It is isn’t new and is something that has been around in the world of business for many years, however, data mining itself has had a ‘brand refresh’ in recent years, tracking online consumer use, with terms such as data profiling and dataveillance now in common use.
According to the Financial Times Data Mining is:
“[The analysis of] large amounts of data about customers held on a computer in order to get information about them that is not immediately available or obvious.”
Data mining has become a tool that is widely used within the marketing and advertising sector, with a keen focus on retail and the consumer environment. It has been given increasing emphasis in the role of strategy development within advertising and marketing campaigns, mainly due to the wealth of information that it can now provide for companies. The increasing rise of the digital world, with daily activities such as shopping and socialising now moving online in the form of online shops, newspapers and social networking sites, activities have now become more easy to track.
Consumer’s participation in the digital world has made it easier for companies to build a detailed consumer profile through consumer’s online activities and therefore, create a tailored online and offline experience for the consumer. The use of online cookies have enabled companies to track specific online movements of consumers and have become a lucrative tool in the statistics industry.
Companies’ use of data mining can be viewed as beneficial for both the consumer and the company. The company gains ethnographic information about consumers, on a large scale, which can be analysed to improve products, services, positioning and commerce strategies for the company, which in turn makes the company more successful and drives profits. When companies improve their products and services by (for example) creating a tailored online shopping interface, or making product suggestions and alternatives based on the previous tracked shopping on the website, this is beneficial for the consumer, as they received a better and more positive experience with the brand.
However, I recently read an article about that detailed the mining of data from social networking sites, online blogs and other social networking platforms. It suggested that companies are now creating an online profile for each individual consumer, monitoring social networking profiles, usage, blogs, online comments and online consumption patterns to build a profile of a consumer and sold to companies.
This made me question, do we, as consumers have a choice about the information gained by our use of websites such as Facebook and Amazon?
The pressure to conform to social norms, and the social networking movement have amde the option of not having a social networking profile near impossible. Consumers don’t want to get left behind in the online boom, and it seems that if you want to be part of this social drive Facebook is an absolute essential. However, when consumers opt into using social networking sites they are opening their lives to companies.
We have no choice but to use these sites to keep up with social norms, therefore, is it right that consumers have no choice in whether they want such information to be gathered about them when using such sites? Is our privacy the price of free?
When we sign up to use “free” internet services such as Google, Hotmail, Facebook, Twitter, Youtube and many more, are we paying with our privacy? And what effect does this really have on our lives?
An article published by O’Reilly Media proposed the negative effects of the use of data mining and the real value of online free. It was suggested that data mining is used by credit card companies and as claimed by the aforementioned Mashable article, can actually affect the credit that you can get. When data profiling is used, companies “treat all consumers as examples of a pattern and not individuals”.
The regulation of such marketing tools is important, but however, increasingly difficult due to the ambiguous nature of online.
The UK have however, made some attempt at regulation with the Freedom of Information Act (2000), the Data Protection Act (1998) and now with the expansion of the CAP code to online marketing communications.
Without sounding too negative about the use of data mining within marketing, Smirnoff Nightlife Exchange Campaign is a brilliant example of the integration of data mining both offline and online to create a a successful multi platform campaign.
The company created an online campaign via Facebook, which created a Facebook app, which invited target consumers via their online profiles.
The event held 14 nightlife swaps around the world on one night, all sponsored by Smirnoff. The following link provides videos and pictures of the nights.
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