Gray Matters: privacy, stereotypes and Sky

Face off

Recommending to a client the other day that they remarket display ads to those that visit their website via Facebook got me wondering which advertisers are targeting me. In Facebook settings, there’s a page where you can view your Ad Preferences that tells you, “this info was collected by the advertiser or their partner”.

I wasn’t surprised to see the likes of Spotify, Lightbox, Airbnb, Flight Centre and AA New Zealand on the list, but was surprised to see Professional Hypnotherapy, GEE-O Technology Shenzen Ltd, Nace Global Talent Network, and Canway, a company that apparently sells gym bags.

Now Facebook says they want me to know how data is used to show me ads without advertisers knowing who I am, because “protecting people’s privacy” is central to how they’ve designed their ad system.

So how does GEE-O Technology Shenzen get to me? Was it through pages my Facebook friends liked, was it from information from my Facebook and Instagram profiles, or perhaps it was from the places I checked in using Facebook. Possibly I’d signed up for some random newsletter, made an online purchase, or merely used location data which allowed Facebook to show me ads from advertisers trying to reach people in or near a place I was close to.

As a private citizen, I worry about big data and how it is used (the Cambridge Analytica scandal comes to mind). But as a marketer, I have been happy that Facebook advertising might work for my clients. According to Forbes, “Ninety-four percent of digital marketers prefer using Facebook over other advertising platforms such as Twitter, Instagram and Google Plus”.

A blog on Blue Frog spells out the good and bad of Facebook advertising. The ability to target to the exact demographic you want to market to is a godsend and the analytics are great. However, ads that go to “someone who has little to no interest in what you’re promoting,” is a pain in the A to both the recipient and the advertiser.

I can’t help thinking that ad budgets should be using more targeted advertising than Facebook and am slowly coming to the realisation that perhaps Facebook is a social network not an advertising platform. If the ads I’m receiving have little interest to me then perhaps the same can be said for you and/or your clients.

It would be remiss of me not to mention at this point that as a result of the Christchurch shootings ANZA and the Commercial Communications Council have challenged Facebook to “immediately take steps to effectively moderate hate content” and have asked domestic companies to think about where “their advertising dollars are spent, and carefully consider, with their agency partners, where their ads appear”.

I believe, however, marketers should make a rational decision regarding the effectiveness of Facebook advertising rather than a knee-jerk reaction to current events, and it’s interesting to note that ANZ has said it will return to advertising on Facebook after many major New Zealand advertisers threatened to pull their advertising from the social media platform.

Demographics in advertising

This week, The Verge reported: “A new study says that Facebook’s ad delivery algorithm discriminates based on race and gender.” Now I learned my positioning and segmentation theory in the age of the world’s best-known marketing strategists, Al Ries and Jack Trout. As Rise and Trout explain, position is a necessary tool used to reach their target demographic in an overcrowded market.

Market segmentation is ultimately a highly developed extension of such quite common-sense linkages between social, demographic, income, and gender groups and the products these typically buy or shun.”

As stated on Inc, “It might be argued that segmentation studies have gone too far, that the slicing and dicing of sub-sub-sub groups has reached rather silly extremes, but those who spend the money on highly elaborate market surveys and focus groups at least believe in the effectiveness of such techniques. And they have a certain scientific grounding.”

So, reading that it is now thought that basing advertising segmentation on the demographics of race and gender is somehow ill-considered, goes against a four-decade old marketing principle.

Last year, Crux Research posted a basic explanation of the Cambridge Analytica/Facebook scandal (which you can read here). In it, they stated that “market segmentation and stereotyping are essentially the same thing”.

“This,” they say, “presents an ethical quandary for marketers as almost every marketing organisation makes heavy use of market segmentation”.

I agree with their contention: “Segmenting consumers (which is applying stereotypes) isn’t inherently a bad thing. It leads to customised products and better customer experiences.” But also, it has to be said, “the potential problem isn’t with stereotyping, it is when doing so moves to a realm of being discriminatory that we have to be careful”.

The question then has to be asked, is Facebook’s ad delivery algorithm, discriminating on race and gender, applying stereotypes, or just making plain marketing sense?

In 2009, Ken Wheaton asked the question in AdAge, “Is market segmentation simply discrimination in disguise?” He believed not, but perhaps StopPress readers would like to answer that question in today’s environment.

As Crux posits: “What turns out to be a good model from a business standpoint ends up perpetuating a bias.”

The home of sport

As a Sky subscriber, I am heartened by the appointment of Martin Stewart as the new CEO of Sky and the end of the John Fellet reign. Trevor McKewen summarised the excitement and optimism many viewers are feeling in a great article on The Spinoff, Sky TV has a wild new strategy: stop doing things its customers hate.

With Stewart’s determination that “Sky Sport will be seen as the home of sport” after the debacle of losing the Rugby World Cup and Formula One rights to Spark, the new CEO’s firing of long-serving director of sport Richard Last, is a case of putting his money where his mouth is.

McKewen rightly reports that Fellet “failed to consider anything innovative or outside the square”, at a time when innovation was the name of the game in a competitive market.

It is not just Spark that has eaten away at Sky. Satellite TV is suffering at the hands of streaming services all over the world.

In the UK the number of subscribers to Netflix overtook the number of homes who are signed up to Sky’s satellite TV service at the end of 2018.

Closer to home, Roy Morgan reports that: “Over the last year Netflix has continued to lead the growth of Subscription Video on Demand (SVOD) services with over 11.2 million Australians in the three months to February 2019 now having a Netflix subscription in their household, up by 25.2 percent on a year ago”

Michele Levine, CEO Roy Morgan, previously reported SVOD is growing rapidly in popularity in New Zealand with leading services growing faster than across the Tasman in Australia. Once again Spark, with its Lightbox offering was a major contributor to Sky’s viewership slide. Sky’s New Zealand subscribers dropped from 856,348 in December 2014 to 750,321 in December 2018.

As Damien Venuto reported in New Zealand Herald, the drop in subscribers didn’t stop Sky TV hiking its prices after losing customers.

Streaming services are the greatest threat to satellite TV and as Stewart has indicated, one of the best ways for Sky to fight this is by being seen as the “home of sport”.

Advertising unhappiness

“Is advertising making us miserable?” asks Mick Joest in an article on Cinema Blend. A new study states the obvious when it says, “television audiences dislike advertising because it often interrupts the action, drama, and laughs during their favourite shows”.

As Joest reports: “In an independent study, the Centre for Economic Policy Research analysed the advertising spending in 27 European nations over the course of three decades. After crunching the numbers, the study (via Marketwatch) provided statistics that showed when a nation’s spending on advertising went up, life satisfaction in the country went down or increased less than what was expected.

According to a new paper published by the Centre for Economic Policy Research, the richer we get as a society, the more advertising we see. And the more advertising we see, the unhappier we get, it concludes.

Pure subscription services like Netflix and other streaming services have grown in popularity because they do not have advertising interrupting their programming, but as eMarketer principal analyst Paul Verna comments, “Netflix will, at some point, have to resort to additional monetisation options i.e.. advertising.

Advertising may be interruptive, but it’s here to stay.


“People do not buy goods and services. They buy relations, stories and magic.” — Seth Godin, author of This is Marketing: You Can’t Be Seen Until You Learn to See.

About Author

Graham Medcalf is a freelance writer and owner of Red Advertising.

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