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  • Published on: 14th September 2019
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Jennifer Kelleher

Professor Walker

Marketing 350

8 October 2018

Breaking Down Data Brokering

In a world that thrives on the concept that information is power, data brokering is a million dollar business. While Internet users go about their daily online interactions (shopping, emailing, social networking, video streaming, etc.), data brokers are watching with a microscope. They proceed to take users' activities, personal information and preferences to build their enormous database. This database is has a big price tag because of the thorough consumer information and demographics that it offers. It also teaches companies how to best appeal to the audience that they are targeting, thus maximizing their advertising budget. The ethical issue is that because the data brokers do not have a direct relationship with the consumers, the consumers are usually unaware that their information is being collected. In the rare case that consumers are aware, they don't have much control over or access to it. According to the text, data mining harms consumers whether consent is granted or not, but companies like Nielsen, persuade the public that the benefits of their service outweigh the consequences of their invasive research.

Since the 1920s, Nielsen has been in the business of data analytics; providing “the currency” of the industry in the form of ratings. Since launching nearly 90 years ago, their approach has remained the same: “to help clients around the world understand what's happening now, what's happening next, and how to best act on this knowledge” (“About Us”).  The advancement of technology and media, especially over the last 15 years, has allowed analysts to investigate data on a much deeper level than every before. Nielsen now covers 90% of the global population. The firm puts a positive spin on their invasive services by emphasizing how vital it is “to have an accurate read on [their] consumers” (“How We Measure”).

Engineer, Arthur C. Nielsen, started his research business and conducted his first market research study in 1923. By 1929, Nielsen had conducted research studies in industrial and consumer markets. 10 years after its launch, Nielsen introduced indexes to assess sales at department, grocery, and drug stores. They also formed a service team to provide assistance to clients. In 1935, the engineer invented a market share concept where auditors observe sales patterns on store shelves. Just a year later, the company launched its General Store Index and acquired the rights to a radio device known as the Audimeter. The device attaches to a radio system to record when it is powered on and what station it is tuned to at a given time. In 1938, Nielsen launched their liquor index. By 1941, the company had grown so much that they to double the size of their existing U.S. Headquarters. The next year, the Nielsen Radio Index made its official debut in the United States. Nielsen quickly made a name for themselves in the radio industry and moved into the television space in 1950. Flash forward 78 years, Nielsen has “pioneered audience measurement techniques for TV, music, radio and magazine audiences which [are now] industry standard.”

According to Nielsen's online training platform, “with the advent of mobile technology, consumers have more touchpoints than ever. And the rapidly expanding mobile environment offers marketers even more consumer insights.” The company organizes consumer media into five different categories: video, text, audio, content and ads. Content is defined as the (television show, news article, music playlist, etc.) that an audience is consuming. Advertisements are any kind of paid messaging. As a consumer, it can be very overwhelming to be inundated by advertising. Like media, advertising comes in multiple forms: linear and dynamic. Linear advertising refers to “an ad (or series of ads) [that] is/are delivered to an audience in a set order at a set time determined by the media owner (“Ad Models”).” When advertisers use the linear strategy, all consumers in the target market are exposed to the same ad at the same time. In contrast, dynamic advertising is specifically curated to appeal to a specific audience. Dynamic advertising is where Nielsen's database comes into play. By purchasing a data broker's database, a company is able to specifically focus on a specific demographic. If the company is selling almond milk, for example, the advertising company can reach out to those who exhibit non-dairy preferences. Everything from Pinterest recipes to grocery store rewards programs can track trends like milk preference. The online landscape gives advertisers the capability to plug in a users name or other personalized information, which is supposed to make the consumer feel special.

Kahneman's prospect theory discusses the concept that “when we looked at our choices for bad options, we quickly realized that we were just as risk seeking in the domain of losses as we were risk averse in the domain of gains” (Kahneman 105).  The theory assumes that consumers value gains and losses differently, typically focusing more on perceived gains. Nielsen uses this theory to persuade the public that while they do collect and package personal information, their in-depth research allows advertisers to best serves consumers. Therefore, the risk that consumers take by surrendering their information has less weight than the benefits of receiving the personalized advertising experience that data collection can provide.  Consumers frequently use this theory when making purchasing decisions. But when it comes to data mining, like the research and collection that Nielsen does, consumers don't directly have a say. By providing their information online in some capacity, consumers are opening themselves up companies like Nielsen. Nielsen plays a major part in the success of the media industry because of their world-class ability to collect data and provide valuable insights. Their ratings system gives clients insight into their actual reach, or exposure. Specifically, Nielsen Ratings break down the percentage of the population that is “exposed to a particular piece of content or advertisement in an average minute … Ratings allow buyers and sellers to understand who is consuming content and ads across platforms” (“What are Ratings?). These insights help to inform future dynamic advertising initiatives.

When it comes to Internet activity, users tend to overlook the privacy features that are offered now. Users leave a very personal footprint on sites like Instagram, Facebook, Twitter, Snapchat, Tumblr, and Google. On Instagram, active users provide a look into the most captivating moments in their lives. They reveal their preferences, likes and dislikes through their interactive identity. Facebook invites visitors further into users' personal lives. Google breaks down users' every interest. Nielsen's ability to access and use all of this information seems extremely intrusive, but the company holds that their purpose is to help businesses improve the consumer experience overall. They do this by developing “dossiers on individuals which can be used to tailor marketing. Data brokers typically place consumers in categories based on their age, ethnicity, education level, income, number of children, and interests. Companies purchase lists of names, email addresses, interests and offline activity to assist in soliciting or marketing to those individuals. These sites can be used to better tailor marketing, offering consumers great deals or personally tailored discounts or coupons” (What Are 'Data Brokers,' and Why Are They Scooping Up Information About You?). Nielsen's “tech-based approach allows [them] to count each and every time a piece of content or ad is served to a consumer on a digital device. Nielsen is able to do this by collecting tags placed on pieces of content or ads that are served digitally” (“Census-Based Measurement”). In contrast to other data brokers like Experian and Acxiom, Nielsen draws more tech information than personal information. While they initially collect general, publicly available demographic information, they proceed to only observe and track activity information like when a consumer changes the radio station/television channel, how long they listen to a song, etc.

As a consumer, I see the benefits in dynamic advertising. I feel more valued as a consumer when my experience is personalized for me. While some companies push the privacy limits as far as possible to achieve this, Nielson takes a more conservative and superficial approach. They use the information that they collect to help their clients improve and grow, but their method doesn't involve watching consumers under a microscope. As technology advances, the business of data mining will develop as well. I hope to see increased privacy rights for consumers as the evolution occurs.

Works Cited

Grauer, Yael. “What Are 'Data Brokers,' and Why Are They Scooping Up Information About You?” Motherboard, VICE, 27 Mar. 2018, motherboard.vice.com/en_us/article/bjpx3w/what-are-data-brokers-and-how-to-stop-my-private-data-collection.

Leetaru, Kalev. “The Data Brokers So Powerful Even Facebook Bought Their Data - But They Got Me Wildly Wrong.” Forbes, Forbes Magazine, 5 Apr. 2018, www.forbes.com/sites/kalevleetaru/2018/04/05/the-data-brokers-so-powerful-even-facebook-bought-their-data-but-they-got-me-wildly-wrong/#4d5a514d3107.

Marr, Bernard. “Where Can You Buy Big Data? Here Are The Biggest Consumer Data Brokers.” Forbes, Forbes Magazine, 7 Sept. 2017, www.forbes.com/sites/bernardmarr/2017/09/07/where-can-you-buy-big-data-here-are-the-biggest-consumer-data-brokers/#318330276c27.

“Nielsen | Celebrating 90 Years of Innovation.” News Center | Nielsen, sites.nielsen.com/90years/.

“Ratings Academy | Nielsen.” Ratingsacademy.nielsen.com, ratingsacademy.nielsen.com/media-overview/census-based-measurement.

Walker, Kristen. Consumer Information in the Digital Age. Cognella, 2018.

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