Over the past few years, marketing has experienced a shift. As businesses moved into digital channels, and with the emergence of social media platforms, they were given the opportunity to communicate with customers on an individual level. Although personalized marketing has allowed businesses to understand their customers individually, how ethical is it for businesses to use affinity data to learn more about their consumers?
Momentum always follows money and motivation. In 2017, over $15B had been invested in AI-focused startups. As of this year, that amount has been surpassed and is forecasted to be over $58B by 2021. Industry analysts believe AI-enabled businesses will create over $2.1T worth of business value and generate over 2.3M new jobs while eliminating 1.8M existing jobs. Technology has always been the core of our economic growth, where disruption and business value are constantly created and recreated in a virtuous cycle.
Creating business value is defined by new revenue, new markets, new customer experiences, and cost reductions. Although the needs of the consumer are the main focus, their personal values seem to fade into the back as companies digitally transform. How do we unlock business value that also serves the beliefs of the greater good? Creating this balance can be challenging.
AI-enabled experience economies, for example, face this challenge. However, these technologies come with self-learning techniques, so they are able to seamlessly gather and sift through information on individuals and their interests. Although this data provides businesses with the ability to understand and persuade consumers on a personal level, without human judgment and intervention things can go awry. We will need a moral and ethical playbook for the practice of personalization.
Data is our frenemy. It’s our fuel. It’s also the basis of the Information Age.
Consider Facebook, Google, and WhatsApp’s business models. We don’t value them simply because they’re free. We value them because they adapt to our needs and values. These platforms allow us to connect with our external environment by adapting to our behaviors, and subsequently suggesting where we should go, who we should meet, and what we should do all day, every day.. It is free because businesses realize, in the long run, that having and subsequently monetizing your data is much more valuable than having you pay for their services.
Although these platforms make daily life easier, we are collectively subsidizing our personal data for access to free browsers, searches, ratings, and reviews. Digital social platforms, in some cases, have been able to manipulate this data to influence our way of thinking and being instead of serving us what we have consented to. This helps businesses understand your values and provide you with items that may be of high value to you. Data, in that sense, helps businesses and users cut through the digital noise, and provides us with an experience that feels more gratifying and focused. Instead of having to enter our information constantly, or searching for related items, we are given recommendations that are just a click away.
Well, Data is still your frenemy. But, so is Personalization.
So that begs a few questions: Where are our ethical boundaries in our data usage? What are the gray areas? Who gets to store, share, secure, and govern our data? Who decides? It is our responsibility to be vigilant and to remain aware of how and where our data is being used.
Ethics isn’t a pile of red tape that we have to maneuver around in order to forge connections. Ethics is the system upon which our businesses and technological systems should be designed-in.
In the conquest for privacy, personalization takes a hit.
In the quest for personalization, individual freedoms take a hit.
So what does ethical marketing look like? That will be the focus of our series on ethical marketing and personalization. Why? Because it’s personal.