Entries Tagged "marketing"
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This article talks about new Mexican laws about food labeling, and the lengths to which food manufacturers are going to ensure that they are not effective. There are the typical high-pressure lobbying tactics and lawsuits. But there’s also examples of companies hacking the laws:
Companies like Coca-Cola and Kraft Heinz have begun designing their products so that their packages don’t have a true front or back, but rather two nearly identical labels—except for the fact that only one side has the required warning. As a result, supermarket clerks often place the products with the warning facing inward, effectively hiding it.
Other companies have gotten creative in finding ways to keep their mascots, even without reformulating their foods, as is required by law. Bimbo, the international bread company that owns brands in the United States such as Entenmann’s and Takis, for example, technically removed its mascot from its packaging. It instead printed the mascot on the actual food product—a ready to eat pancake—and made the packaging clear, so the mascot is still visible to consumers.
Rolling Stone is reporting that the UK government has hired the M&C Saatchi advertising agency to launch an anti-encryption advertising campaign. Presumably they’ll lean heavily on the “think of the children!” rhetoric we’re seeing in this current wave of the crypto wars. The technical eavesdropping mechanisms have shifted to client-side scanning, which won’t actually help—but since that’s not really the point, it’s not argued on its merits.
The Norwegian Consumer Council just published a fantastic new report: “Time to Ban Surveillance-Based Advertising.” From the Introduction:
The challenges caused and entrenched by surveillance-based advertising include, but are not limited to:
- privacy and data protection infringements
- opaque business models
- manipulation and discrimination at scale
- fraud and other criminal activity
- serious security risks
In the following chapters, we describe various aspects of these challenges and point out how today’s dominant model of online advertising is a threat to consumers, democratic societies, the media, and even to advertisers themselves. These issues are significant and serious enough that we believe that it is time to ban these detrimental practices.
A ban on surveillance-based practices should be complemented by stronger enforcement of existing legislation, including the General Data Protection Regulation, competition regulation, and the Unfair Commercial Practices Directive. However, enforcement currently consumes significant time and resources, and usually happens after the damage has already been done. Banning surveillance-based advertising in general will force structural changes to the advertising industry and alleviate a number of significant harms to consumers and to society at large.
A ban on surveillance-based advertising does not mean that one can no longer finance digital content using advertising. To illustrate this, we describe some possible ways forward for advertising-funded digital content, and point to alternative advertising technologies that may contribute to a safer and healthier digital economy for both consumers and businesses.
I signed their open letter.
Persuasion is as old as our species. Both democracy and the market economy depend on it. Politicians persuade citizens to vote for them, or to support different policy positions. Businesses persuade consumers to buy their products or services. We all persuade our friends to accept our choice of restaurant, movie, and so on. It’s essential to society; we couldn’t get large groups of people to work together without it. But as with many things, technology is fundamentally changing the nature of persuasion. And society needs to adapt its rules of persuasion or suffer the consequences.
Democratic societies, in particular, are in dire need of a frank conversation about the role persuasion plays in them and how technologies are enabling powerful interests to target audiences. In a society where public opinion is a ruling force, there is always a risk of it being mobilized for ill purposes—such as provoking fear to encourage one group to hate another in a bid to win office, or targeting personal vulnerabilities to push products that might not benefit the consumer.
In this regard, the United States, already extremely polarized, sits on a precipice.
There have long been rules around persuasion. The US Federal Trade Commission enforces laws that claims about products “must be truthful, not misleading, and, when appropriate, backed by scientific evidence.” Political advertisers must identify themselves in television ads. If someone abuses a position of power to force another person into a contract, undue influence can be argued to nullify that agreement. Yet there is more to persuasion than the truth, transparency, or simply applying pressure.
Persuasion also involves psychology, and that has been far harder to regulate. Using psychology to persuade people is not new. Edward Bernays, a pioneer of public relations and nephew to Sigmund Freud, made a marketing practice of appealing to the ego. His approach was to tie consumption to a person’s sense of self. In his 1928 book Propaganda, Bernays advocated engineering events to persuade target audiences as desired. In one famous stunt, he hired women to smoke cigarettes while taking part in the 1929 New York City Easter Sunday parade, causing a scandal while linking smoking with the emancipation of women. The tobacco industry would continue to market lifestyle in selling cigarettes into the 1960s.
Emotional appeals have likewise long been a facet of political campaigns. In the 1860 US presidential election, Southern politicians and newspaper editors spread fears of what a “Black Republican” win would mean, painting horrific pictures of what the emancipation of slaves would do to the country. In the 2020 US presidential election, modern-day Republicans used Cuban Americans’ fears of socialism in ads on Spanish-language radio and messaging on social media. Because of the emotions involved, many voters believed the campaigns enough to let them influence their decisions.
The Internet has enabled new technologies of persuasion to go even further. Those seeking to influence others can collect and use data about targeted audiences to create personalized messaging. Tracking the websites a person visits, the searches they make online, and what they engage with on social media, persuasion technologies enable those who have access to such tools to better understand audiences and deliver more tailored messaging where audiences are likely to see it most. This information can be combined with data about other activities, such as offline shopping habits, the places a person visits, and the insurance they buy, to create a profile of them that can be used to develop persuasive messaging that is aimed at provoking a specific response.
Our senses of self, meanwhile, are increasingly shaped by our interaction with technology. The same digital environment where we read, search, and converse with our intimates enables marketers to take that data and turn it back on us. A modern day Bernays no longer needs to ferret out the social causes that might inspire you or entice you—you’ve likely already shared that by your online behavior.
Some marketers posit that women feel less attractive on Mondays, particularly first thing in the morning—and therefore that’s the best time to advertise cosmetics to them. The New York Times once experimented by predicting the moods of readers based on article content to better target ads, enabling marketers to find audiences when they were sad or fearful. Some music streaming platforms encourage users to disclose their current moods, which helps advertisers target subscribers based on their emotional states.
The phones in our pockets provide marketers with our location in real time, helping deliver geographically relevant ads, such as propaganda to those attending a political rally. This always-on digital experience enables marketers to know what we are doing—and when, where, and how we might be feeling at that moment.
All of this is not intended to be alarmist. It is important not to overstate the effectiveness of persuasive technologies. But while many of them are more smoke and mirrors than reality, it is likely that they will only improve over time. The technology already exists to help predict moods of some target audiences, pinpoint their location at any given time, and deliver fairly tailored and timely messaging. How far does that ability need to go before it erodes the autonomy of those targeted to make decisions of their own free will?
Right now, there are few legal or even moral limits on persuasion—and few answers regarding the effectiveness of such technologies. Before it is too late, the world needs to consider what is acceptable and what is over the line.
For example, it’s been long known that people are more receptive to advertisements made with people who look like them: in race, ethnicity, age, gender. Ads have long been modified to suit the general demographic of the television show or magazine they appear in. But we can take this further. The technology exists to take your likeness and morph it with a face that is demographically similar to you. The result is a face that looks like you, but that you don’t recognize. If that turns out to be more persuasive than coarse demographic targeting, is that okay?
Another example: Instead of just advertising to you when they detect that you are vulnerable, what if advertisers craft advertisements that deliberately manipulate your mood? In some ways, being able to place ads alongside content that is likely to provoke a certain emotional response enables advertisers to do this already. The only difference is that the media outlet claims it isn’t crafting the content to deliberately achieve this. But is it acceptable to actively prime a target audience and then to deliver persuasive messaging that fits the mood?
Further, emotion-based decision-making is not the rational type of slow thinking that ought to inform important civic choices such as voting. In fact, emotional thinking threatens to undermine the very legitimacy of the system, as voters are essentially provoked to move in whatever direction someone with power and money wants. Given the pervasiveness of digital technologies, and the often instant, reactive responses people have to them, how much emotion ought to be allowed in persuasive technologies? Is there a line that shouldn’t be crossed?
Finally, for most people today, exposure to information and technology is pervasive. The average US adult spends more than eleven hours a day interacting with media. Such levels of engagement lead to huge amounts of personal data generated and aggregated about you—your preferences, interests, and state of mind. The more those who control persuasive technologies know about us, what we are doing, how we are feeling, when we feel it, and where we are, the better they can tailor messaging that provokes us into action. The unsuspecting target is grossly disadvantaged. Is it acceptable for the same services to both mediate our digital experience and to target us? Is there ever such thing as too much targeting?
The power dynamics of persuasive technologies are changing. Access to tools and technologies of persuasion is not egalitarian. Many require large amounts of both personal data and computation power, turning modern persuasion into an arms race where the better resourced will be better placed to influence audiences.
At the same time, the average person has very little information about how these persuasion technologies work, and is thus unlikely to understand how their beliefs and opinions might be manipulated by them. What’s more, there are few rules in place to protect people from abuse of persuasion technologies, much less even a clear articulation of what constitutes a level of manipulation so great it effectively takes agency away from those targeted. This creates a positive feedback loop that is dangerous for society.
In the 1970s, there was widespread fear about so-called subliminal messaging, which claimed that images of sex and death were hidden in the details of print advertisements, as in the curls of smoke in cigarette ads and the ice cubes of liquor ads. It was pretty much all a hoax, but that didn’t stop the Federal Trade Commission and the Federal Communications Commission from declaring it an illegal persuasive technology. That’s how worried people were about being manipulated without their knowledge and consent.
It is time to have a serious conversation about limiting the technologies of persuasion. This must begin by articulating what is permitted and what is not. If we don’t, the powerful persuaders will become even more powerful.
This essay was written with Alicia Wanless, and previously appeared in Foreign Policy.
EDITED TO ADD: Ukrainian translation.
Motherboard has a long article on apps—Edison, Slice, and Cleanfox—that spy on your email by scraping your screen, and then sell that information to others:
Some of the companies listed in the J.P. Morgan document sell data sourced from “personal inboxes,” the document adds. A spokesperson for J.P. Morgan Research, the part of the company that created the document, told Motherboard that the research “is intended for institutional clients.”
That document describes Edison as providing “consumer purchase metrics including brand loyalty, wallet share, purchase preferences, etc.” The document adds that the “source” of the data is the “Edison Email App.”
A dataset obtained by Motherboard shows what some of the information pulled from free email app users’ inboxes looks like. A spreadsheet containing data from Rakuten’s Slice, an app that scrapes a user’s inbox so they can better track packages or get their money back once a product goes down in price, contains the item that an app user bought from a specific brand, what they paid, and an unique identification code for each buyer.
Siena Anstis, Ronald J. Deibert, and John Scott-Railton of Citizen Lab published an editorial calling for regulating the international trade in commercial surveillance systems until we can figure out how to curb human rights abuses.
Any regime of rigorous human rights safeguards that would make a meaningful change to this marketplace would require many elements, for instance, compliance with the U.N. Guiding Principles on Business and Human Rights. Corporate tokenism in this space is unacceptable; companies will have to affirmatively choose human rights concerns over growing profits and hiding behind the veneer of national security. Considering the lies that have emerged from within the surveillance industry, self-reported compliance is insufficient; compliance will have to be independently audited and verified and accept robust measures of outside scrutiny.
The purchase of surveillance technology by law enforcement in any state must be transparent and subject to public debate. Further, its use must comply with frameworks setting out the lawful scope of interference with fundamental rights under international human rights law and applicable national laws, such as the “Necessary and Proportionate” principles on the application of human rights to surveillance. Spyware companies like NSO Group have relied on rubber stamp approvals by government agencies whose permission is required to export their technologies abroad. To prevent abuse, export control systems must instead prioritize a reform agenda that focuses on minimizing the negative human rights impacts of surveillance technology and that ensures—with clear and immediate consequences for those who fail—that companies operate in an accountable and transparent environment.
Finally, and critically, states must fulfill their duty to protect individuals against third-party interference with their fundamental rights. With the growth of digital authoritarianism and the alarming consequences that it may hold for the protection of civil liberties around the world, rights-respecting countries need to establish legal regimes that hold companies and states accountable for the deployment of surveillance technology within their borders. Law enforcement and other organizations that seek to protect refugees or other vulnerable persons coming from abroad will also need to take digital threats seriously.
When Mark Zuckerberg testified before both the House and the Senate last month, it became immediately obvious that few US lawmakers had any appetite to regulate the pervasive surveillance taking place on the Internet.
Right now, the only way we can force these companies to take our privacy more seriously is through the market. But the market is broken. First, none of us do business directly with these data brokers. Equifax might have lost my personal data in 2017, but I can’t fire them because I’m not their customer or even their user. I could complain to the companies I do business with who sell my data to Equifax, but I don’t know who they are. Markets require voluntary exchange to work properly. If consumers don’t even know where these data brokers are getting their data from and what they’re doing with it, they can’t make intelligent buying choices.
This is starting to change, thanks to a new law in Vermont and another in Europe. And more legislation is coming.
Vermont first. At the moment, we don’t know how many data brokers collect data on Americans. Credible estimates range from 2,500 to 4,000 different companies. Last week, Vermont passed a law that will change that.
The law does several things to improve the security of Vermonters’ data, but several provisions matter to all of us. First, the law requires data brokers that trade in Vermonters’ data to register annually. And while there are many small local data brokers, the larger companies collect data nationally and even internationally. This will help us get a more accurate look at who’s in this business. The companies also have to disclose what opt-out options they offer, and how people can request to opt out. Again, this information is useful to all of us, regardless of the state we live in. And finally, the companies have to disclose the number of security breaches they’ve suffered each year, and how many individuals were affected.
Admittedly, the regulations imposed by the Vermont law are modest. Earlier drafts of the law included a provision requiring data brokers to disclose how many individuals’ data it has in its databases, what sorts of data it collects and where the data came from, but those were removed as the bill negotiated its way into law. A more comprehensive law would allow individuals to demand to exactly what information they have about them—and maybe allow individuals to correct and even delete data. But it’s a start, and the first statewide law of its kind to be passed in the face of strong industry opposition.
Vermont isn’t the first to attempt this, though. On the other side of the country, Representative Norma Smith of Washington introduced a similar bill in both 2017 and 2018. It goes further, requiring disclosure of what kinds of data the broker collects. So far, the bill has stalled in the state’s legislature, but she believes it will have a much better chance of passing when she introduces it again in 2019. I am optimistic that this is a trend, and that many states will start passing bills forcing data brokers to be increasingly more transparent in their activities. And while their laws will be tailored to residents of those states, all of us will benefit from the information.
A 2018 California ballot initiative could help. Among its provisions, it gives consumers the right to demand exactly what information a data broker has about them. If it passes in November, once it takes effect, lots of Californians will take the list of data brokers from Vermont’s registration law and demand this information based on their own law. And again, all of us—regardless of the state we live in—will benefit from the information.
We will also benefit from another, much more comprehensive, data privacy and security law from the European Union. The General Data Protection Regulation (GDPR) was passed in 2016 and took effect on 25 May. The details of the law are far too complex to explain here, but among other things, it mandates that personal data can only be collected and saved for specific purposes and only with the explicit consent of the user. We’ll learn who is collecting what and why, because companies that collect data are going to have to ask European users and customers for permission. And while this law only applies to EU citizens and people living in EU countries, the disclosure requirements will show all of us how these companies profit off our personal data.
It has already reaped benefits. Over the past couple of weeks, you’ve received many e-mails from companies that have you on their mailing lists. In the coming weeks and months, you’re going to see other companies disclose what they’re doing with your data. One early example is PayPal: in preparation for GDPR, it published a list of the over 600 companies it shares your personal data with. Expect a lot more like this.
Surveillance is the business model of the Internet. It’s not just the big companies like Facebook and Google watching everything we do online and selling advertising based on our behaviors; there’s also a large and largely unregulated industry of data brokers that collect, correlate and then sell intimate personal data about our behaviors. If we make the reasonable assumption that Congress is not going to regulate these companies, then we’re left with the market and consumer choice. The first step in that process is transparency. These new laws, and the ones that will follow, are slowly shining a light on this secretive industry.
This essay originally appeared in the Guardian.
Interesting research: “Long-term market implications of data breaches, not,” by Russell Lange and Eric W. Burger.
Abstract: This report assesses the impact disclosure of data breaches has on the total returns and volatility of the affected companies’ stock, with a focus on the results relative to the performance of the firms’ peer industries, as represented through selected indices rather than the market as a whole. Financial performance is considered over a range of dates from 3 days post-breach through 6 months post-breach, in order to provide a longer-term perspective on the impact of the breach announcement.
- While the difference in stock price between the sampled breached companies and their peers was negative (1.13%) in the first 3 days following announcement of a breach, by the 14th day the return difference had rebounded to + 0.05%, and on average remained positive through the period assessed.
- For the differences in the breached companies’ betas and the beta of their peer sets, the differences in the means of 8 months pre-breach versus post-breach was not meaningful at 90, 180, and 360 day post-breach periods.
- For the differences in the breached companies’ beta correlations against the peer indices pre- and post-breach, the difference in the means of the rolling 60 day correlation 8 months pre- breach versus post-breach was not meaningful at 90, 180, and 360 day post-breach periods.
- In regression analysis, use of the number of accessed records, date, data sensitivity, and malicious versus accidental leak as variables failed to yield an R2 greater than 16.15% for response variables of 3, 14, 60, and 90 day return differential, excess beta differential, and rolling beta correlation differential, indicating that the financial impact on breached companies was highly idiosyncratic.
- Based on returns, the most impacted industries at the 3 day post-breach date were U.S. Financial Services, Transportation, and Global Telecom. At the 90 day post-breach date, the three most impacted industries were U.S. Financial Services, U.S. Healthcare, and Global Telecom.
The market isn’t going to fix this. If we want better security, we need to regulate the market.
Websites are sending information prematurely:
This is important because it goes against what people expect:
In yesterday’s report on Acurian Health, University of Washington law professor Ryan Calo told Gizmodo that giving users a “send” or “submit” button, but then sending the entered information regardless of whether the button is pressed or not, clearly violates a user’s expectation of what will happen. Calo said it could violate a federal law against unfair and deceptive practices, as well as laws against deceptive trade practices in California and Massachusetts. A complaint on those grounds, Calo said, “would not be laughed out of court.”
This kind of thing is going to happen more and more, in all sorts of areas of our lives. The Internet of Things is the Internet of sensors, and the Internet of surveillance. We’ve long passed the point where ordinary people have any technical understanding of the different ways networked computers violate their privacy. Government needs to step in and regulate businesses down to reasonable practices. Which means government needs to prioritize security over their own surveillance needs.
Sidebar photo of Bruce Schneier by Joe MacInnis.