Introduction
Growth of the online market and developments in online platforms have given rise to new media marketing, which refers to the use of social media, mobile platforms, and search engines to reach out to customers (Herman, 2011). New media tools facilitate exchanges of information between marketers and consumers. Easy transmission of customer information on the Internet has led to the issue of consumer privacy (Hann et al., 2007). Consumer privacy refers to the prerogative of consumers to be left alone or be free from unsolicited intrusion, consumer control over access to personal information they share online, and concealment of information from the public (Charters, 2002). New media marketing has given rise to the issue of consumer privacy because of the myriad of ways and emerging mechanisms through which consumer information is being collected, stored, monitored, and used for marketing purposes with and without the knowledge of consumers. In this sense, new media marketing can be inimical to consumer privacy (Charters, 2002). Yet, this can be rectified by initiatives addressing consumers’ privacy concerns on new media marketing. The discussion is a detailed description of the issue of consumer privacy in new media marketing.
Issue of Consumer Privacy in New Media Marketing
Issue of consumer privacy in new media marketing can be broken-down into: (1) collection and monitoring of customer information for marketing, (2) use of collected and monitored information for marketing, (3) sale of consumer information to third parties, and (4) efforts to address the privacy concerns of consumers.
Collection and Monitoring of Information
Information on online consumers can be collected in a variety of ways. Most of these information collection tools operate without the knowledge and permission of consumers.
Online forms are an overt way of collecting and storing consumer information (Cho et al., 2009). Signing up for a social media account, on Facebook or Twitter, involves the provision of personal information by the user. Information requested may include full name, gender, age, birthday, geographic location, schools attended, employment history, and interests. In signing up for an account, users willingly provide the information. Although information is stored in the social media company’s database, privacy options enable users to control the personal information shared through the site. Common information is used to connect people who may know each other or share interests. Social media has also become a marketing venue. Individual sellers and firms can create accounts and pages for advertising and selling. Information exchanged through these pages include buyer preferences and banking accounts. Information collected and stored on social media databases, including sensitive personal and financial information, can give rise to consumer privacy when the protection of information is unclear, given that breach of these databases is a potential threat to consumer privacy. (Ashworth and Free, 2006) Breach of Facebook’s database has been reported in 2012 and 2015.
Browser cookies, web beacon, and clickstream refer to covert file-creating systems embedded on browsers and websites. Browser cookies, which are small text files, are created and stored on the computer of consumers every time a browser opens a webpage. Cookies originally emerged as a way for consumers to easily access secured websites through automatic retrieval of information. Username and password for emails, social media sites, and online store accounts are automatically filled-in at the log-in page. Browser cookies on customer’s computers are accessed via the web server to determine the search and browsing history of the consumer. Cookies can also provide information on particular preferences provided by the consumer in websites that provide options, such as on whether or not the consumer prefers to receive a newsletter or new offers. Third-party cookies also allow a third party to access cookies. (Charters, 2002) Browsers provide options for consumers to allow or disallow cookies. Consumers are asked whether or not they would allow the browser to open a website that utilizes cookies. Software may also flag websites with cookies as potential spyware threat and alert the consumer about the issue. However, control over cookies rests on the awareness of consumers about the uses of cookies, the length of time that cookies are stored, and the options they have for controlling the creation of cookies when they browse. (Evans, 2009) Web beacon is an electronic file integrated into a webpage or email message to inform the webpage owner or sender on whether or not the page or email was opened and the actions done, especially when the web page or message involves an option to click on a link. Spammers use web beacon to confirm whether an account is active for the purpose of sending more emails. Web beacon is a consumer privacy issue by facilitating covert monitoring of user behavior and sending unsolicited marketing content. A clickstream refers to the record of Internet use, including movement from one webpage to another and clicks on browser search results. This can be recorded by web sites and Internet service providers. This can be used to improve websites as well as enhance advertisement targeting without the knowledge and consent of consumers. (Grama, 2015)
Spyware, adware, and key loggers refer to different programs that covertly collect information on consumers. Spyware is any technology that secretly gathers information about a person or system. Adware is a software that displays unsolicited advertising to website users. Advertisements pop-up when opening a website or form part of the webpage. A keystroke logger is a program that records keystrokes made on a keyboard or mouse. These were designed to gather information on searches, s and passwords, and financial information without the knowledge of the user. These pose a threat to privacy because of the covert mode of collecting information that open consumers to intrusive marketing communications and limits their control over the collection of their information. (Grama, 2015)
Use of Collected and Monitored Information for Marketing
Consumer information can also be used and appropriated to support new media marketing. Common use of consumer information are for targeted advertising and direct marketing online.
Consumer information is commonly used for targeted advertising. Data on consumers are used to target them with emails and advertisements according to their personal information, browsing history, and online behavior. Relevant advertisements are more likely to engage consumers to consider the offer and make an actual purchase. (Evans, 2009) Unsolicited contact is a consequence of data mining of consumer information collected online that is related to target advertising (Miyazaki and Fernandez, 2000). Direct marketing online, through email and social media offers, create a privacy issue when these are unsolicited. These may be perceived as intrusive by consumers, especially when these are frequent and contain content that is not of interest to the consumer. (Dolnicar and Jordaan, 2007)
Intrusion and loss of control over the volume of unsolicited information leads to negative perceptions on the part of recipients (Dolnicar and Jordaan, 2007). Negative perceptions may also worsen after discovering that information from browsing activity and provided on a website has been used to send spam advertisements to the recipient. Annoyed and frustrated consumers are likely to ignore the advertisements, refrain from purchasing advertised products, sabotage marketing efforts, and spread negative reviews about the product and/or company. (Ashworth and Free, 2006) Advertised offers may also be rejected outright, even if the offer is favorable to the customer, because of the guile involved in the collection and appropriation of customer information for marketing (Dolnicar and Jordaan, 2007).
Sale of Consumer Information to Third Parties
Information collected online can also be directly sold to third party companies and advertisers or used to provide customized advertisements on the browser and websites visited by consumers. DoubleClick, a subsidiary of Google, is a company involved in the development and provision of online advertisements to different platforms, including Google browser, Gmail, social media websites, and other websites that enlist the services of the company. Through electronic monitoring, information on consumers is collected and analyzed for the purpose of delivering relevant advertisements on the browser and websites viewed by consumers. (Charters, 2002) DoubleClick and similar companies engage in agreements with publishers for the creation of advertising networks for the delivery of generic or targeted advertisers to viewers at a fee. Advertising networks have become useful to small websites and blogs as well as company websites and social media portals. Publishers earn a fraction based on page views or clicks of the advertisement link. The process generates further information on user behavior towards particular advertisements posted on the websites they visit. Information generated by the process has been justified by improvements of websites and online advertising, but compilation and data mining of the information collected from a user’s online activity can also identify characteristics and behaviors, which the user did not intend to share and does not want to share or be sold without consent. (Evans, 2009)
Discovery of the sale of information to third-party publishers, through the advertising network, without the consent of consumers can also further enhance negative perceptions of consumers (Ashworth and Free, 2006). Loss of trust of the company and the website where they provided information prevents further engagement of online consumers (Hooper and Vos, 2006). Loss of trust results to stronger concern over the risk involved in sharing information online to cause the shift to control behavior, such as providing false information or refusing to provide information. This would complicate the relationship between retailer and consumer. (Olivero and Lunt, 2004)
Efforts to Address the Privacy Concerns of Consumers
Violation of consumer privacy could have serious consequences for consumers and their online experience. Legislations and regulations on the collection, monitoring, and use of consumer information are still developing, which make consumer responsibility and self-regulation of companies and advertisers important.
Consumers can take responsibility for controlling the collection and use of information. Consumers can refrain from using Google for browsing and Gmail for sending and receiving emails because these portals utilize tools for collecting and storing information on users, deactivate browser cookies, use anti-spyware and anti-adware software, and control their privacy settings on social media. (Charters, 2002) However, three problems could limit the ability of consumers to control the collection, use, and sale of the information they willingly or unwillingly share online. First, imperfect information on the collection and appropriation of consumer information by companies and advertisers prevents consumers from implementing measures to protect their privacy. Many consumers are not aware that information is being collected and stored for use in marketing. Even with consumer awareness, they may not be knowledgeable about the tools they can use to regain control. Second, many consumers also expressly or impliedly agree to share personal information in their online activities, but without realizing that the information shared is combined and mined for use in marketing or sale to third parties. Third, advertising networks are competitive platforms that provide little incentive for companies and advertisers to diligently consider consumer privacy. Consideration of consumer privacy would only be to the extent that would facilitate the collection of information for use in marketing. (Evans, 2009)
As a result of these issues, some degree of consumer protection is needed. Laws and regulations on consumer privacy are still developing. In the US, privacy law comprises of a patchwork of laws and regulations that cover privacy concerns for different segments, such as consumers or industries (Loeffler, 2012). The US legal and regulatory regime favors self-regulation. Regulation is narrow and focused on sensitive information, such as those on the databases of financial institutions and information pertaining to children or minors. (Fernback and Papacharissi, 2007) In the EU, members are required to protect consumer privacy by restricting the sharing of information to countries that do not implement similar levels of protection. Extent of compliance have not been thoroughly examined. (Ashworth and Free, 2006) Proposed General Data Protection Regulation in the EU and the Do-Not-Track Online Act of 2013 in the US sought to respond to the issues of consumer privacy and data protection, but these have yet to become law (Finn and Wadhwa, 2014).
With the need for consumer privacy protection and current insufficiency of laws and regulations pertaining to consumer privacy, self-regulation of firms is important. Two initiatives have emerged. One initiative is the creation of a privacy policy and use of privacy statement and seal on websites. A privacy policy and statement addresses the expectation of consumers for companies and marketers to disclose the reasons for collecting consumer information and the manner of protecting consumer data (Dolnicar and Jordaan, 2007). Disclosure through privacy policy and statement builds trust, eases privacy concerns, and allows consumers to take some degree of risk in providing information (Hooper and Vos, 2006). However, many companies and publishers view the privacy policy and statement as a mechanism for self-protection instead of a means of protecting consumer privacy (Fernback and Papacharissi, 2007). Privacy policy and statement are also not contracts that companies and publishers are enjoined to fulfill. Internet seals of protection, issued by a third party, emerged as a means of easing consumer privacy concerns. Credibility of the third party issuing the seal may be tainted by its pecuniary interests, with companies and publishers paying for the seal. Seal from a trusted third party, which exercises objective criteria, can facilitate positive consumer perception of the privacy policy and practice of the company or publisher. (Miyazaki and Krishnamurthy, 2002)
The other initiative is permission marketing, which achieved renewed relevance in new media marketing. Permission marketing requires a marketer to seek permission from a consumer before commencing and cultivating a relationship with the consumer (Godin, 1999). Obtaining permission can be through an opt-in and opt-out system. An opt-in system explicitly requires consumers to choose to share information with the option of revoking this choice later on. An opt-out system involves sending marketing messages to consumers with the option for them to choose not to receive further advertisements. (Kumar et al., 2014) To achieve positive response from consumers, marketing communications should be expected, personalized and relevant (Godin, 1999). Advertisements tailored to the interests of customers make the marketing message relevant to consumers (Tezindo et al., 2002). The opt-in system is more consumer-friendly, but a personalized and relevant marketing messages in the opt-out system may also work. Consumers who opt-in are likely to be receptive to marketing messages (Brey et al., 2007), but the tendency of companies to exercise excessive marketing can annoy customers to the point of opting out just to stop the intrusion of marketing messages (Kumar et al., 2014).
Conclusion
Issue of consumer privacy in new media marketing affects the successful establishment of an online relationship between consumers and advertisers or companies as well as the achievement of consumer goals and marketing targets. Aspects of the issue of consumer privacy that need to be addressed more effectively are collection and monitoring of consumer information, use of consumer information for marketing, sale of consumer information to third parties, and initiatives to address consumer privacy concerns. New media marketing offers significant potential for businesses, but consumer privacy have to be considered in order to achieve positive results.
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