Tag Archives: Data collection

March 29, 2019 · 10:38 am

You Want Anonymity With That?

It’s Foodie Friday and today we have yet another example of how privacy is dead, this time from the food world. OK, I might be a little paranoid here but I think I can see the future in how McDonald’s sees the future and it scares me. Let me explain and then you can weigh in on my thinking.

What Mickey D has done is buy an Artifical Intelligence company. They intend to use the AI to adjust the menu in the drive-through as you pull up. The thinking is that these adjustments will cause you to buy more. You know – promoting cold drinks on hot days or suggesting items that are faster to prepare if the kitchen is in the weeds to keep food orders flowing. It gets scary when the menu changes as you order, suggesting sides after you order your burger.

Now you may see nothing wrong with this. After all, Amazon does this all the time. So does Netflix, suggesting things to you that you should find of interest based on your past behavior. That’s not scary until McDonald’s installs license plate readers and begins associating your food order with your vehicle. Of course, it’s also possible that they could obtain a listing of every device that was in their drive-through. By the hour. Cross-reference that to available phone directories and automobile registrations and NOW how do you feel?

It’s yet another step down the road to full surveillance capitalism, at least in my paranoid mind. There are benefits, no doubt, to McDonald’s, and I’m sure they will be followed by others (maybe even others buying their systems from McDonald’s AI company). Do you really think there are benefits to us, however? I think trust and privacy are going to become even bigger issues for consumers and regulators over the next 12 months and if you’re not thinking that way, you just might be making a mistake.

What happens when Mickey D sells their frequency of use data to the insurance company who then raises your rates because you eat fast food all the time? Sure, when you roll into The Golden Arches while you’re 250 miles from home, it might be nice that they already know what you’d like, but I’d rather have anonymity. You?

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June 6, 2018 · 11:50 am

Facebook, Sears, and Kodak

When I was a lad several decades ago, many Americans did their shopping at Sears and took their pictures with Kodak film (I can explain “film” to you youngsters if need be). More recently, my kids might have shopped at American Apparel or Claire’s. What all of those formerly huge companies have in common is that they are all nearly dead. The reasons for that range from bad management to dumb financial deals to changing tastes to the digital revolution. In every case, however, I think there is a common thread of a failure to understand their customers in the context of the customers’ changing world.

We have something similar going on in my mind with Facebook. It’s huge and seems invulnerable but one might have said the same thing about Kodak or Sears 50 years ago. First, think about how the world is changing for their customers. Privacy has moved from something that digital folk like me were babbling about many years ago to something that is on everyone’s mind. In an April survey of 1,051 US adult internet users by Janrain, most respondents said they are not in favor of websites or apps using what they learn about them online to target ads. In fact, 70% of them want some very restrictive laws, similar to the E.U.’s GDPR, passed here. I don’t think there is any doubt that a tech backlash is going on and the more consumers and lawmakers find out about the sloppy (at best), invasive, and maybe criminal (at worst) data use by large tech companies, the greater that backlash is going to become.

Facebook’s entire business is built around invading your privacy. Two points from eMarketer:

More people are becoming suspicious of sharing data through third parties. In a March 2018 survey from Raymond James, more than eight in 10 US internet users said they were at least somewhat concerned about how their personal data is being used on Facebook. Similarly, in a Gallup survey of 785 Facebook users in April 2018, 43% said they were very concerned about invasion of privacy. That’s an increase of 30% in 2011.

What has resulted is that people, especially young people, are sharing less content. The entire reason Facebook is valuable for most people is that content that their friends, classmates, and family post. It’s the network effect – that value of the network relates to the number of people on that network.

I’m not shorting Facebook stock today but I’m not so sure that unless they get their privacy house in order that won’t be a bad play down the road. Less content means fewer active users which leads to less revenue. Will they all move to Instagram (a Facebook company)? Maybe, but probably not since that’s not what’s occurring now. As each day brings a new headline involving a bad actor and data, another nail gets pounded into the coffins of companies that don’t respect their customers’ privacy and wishes. Privacy and data use are no longer just food for geek chats. They’re on the front page. How long can Facebook or any company last if they don’t figure this out? Longer than Sears or Kodak?

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April 18, 2018 · 12:11 pm

Flying Blind

I almost called this post “Nobody Knows Anything” but that might have been overkill. I’ll say what I have to say and let you be the judge. Let’s say that you buy a friend’s newborn a gift. You have it shipped to your house. The data says, correctly, that you bought an infant gift. That might also lead to an inferred piece of data that places your household into the “presence of infant” bin, leading to you seeing lots of ads for diapers. If you’re the one placing the ads for those diapers, you’re wasting money.

Lots of the data marketers routinely use is of that sort. It’s inferred. You can see that some thinking at work if you’re a Netflix user: the recommendation engine infers what you might like based on your past viewing. Of course, if your kids or someone else in the house watch something in which you have no interest, the accuracy of those recommendations is diminished (which is part of why there are separate profiles available when you log in). Inaccurate data is, sadly, more the norm than an aberration. Since this data is really what’s behind personalization and targeting, that inaccuracy is a big problem. Any business that buys data from third parties – and an awful lot do so – may be putting garbage into their system. Unfortunately, most don’t know that because there is little transparency in the data business and it’s impossible to verify what’s good and what’s not.

What should you do? Invest in collecting your own, first-person data. You can also demand transparency in any other data you use (good luck with that) with respect to how it was gathered and what it really represents. Is it inferred or does it come directly from consumers (did someone tell you they had a baby in the house or did you guess they did because they bought one infant item?). Who owns the data and was it gathered with the consumer’s permission?

When Facebook tells its customers (marketers) that they have data on 41 million adults aged 18-49 in the US and there are only 31 million of those adults living in the US, you know much of the data is inferred and also that we have a problem. A recent study that found that 70% of marketers believe that the customer data their organizations are using for marketing is low quality or inconsistent. Why bother to market at all when you’re just flying blind?

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