Consumers seem to keep big brother at arm's length, for now

A growing number of software and social media companies have developed tools to help advertisers target consumers based on the physical location of those prospective shoppers (among these are Google, Facebook, Foursquare, Gowalla, and Shopkick). But a story in today’s New York Times indicates that people have been slow to “opt-in” to location-based advertising, at least for now. Click here to read the story.

In yesterday’s edition of the paper, another story explored people’s reaction to “re-targeting” campaigns; web ads that are served to Internet users based on their recent browsing activity (especially when they have drilled-down on an offer but then decided against). Click here to read that story.

Implications: Both of these platforms have two significant challenges to overcome. First, consumers are still a little creeped-out by the idea that “Big Brother is watching” at all times. Second—and this is the one that makes people uncomfortable about being watched—consumers fear companies will use these new powers to serve their own interests, instead of using it to enhance their service to customers.

In the re-targeting story, a woman explained how she was stalked by shoes after looking at them online. How long can it be before websites or brands are “outed” for using these annoying tactics… where a product perused results in a person pursued… sometimes to an annoying extent?

Don’t get me wrong: I am confident that behavioral targeting tactics will grow and prosper in the future. But geo-targeting and re-targeting—like any other marketing tactic—must be used to the mutual advantage of the company and the consumer, lest the advertiser risk alienation over customer acquisition.

Would I appreciate a coupon arriving on my smart phone as I walk by a coffee shop? Sure. But not as much as I would despise that coffee shop for spamming me with offers thereafter. Some of these new technologies might less helpful in building trust... and more helpful in leveraging the trust you have built in other ways.

Mike Anderson