Why the N.S.A. Scandal Is A Good Thing For Marketers

Allan Fromen
Allan Fromen



NSAIt seems every week there is another revelation about how the National Security Agency is collecting pieces of our private lives. When Edward Snowden first went public, we were told the N.S.A. only collects “metadata” — high-level information such as the number called and the length of the conversation. The New York Times subsequently revealed that the N.S.A. also goes directly to the source, bypassing Internet companies and penetrating the fiber optic cables that carry our data, emails and browsing history. And during the holidays it was reported that the N.S.A. intercepts consumer electronics shipments prior to delivery and installs spyware and other bugs that enable remote access.

It is clear we now live in a Ridley Scott-type thriller, where our digital fingerprints are potentially harvested and monitored by the government. What is most surprising to me is the collective yawn of the American public. Where are the sit-ins and demonstrations? A generation or two ago, this type of news would have led to mass protests in city streets and across college campuses. But the American public has been largely silent.

I think our collective shoulder shrug can be explained in a word: Google. Long ago we realized that our personal details were worth the convenience of Google products and services. This all started with search, where our queries helped Google target us with advertising in exchange for results that were fast and accurate. Google successively rolled out additional products: Chrome to track our browsing, Maps to target our locations and Gmail to scan our emails, which help them get to know us even more precisely.

Essentially, Google has anesthetized us to the N.S.A. scandal. How can we possibly object to the N.S.A. if we willingly give over our information to Google? In fact, a Pew Center survey this summer found that 56 percent of Americans agree that tracking our telephone records is an acceptable way for the government to investigate terrorism. If our personal information is exchanged for better driving directions, then it only stands to reason we would not object to that same information informing the N.S.A., which protects us from harm and uses the data to keep us safe from terrorists.

Of course, I use Google only as an example (and in fact, I use many of their products and believe the company is solving real problems and making our lives easier). Facebook, Twitter and just about every Internet company all collect our data to serve us tailored ads that we will hopefully click. In turn, those clicks mean revenue for the companies, and that revenue translates into a profit, so they can continue to provide us with their services for free. Peter Reville, a Senior Business Leader of Market Intelligence at MasterCard, calls this phenomenon “data as currency.” By this he means we “pay to play” — using our personal data as a form of currency (digital cash, if you will) to receive something of value in exchange, such as free services including email, social networking, online shopping and other conveniences of the Internet age. In fact, MasterCard research shows that 64 percent of consumers believe their personal data has value to merchants and advertisers (Full disclosure: I consulted to MasterCard on that research).

So why is this good news for advertisers? Well, the landscape is shifting from mass advertising to personalized marketing. More and more U.S. citizens are carrying smartphones, which are essentially digital conduits for collecting our every detail — our location, our friends, our preferences and so forth. As more of us embrace smartphones, marketing will de-emphasize the shotgun approach (TV, circulars, etc.) and embrace the sniper rifle. For example, knowing you are passing by a Starbucks, are a loyal customer who gets a daily latte and have a spouse’s birthday next week, the company sends you a 25 percent off coupon right as the green neon sign enters your line of vision.

The minority-report type of one-to-one marketing is coming. Advertisers have only dipped their toes into truly personalized marketing — partly due to technology and infrastructure limitations — but mostly due to fear of a consumer backlash. Will that Starbucks ad be viewed as creepy or useful? Will I reject or embrace the brand that used my personal information to target me with specific offers?

Whether we like it or not, we’ve already lost our privacy. Who has not received an email or read about a massive data breach of passwords or credit card numbers? This is collective learned helplessness — we are like the rats that keep getting zapped and no longer object. In such an environment, sharing some personal details in order to receive relevant offers seems fairly innocuous by comparison.

The N.S.A. scandal, or lack thereof, indicates that we are now officially ready for targeted marketing. This idea is echoed by Greg Girard, Program Director Retail Insights at IDC, who notes that consumers are primed for targeted marketing, with almost one in two open to offers based on their personal data (according to IDC internal research).

Back in 2011, Scott McNealy said “Privacy is dead. Get over it.” It took another few years, but we have all come to realize this is true. What we now want is to at least get something of value in exchange for it. You want my personal information? Then give me amazing, useful and time-saving products such as Google, or allow me to stay connected to all my friends and family like Facebook.

This permission is both a blessing and curse: Use it intelligently, and I will engage with your brand in a better way than ever before. But use it to send me boring, irrelevant ads, then you no longer deserve me as customer, and I will drop you for a brand that truly gets it.

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