Target-ing the teen mom: Do Data Mining and Targeted Marketing need its own code of ethics?

New York Times Magazine cover Feb 16, 2012

Case Study: How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did. 

A Minneapolis father walked into his local Target store incensed that the store has mailed his teenage daughter baby coupons.  Outraged, the father demanded to know why Target would promote teenage pregnancy.  The store manager apologized on the spot and followed up with a call a few days later to reiterate the apology.  Instead of getting a hostile father on the phone, this time the manager encountered one who is himself apologetic.  The father explained that Target was right, his teenage daughter was pregnant and due in August.

How did Target know the teen was pregnant?  Data.  In 2002, Target decided that it needed to change the shopping habits of its customers to get them to buy a wider selection of items.  They set off to see if they could do that with pregnant women whose emotions over the impending happy event might sway them from making more considered purchases to more impulse buys.  By analyzing baby registries and the shopping habits of those women, Target was able to build a predictive model.

Slideshare.net: Technoledge Mar 20, 2103

Target assigns each customer a Guest ID based on credit card # or email address.  It then tracks purchases both in store and online.  It will send emails to encourage online shopping and print receipt coupons to trigger brick & mortar purchases.  The more information it has, the more intelligent it can determine which offer will generate the desired response.

These offers are personalized to each shopper to boost sales.  Since customers are getting offers and coupons matched to their own personal shopping habits, this should be a win-win.  Instead, many consumers don’t feel honored that a store knows so much about them, rather they feel creeped out by the violation of privacy.

Slate.com June 9, 2014

In the case of the pregnant teen, the store manager sought to assuage the father by apologizing and offering to look into the matter.  Since the father was unaware that his own daughter was pregnant, his outrage turned into sheepishness.  Should it have though?  Was it a violation of privacy to mail baby product coupons to a teenager?  Or to anyone who hasn’t informed you of their pregnancy?  The store manager focused on the father’s emotion and attempted to use rationality to calm him.  It worked because the father’s emotions were redirected when he discovered the truth.  But just as easily, the father could have objected to his daughter’s privacy being violated.   In that instance, the store manager was ill-equipped to handle it as details of Target’s targeted marketing wasn’t public.

To counter these types of incidents, Target decided to camouflage their targeted offers by mixing in totally irrelevant offers in the mailings.

Source: Sarandipity blog

The example given is that among the baby items would be ads for lawn mowers and wine.  Target felt that expectant mothers then wouldn’t know that they were being targeted and would be more likely to be happy to receive coupons that they could use.  (No outrage over advertising alcohol to pregnant women?  Seems that would raise some eyebrows.) 

While this undoubtedly seemed like a brilliant marketing tactic to Target management, it raises some ethical questions.  Is it acceptable to intentionally deceive the public in order to boost sales?

No.  Target actually created an even bigger risk by hiding their intent.  By not being transparent, people would then wonder what else Target was hiding.  Confucius termed this Everyday Morality: a person who is ethical about little things will be ethical about big things.  The same can be assumed about a corporation.  If they intentionally hide their intent when it comes to offering coupons, are they being fair and honest in other areas?

In “Media Ethics” by Philip Patterson and Lee Wilkins, we learn about various philosophical approaches to ethics.  While data mining and targeted marketing are relatively new, privacy and people’s expectations of privacy are not.  "Philosophers assert that the commodification of private information erodes the core of both individual autonomy and authentic community.” (p. 110-111)

According to Carnegie Mellon University computer science professor Latanya Sweeney, there is no privacy any more with the data being collected.  While companies always claim to be anonymizing the data that is collected, Professor Sweeney proved that with just 3 pieces of data (gender, zip code and date of birth), anonymized data can actually only belong to one individual.  In addition to this loss of privacy, what are other dangers of targeted marketing?

Targeted marketing further serves to divide the populace into class structures.  Harvard political philosopher Michael Sandel opines: “At a time of rising inequality, the marketing of everything means that people of affluence and people of modest means lead increasingly separate lives.”  (Patterson and Wilkins, p. 63)

The slide from Big Data - Marketing Gone Mad? by Technoledge points out how invasive data collection has become and what the purpose of it is. (slideshare.net Mar 20, 2013) 

Codes of ethics already exist for many professions such as Advertising and Public Relations which were covered in previous blog posts.  Should a code of ethics be created for data mining and targeted marketing?  While there are existing privacy laws (which Target very carefully stays within), consumers are still uneasy about how companies collect data and what they do with it.  A new code of ethics should borrow from the PRSA Code of Ethics:

• Preserve the integrity of the process of communication.
• Be honest and accurate in all communications.
• Avoid deceptive practices.
• Safeguard the confidences and privacy rights of present, former, and prospective clients and employees.

And it should leverage the bait & switch guideline from the American Advertising Federation's code of ethics:

• Advertising shall not offer products or services for sale unless such offer constitutes a bona fide effort to sell the advertising products or services and is not a device to switch consumers to other goods or services, usually higher priced.

In general, when building this code, the writers should employ Rawl’s Veil of Ignorance and have the decision makers examine the situation objectively from all points of view.

Dogbert follows an "eye for an eye" philosophy.