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Question 3:

Discuss why e-marketing con be considered a threat to privacy. Suggest how this threat
can be reduced.

The saying, ‘if you are not paying for the product, you are the product’ is now relevant more
than ever. Today, individuals are surrounded by devices that capture and share digital data on
every aspect of their daily life. With the advent of big data, behavioural analytics and e-
marketing, companies are exploiting consumer data under the guise of improved customer
service and increased personalisation. While the benefit of big data to companies is
undeniable, there are rightful concerns about privacy incursion and invasive marketing. The
existence of federated support networks, prescriptive analytics and algorithmic decision-
making raises further questions about the use, diffusion and protection of consumer data. This
essay draws on existing research to discuss the privacy concerns associated with e-marketing
and how some of these threats can be mitigated. First, we define e-marketing, then we look
at how data is collected from users, how analytic techniques are used to guide decision
making, how these insights are shared between federated support networks and subsequent
privacy implications. Lastly, we look at ways in which some of these threats to privacy can
be alleviated.

E-marketing is firmly rooted in the practice of using big data and analytics to draw insights
into consumers’ behaviours to influence their purchase decision journeys on a deeply
personalised level. Technology used in online marketing has advanced such that collection,
enhancement and aggregation of information is instantaneous (Ashworth and Free, 2006).
This proliferation of customer information focused technology brings with several issues
surrounding customer privacy.

Data, to support e-marketing, is collected from a myriad of sources, ranging from a user’s
internet search history, social media presence, online shopping and ATM withdrawals to use
of location-based weather apps (Newell and Marabelli, 2015). Even seemingly inactive
devices such as AI based virtual assistants like Siri and Alexa are continuously listening onto
users’ conversations, endlessly accumulating and communicating data via feedback
mechanisms. This data is then processed by algorithms that support and drive organisational
decision making (Newell and Marabelli, 2015). Termed ‘algorithmic decision-making’, this
method of analytics collects a user’s ‘digital traces’ from the digitised devices they use, to aid
increased profiling of customers to improve segmentation and targeting. As a result, users
have unknowingly become ‘walking data generators’ (McAfee and Brynjolfsson). This has
enabled companies to price products and services to capitalise on a consumer’s willingness to
pay and maximise their (supplier’s) surplus. It has also enabled them to identify and flag
important events and dates in consumers’ life such that customised offerings can be made to
each individual customer, based on demographic, psychographic and behavioural
segmentation. An example of this is the US supermarket chain Target using Big Data and
being able to identify that a teenager was pregnant and market baby products to a her, even
before her family was aware of it. This has given rise to issues associated with privacy and
control, wherein companies strategically capitalise on and invade into digitised records of
consumers everyday activities.

Furthermore, with the introduction of federated support architectures, competitors share

information amongst themselves to mutually improve services. This knowledge sharing
enables and enhances optimisation, resulting (among other things) in tailored e-marketing
campaigns. However, it is also playing in a dangerously grey area between information
sharing to optimise customer service and violation of privacy as a basic human right.
Additionally, although data maybe anonymised, as discovered by researchers, the overlaying
of multiple sources of data makers it possible to reverse engineer the identity of individuals
and de-anonymise parts of the data set (Zimmer, 2008). This compromises the privacy of
individuals raising ethical questions about a third-party collection, analysis and use of
proprietary and personal information for capital gains.

Since the introduction and use of data analytics is a fairly new concept, there is little
understanding and agreement about the ethical implications that underpin the Big Data
phenomenon (Boyd and Crawford, 2012). There are very fine lines and grey areas
surrounding what is considered public knowledge and what should be regarded as personal
and private information. As a result, unless strong and clear regulations are enforced,
companies can get away with violating privacy under the pretext of market research and
personalization. While governmental organizations are taking steps to acknowledge and
protect their citizen’s right to privacy, such as the introduction of the GDPR regulations in the
EU, more stringent laws need to be enforced, particularly in the context of e-marketing.
In conclusion, like all socio-technical phenomena, the advent of Big Data brings with it both
benefits and costs. The use of Big Data makes e-marketing more profitable for companies and
more relevant and engaging for consumers. However, this also raises ethical questions about
the price at which online advertising is made relevant – What use of personal information is
too much use? What constitutes as accessible information as opposed to invasion of privacy?
Hence, as is with all new innovations, new policies will have to be framed and enforced to
rein in possibilities of exploitation and misuse of Big Data and the privacy of individuals.
Danah Boyd & Kate Crawford (2012) CRITICAL QUESTIONS FOR BIG DATA,
Information, Communication & Society, 15:5, 662-679, DOI: 10.1080/1369118X.2012.678878

Journal of Business Ethics (2006) 67:107–123 _ Springer 2006 DOI 10.1007/s10551-006-9007-7