Monday, December 20, 2010
VDP: Violating Privacy?
About three years ago DirecTV began working on targeted TV ads and has formed a partnership with Starcom MediaVest. The goal of this adventure is to provide "addressable messaging" at a national level. The key here is that companies like Proctor & Gamble, General Motors and Coca-Cola what a large platform for variable message marketing.
By large platform they are looking for millions of people. DirecTV has a customer base of about 19 million subscribers - each, as part of the service, has set-top box capable of delivering a specific message during certain points within its programming.
This, however, does not mean your desktop box is "watching you" and recording your activities. Though it can and may be for other reasons, for this particular program DirecTV and Starcom are buying third-party address data and using it to drive the program. So by going with a traditional marketing source for household demographics they can decide whether you will see the dog food ad or the ad for cat litter.
If we compare this to VDP we can see that VDP pales in comparison. First of all, there is cost. You can probably purchase local cable ads for as little as $50 USD a spot. Though you would want a long-running program of multiple spots over time to achieve audience penetration (running the ads frequently enough so that people notice them). Of course, you can spend millions of dollars running super bowl ads, but that is the exception rather than the rule. VDP, on the other hand, requires at least $.44 USD/piece in postage alone. Obviously you must pay to create the ads in either case.
Secondly, and more interesting, large companies want larger ad bases - national based ads with success scalable to millions. To achieve this with print the cost is insurmountable.
In any case VDP has rolled along for the last decade, albeit relatively slowly when compared with the progress DirecTV plans to make in terms of audience size and scalability.
During this time no one that I know of ever really made much noise about the privacy issues related to VDP. While there have always been privacy issues associated with email opt-in and so forth nobody every really thought much about print privacy. I suspect because variable printing typically involves one of two types of information: account based in which case you are already a customer or demographic "junk mail" based where the piece is generic enough that you don't consider your receipt of it a privacy issue.
In Europe, for example, there isn't the same "junk mail" model - its a crime to mail people unsolicited offers.
Today, however, things are starting to change. During most of the last decade there was little general public awareness of what information might be "known" about you. Everybody understood that big mailing databases existed and that you were probably in them - but the information was not considered to violate anyone's privacy to any significant extent. Certainly you could get yourself removed from most "junk mail" lists if you worked hard enough at it. (I recall a friend once explaining that he had managed to stop the delivery of the weekly coupon flier to his mailbox - I think it took months - but he accomplished it.)
With the ubiquity of the internet things are not so easy. First of all, most people don't realize or understand that what they "do" on the internet is not "owned" by them. What I mean by this is that if you sit at home and browse a catalog the catalog does not collect information about what you are looking at. On the other hand, if you browse someone else's web site its perfectly legal for them to record everything you do there.
The issue is that the "privacy model" from the catalog world is what the internet user assumes when going on line. Most people, being non-technical, don't or can't understand the difference.
Secondly, the "feedback loop" that brings a targeted ad back to a customer is much tighter online. The time scale is smaller and the targeting much tighter. If, for example, you buy from Amazon you are likely to get an email explaining what others who bought the same thing as you did also bought. (Recently I bought some router bits and about 10 days later received an email offer to buy other types of router bits that others had also bought. This is sort of a poor choice on Amazon's part because what you do with the bits is just as important as which bits you buy - and they don't collect info on what you are using them for.)
People notice this. In a VDP campaign it might be weeks between mailings and a purchase and you are less likely to realize that some private information might be involved.
My guess is that there will be new privacy laws driven by all of this.
More importantly here, things like VDP will be negatively impacted because they will be lumped into the broader "privacy" picture. This is a shame because VDP has pioneered much of the personalization marketing effort - particularly in areas like casinos.
I see two things happening.
One is that there will be a clear distinction between opt-in and "junk" advertising. Opt-in will cover anything that you agreed to (by email, by clicking "send more information", and so forth). Junk will be considered anything you did not ask to be involved with. The Google's of the world will continue to collect data but it will be anonymously unless its opt-in.
Second we will see "privacy laws", like the European junk mail laws come into play on electronic advertising. Here things will become interesting and there will have to be some means to decide how much privacy "invasion" is too much. Is my privacy invaded if you show me a cat liter ad instead of a dog food ad?
I suspect that the issue will be this: If you choose to use electronic and/or non-cash means to purchase things then your information will be fair game. If you are so adamantly opposed to being "watched" that you only pay cash at Walmart then you will effectively opt out by your actions.
There will be "opt out" and "browse privately" technologies but they will not do much in the long run other than eliminate blatant privacy violations because most people won't be able to distinguish between a generic "ad" and what looks like a generic "ad" targeted specifically at them.
In any case VDP and print will probably sucked into the maelstrom and doing anything that's too "personal" will become a crime.
Posted by John Gault at 7:29 AM