Editor's Notes: So Now Marketers Are Racists?

Thorin McGee, Editor-in-Chief/Content Director, Target Marketing

The much-anticipated White House report on Big Data may have invented an issue even more problematic to marketers than privacy: Is personalized marketing discriminatory?

“Unfortunately, ‘perfect personalization’ also leaves room for subtle and not-so-subtle forms of discrimination in pricing, services and opportunities,” says the report (downloads as a PDF). “For example, one study found Web searches involving black-identifying names (e.g., ‘Jermaine’) were more likely to display ads with the word “arrest” in them than searches with white-identifying names (e.g., ‘Geoffrey’).”

The discrimination questions raised by the report don’t stop at potentially racist corner cases. The section “Big Data and Discrimination” identifies it as a key finding:

An important conclusion of this study is that Big Data technologies can cause societal harms beyond damages to privacy, such as discrimination against individuals and groups. This discrimination can be the inadvertent outcome of the way Big Data technologies are structured and used. It can also be the result of intent to prey on vulnerable classes.

Now, after that quote, the report goes on to talk about two seemingly innocuous occurrences of inadvertent discrimination. But it soon returns to the topic of predatory discrimination and “differential pricing.”

In fact, the report asserts “Consumers have a legitimate expectation of knowing whether the prices they are offered for goods and services are systematically different than the prices offered to others.” It then calls for expanding the power and expertise of several government agencies to be able to identify and “resolve” cases it interprets as “discriminatory.”

A few paragraphs later, the report says national security, homeland security, law enforcement and intelligence communities should “continue to vigorously experiment with and apply lawful Big Data technology.”

So, once again, it appears marketers are the bogeyman being used to distract Americans from government’s expanding surveillance powers.

Thorin McGee is editor-in-chief and content director of Target Marketing and oversees editorial direction and product development for the magazine, website and other channels.
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Comments
  • paul

    This sounds like one of those "studies" in which the conclusion was determined before any research was done. Then they look for the evidence that backed up their desired conclusion.

  • Denny Hatch

    Clearly this silly report was created by Goo-Goos (Good Government Goodie Two Shoes) who know squat about marketing.

    >>In fact, the report asserts "Consumers have a legitimate expectation of knowing whether the prices they are offered for goods and services are systematically different than the prices offered to others.">"For example, one study found Web searches involving black-identifying names (e.g., ‘Jermaine’) were more likely to display ads with the word "arrest" in them than searches with white-identifying names (e.g., ‘Geoffrey’)."

  • Roger Keeling

    Excuse me, folks, maybe it’s time for the industry to drop the defenses and consider the merits of the issue!

    Because I live in a racially diverse place, I have been fortunate in developing friendships with folks of different colors and cultures, something that never happened in the white-bread suburbs where I grew up. One thing that’s struck me is how blind I’d been in the past to routine levels of racial discrimination that dog minorities constantly. Small examples: a friend was routinely steered toward junky cars when he went looking for a good used car for his daughter; when I went with him, the very same dealerships suddenly had a treasure trove of excellent condition late-model Hondas and Toyotas. The wife of another friend (in a mixed-race marriage) has given up going to the premier department store here. If she goes with her husband, it’s fine; on her own, she’s blatantly shadowed by a loss-prevention specialist. She’s given up and now boycotts the store entirely.

    The rightwingers in this country keep trying to claim there’s little racism anymoe, and then — worse — try to turn the tables, claiming any claims of racism are themselves racist. It’s disgusting, literally borrowing a page directly from Joseph Goebbels. Now I don’t believe for a second that most direct marketeers care one bit about the race of their customers: a sale is a sale. But this report makes the excellent point that those who ARE inclined toward racist thinking are being ably assisted by Big Data. And — more systematically — unintentional racist typecasting is occurring, not for malignant reasons but nonetheless with deleterious results.

    And one more thing: a big study such as we’re discussing IS supposed to round up all the problems into one place. It is NOT a get-out-of-jail-free card for un-constitutional snooping by the nation’s police apparatus into our private affairs. Rather, it is a problem — one worthy of discussion — in addition to that.

  • Larry Karkos

    Consumers benefit from the use of data and someone needs to make this known to the public. It is not all about exploitation, whether on the basis of ethnicity or any other characteristic. Big data makes for a better shopping experience for the consumer and the DMA needs to make that case, strongly and loudly..

    Clearly, using the "arrest" example, it could be argued that some targeting appears to be racist when looking only at the surface, but let’s look at a different example that falls into this same criteria. To be "racist" would imply marketers are typically disadvantaging people based on their ethnic background through their variable messages when in reality marketers are trying to provide a targeted service/product to an audience that wants to pay for them in an efficient way to keep prices down. Targeted promotions beget efficient marketing and from that perspective it most certainly is in the consumer’s interest to allow targeted promotions.

    Does anyone claim racism drives the availability of Matzo ball soup served in Jewish Deli’s simply because Matzo is not generally sold in Harlem? Does this writer think such evidence of matching product to audience is racist simply because Blacks don’t have equal access to Matzo and don’t have the expectation that they will be offered the same products as offered to the Hasidic community of Boro Park in Brooklyn and at the same price?

    If targeted marketing doesn’t make for better more efficient marketing, the practice will crumble under competitive marketing pressure for profits and will cease to be used. Profits are equal opportunity and not de facto inherently racist even when ethnicity is a criterion. Either marketing based on income, gender, ethnicity or other characteristics imparts a commercial advantage to the marketer (and therefore also to the consumer) through increased efficiency or it does not. But it is a double-edged sword that is determined by results, not beliefs.

    Perhaps this author believes Essence and Jet magazines should be forced to promote subscriptions randomly across the country so as not to "target" blacks and appear racist while realizing that as a result 80% of the prospects would be unlikely to respond due to a lack of relevance. All that additional paper and postage going to un-targeted recipients would be considered well spent, I presume. Random promotions might make the cost of doing business skyrocket, but at least it wouldn’t have the appearance of being racist due to racial profiling. Perhaps Jherri Curl likewise needs to be regulated so that they are ensured to place as many billboards per capita in Highland Park, TX (where no blacks were registered as homeowners in 2003) as they have billboards in Detroit.

    The consuming public assumes that all data is used to disadvantage them, but it is also used many more times to their advantage. I worked at an auto repair cataloger back when vehicle information was generally freely available, and we used that data to send our VW books only to VW owners, our Jeep books to Jeep owners and our Van books to owners of vans. If you didn’t own the proper vehicle, you weren’t "bothered" by these offers, which to you, were irrelevant. Without vehicle data, catalogers are now forced to spam-mail the entire neighborhood because they no longer have the data for targeted promotions. It increased costs, decreased relevance and forced to cataloger to mail less, meaning owners of VW’s had reduced access to parts for their vehicles. Not targeting disadvantaged consumers whether they were VW owners or not.

    Making personally identifiable data available (via permission) for marketing purpose makes for more relevant communications and ensures that you actually hear about what interests you as a consumer. It empowers the consumer. Someone needs to make the point that data benefits the consumer, not just the marketer.

  • mikewrite

    This kind of misleading over-reach happens when we let big government get too big.

  • Lynndell Epp

    We obviously have too many government bureaucrats if this is what they have time for. It’s kind of like hauling baseball players in front of congress because the government needs to be concerned over whether they’re using steroids. Can you say "Overreach"?