Welcome to a new DMA Advance blog series, The Plain Facts. This Q&A style series of brief posts aims to highlight the value of data-driven marketing to consumers and brands. If you have an idea for a question, or would like to be featured, please just contact the editor.
We live in a data-driven world. The use of data has transformed every aspect of our lives, from our quest for free hotel rooms to the nightly weather reports on our smartphones. But as data usage has expanded, our expectations for its protection and use have also heightened.
This DMA Advance series serves to present the plain facts about marketing data – to clarify this part of the vast data universe, and bring it into perspective for the average consumer.
Each week, a common question about the collection and use of marketing data will be addressed — what marketers know and don’t know about consumers, how they use data to enhance the buying experience, how consumers can set their own preferences, and much more – to make the process of data-driven marketing more transparent, and show how it strives to serve today’s consumers. Our first post looks at online consumer data.
Question: What data do marketers collect online about consumers, and how do they use that data?
Answer: Marketing companies collect public data about consumers’ preferences online, such as when a purchase is made or a sign-up for a service is completed. Marketers use that data to present customers with special offers, rewards, or suggestions for future purchases. For example:
- A customer who buys a sweater at a fashion site and gives that site her email address might receive a 15%-off coupon on a similar style in a personalized email message.
- A customer who buys a book online might find a Suggested Reading list at the book site the next time he visits.
Marketing data is used for marketing purposes only. The marketing data is aggregated electronically, and grouped based on classifications — such as current or past purchases — and the result is relevant ads customized to each consumer. Consumers can opt out of receiving these special offers, such as email alerts, at any time, by hitting an unsubscribe link in an email, or setting preferences at a website. Ethical websites honor their customers’ preferences. It’s in the best interest of marketers to honor consumer preferences – it builds trust, and messages sent to consumers who don’t want to receive them are not cost-effective for marketers.
DMA has established strict industry standards for the responsible use of marketing data, both online and offline. Its Guidelines for Ethical Business Practice provide a framework for the collection and use of consumer data across channels and situations. DMA requires that all its member companies abide by these Guidelines, and punishes those found to not be in compliance. Learn more about DMA’s ethical standards at thedma.org/compliance.