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January 29, 2015 | features

remember the first time I got creeped out by personalised advertising. It was also the moment I realised I wasn’t anonymous on the net. 

I’d moved to Melbourne after studying and admittedly hadn’t been paying my student loan. After about a year I started getting bombarded by ads from IRD on my Facebook feed. “How to pay your student loan from Australia,” it said, “We know where you are and what you’re trying to do.” 

If this was a retailer trying to be my friend, this wouldn’t be the way to go about it, but the IRD didn’t want to be friends. It didn’t want me to like it and share it and review it on Facebook. It wanted the $24,000 I owed. 

Legally, it is no invasion of privacy for marketers to track consumers online and then show them what they deduce they want to see, but the delivery is important.

So with more and more technology being available to target people on a very relevant and personal level, what do marketers need to know?

New futures

While we all know ads can currently follow customers around on the internet, soon they’ll be able to follow people around in real life, says .99 and JustOne managing director Ben Goodale. Steven Spielberg’s Minority Report famously predicted it back in 2002 and Goodale says we’re soon going to see retailers who know a customer’s shopping habits, sizes and are able to recognise them when they walk into a store. “And they will be able to deliver you offers that are totally based on what you buy.” 

While email has been the most-used method for delivering offers in recent history, smartphones, wearable technology and other digital screens could be next—and it will likely be in real time, based on your location.

“In a few years time we’ll be looking back and laughing at Google Glass, if we’re not already. It looks silly, but it’s not more silly than the brick-like mobile phones that people like me were running around with in 1990 and now get made fun of in retrospectives,” Goodale laughs. In three to four years he believe Google Glass will be an invisible thing living, for instance, in a contact lens.

“It will be delivering information to you, but also delivering information into retailers who you’ve decided you want to have a relationship with as you walk in and out of shops.”

How rapidly this happens in New Zealand depends on cost and awareness, with thinking inevitably moving faster than infrastructure and technology systems are implemented, Goodale says.

“What’s going to happen first is we’ll see more and more articles coming out of the UK and the States about it, and people hearing more about it, and then people will actually start doing it. And some people will do it well, some people won’t do it well, and then it will just become very normal very quick I think.” 

“Creepy ads normally talk about me as the recipient of the ad instead of telling me about their products in a way that is personalised.” Helen Crossley, Facebook

Pocket personalisation

Being hooked in to a customer’s mobile is really the new requirement for personalising marketing messages. Whether it’s photos, apps, contacts, messages or music, smartphones are the ultimate example of mass personalisation: a standard shell taking on a unique personality.

Music streaming company Pandora has the subscriber base and means to get serious with personalised messages on mobile. Pandora recently moved into the number one position in the United States for time spent on mobile, with people listening to 2.5 hours per day of music on average, Pandora New Zealand commercial director Melanie Reece says (Kiwis right now in New Zealand are listening to 20 hours per month on average). And with the second largest logged-in database in the world behind Facebook, Pandora is well placed to offer ads that go to lots of people, across lots of hours. 

Examples include brand-sponsored channels, a campaign for the Green Party that saw people getting messages when they thumbed a song up or down (‘Like Maui dolphins? Vote Green’), and pop-ups that allowed users to download TradeMe’s property app direct.

Currently the service only uses its own data from user registration details and listening habits, but its parent company in the US uses third party measurements (Comscore and Triton) to further personalise ads, and it plans to do the same here (it's even personalised its own advertising, giving very intimate concerts to users who thumb-up artists). 

“For the next year or so we will work with advertisers with our own data, but when we are really starting to get to scale either in the next 12 to 18 months I think advertisers will want third party measurements, and then that opens up the opportunity for even more segmented targeting,” Reece says.

Make it for me

In the business world, there’s growth in personalisation. And consumers will pay a premium for bespoke. 

You can now create your own personalised muesli online, design your own wallpaper by the square metre, create your own shoe with Nike iD, or put your own face on a Hobbit stamp from New Zealand Post to send out to friends and family. Fast-food companies like Domino’s offer ordering by app and McDonald’s, which is struggling to appeal to the millennial market, is also looking at bespoke items [it is set to launch a Create-Your-Taste trial in Auckland, just the third market to do so]. And the nascent realm of 3D printing opens up even more possibilities

The Coca-Cola ‘Share a Coke’ campaign that swapped out the Coke brand name of bottles and cans and replaced it with the 150 most popular names in Australia has gone global. The Coca-Cola brand executive who worked on the original campaign, Lucie Austin, describes our names as being the most personal thing we have. “It’s our fingerprint … our identity… in one word,” she says. “The fact that your name is on a Coke bottle, it can’t get more personal than that! The campaign capitalised on the global trend of self-expression and sharing, but in an emotional way.” 

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In the mood for targeting?

Reece says the next thing for the music-streaming giant is to target listeners via mood. “We’ve got several advertisers really interested in serving messages around happy songs and mood-based marketing,” she says. “… You can imagine people thumbing up songs and we can do things like, ‘Like this song, love our ice cream,’ … the ad market has really responded to it,” Reece says.

Consumers are used to advertisers trying to play to our emotions within their ads. But do we trust corporations who are trying to sell us stuff when we’re high on Beyonce’s greatest hits? What if an antidepressant company targeted a playlist of break up songs, or Creed’s new album. Would that be okay?

The face of targeting

Facebook is a central presence in personalised marketing. Anyone on Facebook is now used to the idea that ads they see on the platform are relevant to them, even becoming confused or annoyed when an ad is not about them.

“In fact if you speak to younger generations who have grown up with their own highly personal smartphones we see that this expectation is even higher,” Facebook head of measurement and insights Helen Crossley says.

Crossley says one of Facebook’s main product goals is to make ads more relevant, and it’s doing this by building out services that help marketers find customers similar to their current ones, and investing heavily in advertising tech throughout 2015.

“2013 was the first year the average American adult spent more time on digital media than watching TV, and that gap has continued to increase,” Crossley says.

Today the average adult in the United States spends nearly 25 percent of their media time on mobile, but advertisers spend only approximately 11 percent of their budgets there. While plenty of advertisers have been targeting away happily, those targets have been a little hazy. Crossley says Nielsen OCR data shows the digital industry is less than 60 percent accurate in demographic targeting of ads, and that many of the most commonly used measurement systems over-emphasise the value of the last click.

“This does not make sense given that studies of Facebook campaigns show that over 90 percent of ad-driven, in-store sales come from people who saw an ad but didn’t click on it,” she says.

All that is going to change, she says.  

Facebook relaunched Atlas this September, the new and improved technology that allows it to track across devices and use Facebook data rather than cookies to provide what they call “people-based” marketing.

“Cookie-based approaches make assumptions to figure out demographic information. For example, because you went to a car site there is a high likelihood you are male. Facebook’s approach is different in that people let us know that they are male or female or in fact any one of dozens of other gender options we provide, such as transsexual,” Crossley says.

Google, one of the other giants in data collection and relevant ad placement, is also constantly refining its product to keep up with the competition. It mastered the art of matching buyers with sellers by indexing information and then letting advertisers bid to show their ads on relevant searches. Google knows what you’re searching for; it knows what you’re emailing about in Gmail; it knows what you’re watching on YouTube; and it knows where you are on Google Maps. It’s an amazing company. But, over the past few years, the search engine has become so big that Germany and Spain have come together to try and bring down its digital monopoly in Europe (no one from Google was available to talk for this story).

Feeling queasy

In 2012, the accurately named US department store Target was in the media as its new statistician, Andrew Pole, revealed to New York Times journalist Charles Duhigg how the company was targeting expectant mothers, down to the due date, through intricate data analysis of purchase habits.

But after a case where Target knew of a young woman’s pregnancy before her father did, and started sending masses of personalised coupons for baby-products to her address, and other women started to get creeped-out, the company had to back off.

“If we send someone a catalogue and say, ‘Congratulations on your first child!’ and they’ve never told us they’re pregnant, that’s going to make some people uncomfortable,” Pole told Duhigg. “We are very conservative about compliance with all privacy laws. But even if you’re following the law, you can do things where people get queasy.” After the incident, Target toned it down and instead starting sending discreet pregnancy coupons hidden amongst lawnmower offers.

There is a difference between being relevant and being creepy, Facebook’s Helen Crossley sagely says, and the difference is in the delivery.

“Creepy ads normally talk about me as the recipient of the ad instead of telling me about their products in a way that is personalised.” 

Facebook famously got in trouble for messing with users’ moods without their consent in a 2012 study that altered the types of posts some people saw to see if people were affected by seeing either happier than average or sadder than average content. And they were. Facebook learnt that people were more likely to post negative messages if they were exposed to more negative messages on the social network.

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Call me loyal 

Supermarket chain Countdown is one company that has led the way in using data to offer personalised offers through its loyalty programme Onecard.

Early this year Countdown worked with data-driven marketing company Affinity ID to leverage the data they amassed from their 1.8 million Onecard holders over the years.

According to Affinity ID, the new programme serves those 1.8 million customers a unique selection of products each week, based on what they’ve bought before, from over 5,000 possible specials on offer on any given week.

“We used Countdown’s Onecard purchase data to understand the products customers are looking for, determine the selection of products they see in their unique email and personalised webpage and drive cross-sale opportunities.”

According to Affinity ID, the supermarket chain saw a 19 percent increase in weekly spend for customers on the programme, and a five percent increase in email open rates compared to the previous email programme. 

Countdown now sends weekly, personalised emails to customers on the Countdown database, which include offers to products they might be interested in, processed in real-time. And more clients are moving in that direction. 

“We’re seeing more budgets shift, effectively from more broadcast type media in terms of the mix marketers are playing with, towards more direct communications and ways to drive data to get better outcomes,” says Affinity ID chief executive officer Nigel Tutt.

FCB performance manager Anna Matthews agrees the split between big brand awareness campaigns and the known audience activity is going to swing.

“So for your big brand [campaign] you’ll probably be looking at 30 percent and your known audience around 70 percent.”

But there will still be a place for the big splash, or ‘spray and pray’ techniques, she says.

She thinks as time goes on targeted advertising will be more and more automated, as we move in to the programmatic era whereby advertisers can set up rules for targeting online and leave a programme to run through decision-engines rather than people.

“In the future that performance layer will be always on, there will always be some message and marketing going to different segments, and whatever the success metric is will be defining whether that segment continues to be talked to with that message,” she explains.

“In the future that performance layer will be always on, there will always be some message and marketing going to different segments, and whatever the success metric is will be defining whether that segment continues to be talked to with that message.” Anna Matthews, FCB. 

Mystery shoppers

The Privacy Commission has been running some workshops recently about privacy and the future of technology, and a spokesperson says the general feeling in these workshops was that “the average Kiwi isn’t aware” of the amount of data marketers are collecting to target ads. 

“We’re providing New Zealanders more knowledge about how their personal information is used is a very good thing, the spokesman says. Notification is the key privacy consideration when it comes to the use of data for marketing in New Zealand.

“If you’re using people’s data for personalised ads, you’ve got to make sure they know about it. Having an easy mechanism for people to find out why they were served a particular ad and where the data came from is a good start,” he says.

In 2015 Facebook will launch a service in New Zealand called Ad Preferences, which allows people to have more control over the ads they see on Facebook. Google also offers customisation and allows users to opt-out of internet-based ads. 

“Ad preferences explains why you are seeing a specific ad … You can click on any Facebook ad to see why you’re seeing it, including the kinds of targeting criteria an advertiser used to reach you. You can view your ad interests, add and remove preferences so you see better, more relevant ads on Facebook,” Crossley says.

The New Zealand Marketing Association has also set up a Data Warranty Register, which certifies companies as data-trustworthy for the public. But marketers still have to keep in mind what is going to fly with a potential customer. 

The value exchange

“There are lines you need to develop there in terms of what is decent and not too Big Brother-like,” Affinity ID’s Nigel Tutt says. “If you can use increased personalisation to enhance the consumer’s life then great, they’ll love it, but if you come across as creepy or you don’t target that well then I guess that’s the other side to it.”

Good taste and good ideas can go a long way to helping the friendly exchange along, although Tutt admits finding the balance between good behaviour and providing clients an ultra-personalised service is “undoubtedly” tricky.

“It’s very much a case-by-case kind of thing. Good creative really helps that as well, creative that’s really, really tailored to relevancy-based personalised communications.”

FCB’s Anna Matthews agrees that the balance comes back to the “data value exchange”.

“If people know they have given you their name and are participating within the programme then in our experience they do very much enjoy seeing personalised communications and seeing their name and everything that comes with that.”

But where people don’t remember giving you their details, that’s when the marketing message is going to come across as creepy. 

“You’ve got to ask, ‘Why am I putting this content in front of this person – why should they spend five minutes of their life watching it or responding to it, what am I giving them back?’ And I think that’s something that brands are challenged with at the moment,” Matthews says.

On the one hand, customers love seeing things that relate to them. On the other, they aren’t entirely comfortable yet with people using their data when they don’t explicitly remember giving it out. 

When asked whether he thinks consumers are demanding personalisation now, Goodale hesitates before giving a response.

“I don’t think anyone’s going to stand up in Parliament and demand it, but I think there is a very high level of acceptance around it, and also we know from our own testing when we do it, it works better.”

And the reality is, if marketers aren’t getting personal— tastefully—they’re going to be left behind.

“Because we’re going to see a push on personalisation. If people don’t adopt it they will be differentiated by the fact they’re not doing it. In a way, whether people like it or not is … irrelevant. It’s where it’s going to go – it’s just the pace that is the question.”

The death of serendipity?

If we’re only being shown content and products that we ‘like’ or are likely to like based on our online browsing habits, what happens? Companies like Spotify offer us playlists based on what other people ‘like us’ are listening to, Amazon offers books bought by people who bought the same books as us, and Netflix suggests movies we might be interested in. 

Wired journalist Mat Honan challenged himself to like everything he saw on Facebook, throwing the machine tons of data, just to see what would happen.

The results? His personalised Facebook experience rapidly turned into one where only brand messages were displayed. Content from real people was distilled to almost nothing, while media companies shouted at him, at various degrees on the bullshit scale, multiple times per day. 

But the biggest insight he had was the scary polarisation that happens when you only see content that agrees with other content you have liked. In effect, you’re never challenged.

“This is a problem much bigger than Facebook. It reminded me of what can go wrong in society, and why we now often talk at each other instead of to each other. We set up our political and social filter bubbles and they reinforce themselves—the things we read and watch have become hyper-niche and cater to our specific interests. We go down rabbit holes of special interests until we’re lost in the queen’s garden, cursing everyone above ground,” he says.

Important changes in a person could be ignored if they are continually targeted in one way, Victoria University senior marketing lecturer Kate Daellenbach says.

“If you look at a consumer, we talk about transition phases. As consumers change, so do the recommendations to those people. I don’t think it’s the death of serendipity, but depending on the type of programme you’re using, you could ignore those important changes.”

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This story originally appeared in the January/February edition of NZ Marketing. 

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