‘In order to do good economics, you have to keep in mind that people are human’, were the words of the recent Nobel Laureate in Economics, Richard Thaler.
As Eduardo Porter suggested in his book The Price of Everything, behind every decision there lies a cost. The time when you felt safe and comfortable enjoying music on YouTube or reading an online magazine is a matter of past. Your footprints are there for everyone to see and exploit, easily purchased and given without your consent. Every time we use the internet, we are faced with a cost-benefit analysis. Costs, as we now know, are not limited to the explicit costs of paying our provider but the implicit costs of our personal data exist as well. What is left unclear is, how much do you value the benefits of internet use?
The internet is part of our life and soon, it might be our whole life. It is crazy to think that we can totally exclude it from our daily routine and avoid totally giving out our footprints. Going back to the roots of humanity, we should all follow the advice of the Ancient Greek philosophers, who famously used to say ‘Πάν μέτρον Αριστον’. Its meaning is simple: everything in moderation.