The Trade-off Fallacy: How Marketers are Misrepresenting American Consumers and Opening Them up to Exploitation

I have decided, in light of the shocking disclosures about Facebook which have come to light during the past few days, to share some of the content from a Digital Marketing Report, a monthly newsletter for digital marketing professionals we published for two years (May 2015 through May 2017).

For various reasons I made the decision in 2017 to stop publishing the report. One of the reasons, admittedly, was disappointing subscription numbers. But, as I suspected then and now, many (not all) digital marketing professionals are not concerned with the moral and ethical aspects of what they do. Rather, they focus unwaveringly on the money they make.

I knew then, and I know now, that most people do not understand how much information various companies are collecting–and selling to anyone who comes up with the cash–about what people do and say online. While there are benign uses for such data, there are some very sinister and even evil uses. I hope, in the coming months and years, this knowledge will spread widely, and people will demand the situation change dramatically.

Enough preaching for now…here a few of the statements from the article.

Editor’s note: in June 2015, the Annenberg School for Communication, which is part of the University of Pennsylvania, published a report entitled  The Trade-off Fallacy: How Marketers are Misrepresenting American Consumers and Opening Them up to Exploitation. The basis for the report,written by three respected and well-known professors, is survey results from discussions with more than 1,500 adult consumers in the United States.

New Annenberg survey results indicate marketers are misrepresenting a large majority of Americans by claiming Americans give out information about themselves as a trade-off for benefits they receive. To the contrary, the survey reveals most Americans do not believe “data for discounts” is a square deal.

It is evident the amount of information marketers have already collected is enormous. For example, the Forrester Research consultancy estimated in 2014 database marketing firm Acxiom has about 1,500 data points for each of over 500 million active Internet users, most of them in the United States. Another 2014 Forrester report looked to not-too-distant circumstances where marketers would routinely make decisions based on “a customer’s circle of social relationships and influencers…sensor data [from in-store technologies], streaming real-time data, acquired data [from firms such as Acxiom]…anything.”

We also found widespread suspicion: 72% of Americans reject the idea “what companies know about me from my behavior online cannot hurt me.” When we combined the people who are resigned with those who believe what firms know can hurt them, we found 41% of Americans are not only resigned, they hold a dark concern the basic dynamics of the emerging marketplace will cause them injury—and that they cannot control it.

Marketing and retailing executives have typically played down any concerns about their use of shopper data. One way has been to depict an empowered public accepting the notion it is releasing data willingly as a trade-off for benefits it receives. Our survey challenges marketers’ typical cost-benefit analysis defense by showing quite clearly most Americans do not accept the fairness of getting discounts in trade for their data.

Please read and share with others this post and the full Annenberg School for Communication report, located here: https://www.asc.upenn.edu/sites/default/files/TradeoffFallacy_1.pdf