February 27, 2012

The latest privacy example — pregnant potential Target shoppers

Charles Duhigg of the New York Times wrote a very interesting article, based on a forthcoming book of his, on two related subjects:

The predictive modeling part is that Target determined:

and then built a marketing strategy around early indicators of a woman’s pregnancy.

The anecdote zooming around the blogosphere is the one of the father who was angry that Target was marketing to his teenage daughter as if she were pregnant — only to then discover that she really was.

The manager didn’t have any idea what the man was talking about. He looked at the mailer. Sure enough, it was addressed to the man’s daughter and contained advertisements for maternity clothing, nursery furniture and pictures of smiling infants. The manager apologized and then called a few days later to apologize again.

On the phone, though, the father was somewhat abashed. “I had a talk with my daughter,” he said. “It turns out there’s been some activities in my house I haven’t been completely aware of. She’s due in August. I owe you an apology.”

But I’m also struck by another point in the article (emphasis mine):

“With the pregnancy products, though, we learned that some women react badly,” the executive said. “Then we started mixing in all these ads for things we knew pregnant women would never buy, so the baby ads looked random. We’d put an ad for a lawn mower next to diapers. We’d put a coupon for wineglasses next to infant clothes. That way, it looked like all the products were chosen by chance.

“And we found out that as long as a pregnant woman thinks she hasn’t been spied on, she’ll use the coupons. She just assumes that everyone else on her block got the same mailer for diapers and cribs. As long as we don’t spook her, it works.”

In other words, Target believes it’s a good business practice to conceal the effectiveness of its predictive modeling.

Short term, I don’t doubt Target is right. But as a general rule, we should apply predictive modeling in more transparent and open ways. Deception is often uncomfortable, often unethical, and often a poor long-term business strategy


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