Anybody want more cookies?

We were all wowed in 2008 when iTunes unveiled its Genius feature. Apart from creating playlists from your existing library, it also told you about music to buy based on what you had bought previously, what people with similar playlists to yours had added to their basket, and what you might have looked at on your last visit to the iTunes store.

Even today when you jump on to iTunes, you can see the right side of your computer screen strain into action as it analyses enormous amounts of data to provide you with what it believes are the most relevant offers. And it’s scary how many times it gets you to buy another track or album.

In 2013, you’re likely to have had the same feeling with the ads that pop up on your screen as you jump between websites. What a coincidence that you were thinking about getting a corporate credit card for your business and there’s an ad for it. Same with that new pair of shoes you were considering.

Well, it’s no coincidence. Advertisers can track your behaviour online, including your location, and serve up ads tailored for you in real time. It’s called performance media, and there are plenty of technical terms involved in how it works, but the simplest and most commonly used is ‘cookies’. Cookies enable brands to track consumers firsthand through their own websites and apps, and also through third-party sites via Google.

A powerful tool in the marketing armoury, performance-media technology makes sure brands are showing the right message to the right person at the right time. As it is mainly an automated process, costs can be minimised and return on investment maximised.

Some consumers find this extremely helpful and intuitive, just like the Genius feature in iTunes. But when brands get it wrong, consumers can feel as if their privacy has been invaded. A recent ‘targeted’ ad on Facebook by a dating site had many of my female colleagues flustered as they didn’t actually want to meet a mature man.
In Britain last year, the government mandated an opt-in system on all websites, so consumers could click yes or no to allowing that brand to capture cookies data. It’s quite an ethical dilemma, as some people are more than willing to give up as much data as possible to receive the most relevant offers, yet others don’t want any personal data captured.

In a recent survey by Ernst & Young in Australia, 72 per cent of consumers said they would share more personal information to receive better service, and one assumes offers, from their bank. On the other hand, 65 per cent of people in the US have taken steps to protect their online privacy by deleting cookies, and 39 per cent have requested that websites not track them.

As brand custodians, marketers must take note of this. Given consumers see brands as people – and why not, as they can interact with them on Twitter and Facebook – any data captured must be used like a helpful, intuitive and ethical neighbour, and not that creepy guy spying over the back fence.

Hotels have been doing this in a more neighbourly fashion, but manually, for years. The team at the front desk or the concierge have quietly written down your favourite dish, how you like your coffee, whether you like bananas or apples or beer or wine, which newspaper you prefer, and whether you go for a run in the morning or the evening. It’s always been about anticipating your needs, and surprising and delighting you every so often. “We have a great new craft beer at the bar. The first one’s on us. Thanks for coming back.”

But nowadays that same hotel might follow you on Twitter. Be surprised (or don’t be) if you tweet that you’ve just arrived in town for your anniversary weekend with your partner, and then find a bottle of champagne in your room alongside a discount offer on dinner for two in the hotel’s best restaurant. Technically, it’s no different to marketers following online behaviour and serving you ads with a relevant offer. But again, brands need to be the nice neighbour, not the stalker.

Governments, content platforms and brands are scrambling to strike this balance. Marketers need to be aware of the Privacy Act in Australia and its implications for performance media. Google has built part of its success on allowing cookies and automating this data and analytics for the benefit of consumers and marketers, whereas the Firefox browser is proposing to block cookies by default. Many countries have followed Britain’s lead and asked consumers to say yes or no to cookies on each website they visit. It’s a fast-moving area, and one marketers need to be on top of, for both return on investment and ethical reasons.