Posted September 14, 2010 12:28 am by with 2 comments

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eMarketer posted an interesting statement today that was drawn from a white paper called The Changing Mission of Marketing Data. It’s a pretty extensive report that looks at the shift from old fashioned mailing lists to the online availability of detailed, customer data. It pays particular attention to the amount of money that will be spent on offline vs online marketing in the near future. Those numbers, if you’re curious, go like this:

“By 2012, U.S. marketers will continue to dedicate a steady $7.8 billion to marketing data and associated services, even while the proportion of those budgets commanded by “digital” sources and applications will more than double to represent 10.8 percent of the mix—over $840 million in annual investment.”

Then we throw regulations into the mix. Right now, it’s kind of like the wild west on the WWW. The ones with money have the power and everyone expects everyone else to do what’s right and decent even if there isn’t an actual law to back it up.

The assumption is, that as we move further into this digital world, the government will begin impose stricter laws regarding privacy and how and when online data can be disseminated and used.

Here’s where it gets interesting. Marketers were asked to rate the amount of change they expected to see in their budgets once laws were put in place to halt the flow of private data. The average response was that their spending would stay the same.

Now, let’s think about this. One way to interpret this is that marketers intent to keep spending the same money for less information. That seems ridiculous, doesn’t it? eMarketer says this anomaly could be the result of “clearing the air.” Their theory is that regulation will take the guess work and the fear out of acquiring and using private data, so companies will feel free to take full advantage of legal data knowing that they can’t be sued by consumers.

Honestly? I can’t see marketers working through that kind of logic before they chose the median number 3 on the 1-5 scale. (1 being a decrease in spending, 5 being an increase.)

I may be pessimistic, but I think the answer has simpler roots. I think that online, data-driven marketing is so new that most people are just guessing. They’re throwing everything they have out there hoping something will stick and regulations aren’t going to change that. Not right away.

Remember the game show scandals of the 50’s? The government got involved when they found out that the  producers of Twenty-One had supplied the answers to the contestants in order to make the game show more dramatic. It may have been morally wrong, but it wasn’t illegal. The producers were just trying to make a buck. The government passed a law that made fixing quiz shows illegal, but did that stop anyone from pouring money into the genre? No. Game shows continued to flourish and I’d bet that many of them still found ways to rig the games and not get caught.

My point is, that when it comes to making a dollar we don’t let a little thing like government regulations stand in our way. So when marketers say that they’ll keep on spending even if the government blocks the sale of private data, what they’re really saying is, they’ll find another way. Not necessarily an illegal way, but certainly there are enough technological advances coming down the pike that will keep the courts rushing to catch up for a good long time.

What do you think? Are you concerned about the government regulation of private data? Why or why not?

  • You are right that the Internet is still in the wild wild west stage – but I see a new sheriff coming into town.

    The problems that China and Germany have with control of information and privacy issues as well as the “stalk me now” dangers of GPS is just the tip of the iceberg.

    If, being the middle word in life, everybody was respectful of each others’ rights then we would probably not need a sheriff – but human nature seems to say otherwise.

    The U.S. Government already has access to tons of digital information – and their digitized census data will integrate well with the huge amount of data online.

    The government will regulate the Internet, it will become more professional, and the people with the money and resources to pay – will win, again.

    A more regulated Internet will allow marketers the ability to know what to expect when they spend – and they will spend to reach their audience.

  • Nice post!