Big Data In Marketing
Big data is a relatively new term that has entered the lexicon for its prevalence in respect to predominantly tech companies. The data referenced is consumer data, data on things like purchasing habits, psychographics, demographics, time spent on web pages, clicks per page, the list goes on. Every piece of theoretically anonymous data is bought and sold, in order to improve sales techniques used to better-targeted marketing. This has created a massive data economy, approximately $3 trillion a year, in which the U.S. Alone benefits by $1.2 trillion. There has been an argument that this data is an invasion of privacy and should not be legal, this has been contracted by large companies like Facebook claiming that consumers consented to their data being gathered. Others like Apple CEO Tim Cook have argued that “privacy is a fundamental human right." Nevertheless, consumers and lawmakers alike have claimed that even with consent people are not sure what they are consenting to. This leads to the question, should this data collection be legal, and if so to what extent?
There have been arguments made that “Big Data” is, in fact, a good thing and improves day to day life for all people. For example, Erik Brynjolfsson of MIT found that companies that adopt data-driven decision making achieve 5-6 percent higher productivity and output growth than their peers. Furthermore, the Omidyar Network has recently found that data collection has potentially increased the overall income within the G20 by up to $950 billion. The benefits cited also include better workplace conditions, increased energy efficiency, and improved foreign trade. The concern of big data is not for internal affairs of companies but of consumer data in advertising, this is where the real financial benefits are. The United States currently has around 500,000 big data jobs, these jobs mainly involve finding ways to improve marketing in order to sell products or services to consumers, creating a market that evidently does not improve GDP. From an economic standpoint, this is, in fact, beneficial, however, it is at the expense of consumer privacy.
As it stands, there are no generalized data protection laws in the United States at the Federal level. Instead, there are a number of sector-specific laws in place. For example the Driver's Privacy Protection Act,1994 that protects driver information collected by the DMV. Another example is the Children's Online Privacy Protection Act, that requires parental consent before any data is gathered of any persons under the age of 13. There are a number of others that are very specific, and though necessary, are frankly a bit obvious. These include protection of the sale and release of the private video, protection of Social Security Numbers, and driver identification numbers. Some states like New York, and Massachusetts have adopted stricter regulations that prohibit certain financial institutes from operating in the States without meeting a minimum standard of data protection. California is taking it a step further with the new “California Consumer Privacy Act” that came into effect on January 1st, 2020. This act will require all businesses to disclose all sectors of data being gathered as well as disclosing if the information gathered is for commercial purposes (Data Protection 2019: Laws and Regulations: USA: ICLG).
The biggest and most concerning example of data collection is Facebook, Cambridge Analytica. The case was that Facebook improperly shared the personal data of as many as 87 million users. The information shared extended to information such as phone numbers and email addresses of users to marketers, a feature that has since been disabled (Wells, Georgia, and John D. McKinnon). Facebook was also found to be paying teens $20 a month for all of their personal data on the site. This issue was made worse when considering a great number of these individuals under the age of 13. Facebook claimed that they were given parental consent, this consent being just clicking a box that claimed parental consent. Information gathered included things like personal messages, believed to be the reason why Facebook obtained Whatsapp in 2014 (Tiffany, Kaitlyn). This so-called consent may not truly consent when you consider people who do not understand what they are giving up, oftentimes agreeing to legal obligations within the terms and agreements. It has been found that over 90% of people accept the terms and agreements without even reading them, this number is far higher between consumers ages 18-34 where 97% do not read the agreements (Cakebread, Caroline). These terms and agreements are required for use of many websites, so consumers are essentially trapped, do I give away my data, or do I not get to use things like Facebook, Instagram, or even a number of products.
It has been found that products like smart speakers, games connected to wifi, and wifi powered toys, all collect data. In your own home, you may have smart speakers listening to conversations, nest cameras looking at your day to day habits, and purchasing preferences collected by Google and Amazon. It is so sophisticated that pregnant women will often be known to be pregnant by companies like Amazon through their purchases to the extent that they will receive ads for things like baby clothes, and toys, most famously with the Target case. Much of this information is unfortunately voluntarily disclosed through posts on social media. For instance, date of birth, maiden names, work addresses, virtually anything posted online. This is not only a Big Data concern but is also a concern when considering the disclosure of information used in things like security questions.
It is shocking the amount of data we give up on a daily basis, sometimes it can be difficult to comprehend it. It is clear that your data is extremely valuable and companies will pay top dollar for it. The argument can be made that this data may be used for good. Creating better products to fit our needs, informing us about things that are relevant to our lives, helping us become more informed consumers. Though this may be true, at a certain point the question needs to be asked, its this a violation of my privacy?