Is Personalization Being Pushed Beyond Its Ability to Deliver?

A brand is a promise to the consumer. Technically, that makes it a liability rather than an asset, because something is owed in return for the implied benefit of buying that product or service.

The long term strength of the brand's strength - its equity and value - depends on the consistency of the relationship between the promise and the delivery.

The reputation of the enterprise making the offer is similarly tied to its ability to assure that the consumer can trust it to provide evidence of that value proposition over time.

Which is why the gleeful embrace of Big Data and its ephemeral promise of mutual benefit should be of concern to leaders charged with protecting the value of the entities that have been put in play. Because it is becoming apparent, as the following article explains, that the deal is increasingly one-sided: money in the bank for those who are selling the data customers hand over in return for what they have been led to believe are discounts or improved service or whatever the offer may be, but which too often turn out to be about as tangible as a shimmering mirage, eternally beguiling, but equally unattainable.

The problem is that consumers are starting to wise up. They get that their data has value and they are vaguely aware that they are probably not receiving full recompense for it. Their passivity to date has been fueled by a sense that at least they are getting something - and that they dont have the time or the resources to challenge the status quo. But more and more individuals and classes of plaintiffs are challenging these arrangements in the courts. And they are starting to win.

The implication is not just that businesses are going to have to offer a bigger or better deal, but that they are going to lose control over the sources and uses of the data because their hegemony was never firmly established in the first place - and it certainly isnt guaranteed in any constitutional mandate or legal doctrine. So those who want to preserve what value is left and make the case that they are stewards deserving of what additional benefit could be created are going to have to begin demonstrating that they are worthy of that trust. Because if they can't - or won't - the consumer will just find someone else who will. JL

Scott Berinato comments in Harvard Business Review:

The promise to consumers is almost always the same: The more data you give us, the better, and less expensive, the service we give you. Sometimes the value swap is that clear-cut, but for the most part, the trade isn’t nearly so equitable
Google’s newly acquired Nest thermostat tracks people’s movements around their house and “learns” how warm they like to keep the rooms. Facebook offers an app that turns on the microphone of a person’s device and listens to the sounds it picks up, apparently to better target music and TV choices. Amazon’s new smartphone has cameras that not only track pupil and head movements but also can use facial recognition data to estimate the gender, age, and ethnicity of the person looking at the screen. (Amazon says it hasn’t enabled that feature yet.) The recent rearchitecture of Disney World is centered on RFID bracelets that monitor the wearer’s actions and transactions in the park.
We’re now in an age of continuous consumer surveillance; tech, retail, entertainment, and other companies are making multibillion-dollar strategic bets on their ability to tap vast amounts of vastly more personal data—and on our continued willingness to let them. Their reasons are obvious: They cash in by offering customers what they want when they want it and by selling the data to brokers and marketing companies.
The promise to consumers is almost always the same: The more data you give us, the better, and less expensive, the service we give you. Nest keeps you comfortable and slashes your energy bill. Facebook connects you with people and things you didn’t even realize you were missing. Disney promises shorter lines. (For more on Disney’s customer analytics, see “Digital-Physical Mashups” in this issue.)
Sometimes the value swap is that clear-cut, but for the most part, the trade isn’t nearly so equitable, as several new books point out. The mining is often far more invasive, and the data are used for far more purposes, than consumers realize.
How are companies getting away with it? Christian Rudder argues in Dataclysm that although there’s been an uptick in public concern over loss of privacy, consumers are, for the most part, apathetic. “Tech loves to push boundaries, and the boundaries keep giving,” he writes. “Whenever Facebook updates its Terms of Service...to reach deeper into our data, we rage in circles for a day, then are on the site the next.”

“Whenever Facebook updates its Terms of Service...we rage in circles for a day, then are on the site the next.”

Christian Rudder, Dataclysm

Rudder founded the online dating site OKCupid, so he understands why companies are obsessed with learning our every move: The data are seductively correlative. Seemingly innocuous bread crumbs of information (what movies we like) or even data effluent (word-use frequency) can paint an astonishingly detailed portrait of a consumer and predict traits or behavior with eerie accuracy. Rudder shows, for example, how data scientists’ algorithms can guess a person’s sexual orientation correctly about 90% of the time solely on the basis of his or her Facebook “Likes.” At the same time, he says he’s personally ambivalent about using social media. “I myself know the value of privacy.”
This admission from a man who built his business on data mining suggests that something other than apathy is at work here: consumer ignorance. Why else would companies work so hard to obfuscate their data practices, bury their ownership claims in byzantine Terms of Service, or make opting out difficult or dependent on losing other features? If consumers knew exactly what they were ceding, I think they’d opt out just as Rudder has.
The problem isn’t just companies’ own data collection; it’s their growing capacity to mine outside sources—some of which they buy, and some of which are just “out there”—to build detailed consumer profiles. That’s the point journalist Adam Tanner makes in What Stays in Vegas, which looks at data collection through a single vertical industry—gambling. The CEO of one major firm Tanner spoke with describes slot machines that will soon recognize gamblers through retina scans, face or voice recognition, or fingerprints, and then will tailor the experience on that machine to the individual. “It has my family pictures, it has my music, it has my friends,” the CEO says. “I can send a Facebook notification that I just won $300 at the Elvis machine.” Regulation is the sole impediment, she argues—and she dismisses that as a mere speed bump.