Feature
The Gist
- Targeted advertising. CMG's "Active Listening" raises privacy concerns in ad targeting.
- Consumer perspectives. Lack of consensus among consumers on privacy and targeted ads.
- Legal vs. ethical. CMG's practices legal but raise ethical questions in the advertising industry.
In the current landscape of technological innovation, there’s a critical conversation emerging that’s impossible to ignore, especially for those at the helm of corporate strategy and customer experience when it comes to targeted advertising. Where do we draw the line between harnessing technology for business growth and respecting the privacy of our customers?
Building Trust With Customers
This is more than just a debate about privacy; it’s about the trust we build with our customers. One of the many challenges in navigating this particular privacy issue is a lack of consensus even among consumers, says Mark Nardone, chief marketing officer at PAN Communications. “You’ll encounter people who see this as a real breach of privacy, and you’ll also encounter people who couldn’t care less.”
Related Article: When It Comes to Customer Experience, the Days of Targeted Advertising Are Numbered
Targeted Advertising: CMG 'Active Listening' Claims Spark Backlash
CMG, associated with one of the largest cable companies in the U.S., has claimed it can listen to consumer conversations through smartphones, smart speakers, smart TVs, and other devices for targeted advertising. This controversial practice, which CMG terms "Active Listening," has raised significant concerns about privacy and the extent of eavesdropping by marketing and advertising companies.
In a Nov. 28 blog post initially highlighted by 404 Media, CMG Local Solutions' discussed its Active Listening marketing solution where it can customize a campaign "to listen for any keywords/targets relevant to your business." The blog post, which was later removed, asked marketers to "Imagine a world where you can read minds. One where you know the second someone in your area is concerned about mold in their closet, where you have access to a list of leads who are unhappy with their current contractor, or know who is struggling to pick the perfect fine dining restaurant to propose to their discerning future fiancé."
Related Article: Programmatic Advertising for Highly Personalized, Targeted Marketing
Whispered Secrets Can Become Ads
Most frighteningly, CMG Local Solutions underscored that "This is a world where no pre-purchase murmurs go unanalyzed, and the whispers of consumers become a tool for you to target, retarget, and conquer your local market." An archived version of the blog, shown below, can be seen at Archive.org.
CMG is part of a media empire encompassing television and radio stations, including 14 TV stations, 52 radio stations, a news bureau, and several streaming and digital platforms. It asserts that its technology is able to gather data from conversations picked up by device microphones. According to the CMG blog post as shown below, this practice is legal, purportedly covered under the terms of service agreed upon by consumers when purchasing new devices.
Is It Legal?
The rationale is that smart assistants necessitate devices to be always listening, and this data collection is supposedly beneficial for both consumers and businesses. The potential positive side of this for consumers — privacy concerns aside — is that it could mean fewer irrelevant ads, while businesses could more accurately target potential customers.
CMG’s "Active Listening" claims to create customer profiles based on overheard conversations, and then uses AI to fine-tune targeted advertising. The process described involves setting up specific areas for business growth and receiving real-time notifications when potential customers express relevant needs or interests.
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CMG responded to the concerns raised by its blog by stating that it does not directly listen to conversations, but instead obtains them from:
“third-party vendor products powered by data sets sourced from users by various social media and other applications then packaged and resold to data servicers. Advertising data based on voice and other data is collected by these platforms and devices under the terms and conditions provided by those apps and accepted by their users, and can then be sold to third-party companies and converted into anonymized information for advertisers."
The media company did not disclose who those third-party vendors are, leading to speculation falling toward the leading tech industry titans.
Related Article: Contextual Targeting vs. Cookies: Who Will Win in 2024?
It’s Legal but Is It Ethical?
Regardless, CMG claims that what it does is legal, the practice brings into question the legality of those third-party businesses that are collecting and selling the data to advertisers, as well as the morality of any advertiser that would use them.
“The regulations don’t go far enough, and they may never go far enough if brands don’t apply pressure on one another to do what’s right and not just what’s allowed,” says Nardone.
In today’s market, where we get and how we use customer data needs to be transparent in order to build trust and foster loyalty with our customers. However this capability definitely falls into the creepy category.
Marketers’ Obligation to Customers
“This is very concerning," said Michael Gerard, chief marketing officer at Morphisec. "As marketers, there is no question that we have a moral obligation to our current and future customers, and listening in on and leveraging consumer conversations crosses the line."
Although there have been many reports to the contrary, Amazon, for one, has continuously reiterated that it does not sell voice data to third parties. There has been very little response to the CMG snooping scandal from industry leaders such as Google, Amazon and Microsoft thus far, but with privacy concerns so often in the media spotlight, their silence has been deafening.
Complex Data Privacy Considerations
The implications of leveraging consumer conversation data for targeted advertising presents a complex set of considerations around data privacy, transparency and ethical marketing. CX leaders striving to build consumer trust and loyalty, must refrain from intrusive practices that overreach. “What we risk eventually, if we can’t get control of these sorts of practices, is a total erosion of trust with the customer. Strategies that prioritize loyalty, advocacy, community — those will give way to a much more transactional approach,” says Nardone. Brands will potentially lose their identity, reputation and values.
Looking Ahead
In the long term pressure will mount to employ such capabilities as competitors potentially gain advantage. Navigating these waters will require clear organizational guidelines grounded in ethical and moral wisdom. What consumers are willing to openly share versus what can be subtly extracted through advanced means should guide our customer data policies.
The customer perception landscape is shifting as privacy concerns escalate; proactive brands embracing ethical data usage will earn rewards of reputation and relationship even if short-term gains from targeted advertising are sacrificed. In the end, doing right by the consumer when no one is watching remains the wisest long-term strategy.
How do you feel about your devices listening to your conversations and then sharing them?
