Ethical Marketing: Maintaining trust in an age of digital personalisation

AGSM Executive-in-Residence Stephen Scheeler
Leadership

By AGSM Jul 5, 2019 

Successful organisations know capturing and investigating data is key to understanding their customers – and designing products and services tailored to their needs. At the same time, they face the challenge of maintaining integrity as they balance personally-targeted marketing with ethical data-use. AGSM @ UNSW Business School’s Executive-in-Residence Stephen Scheeler shared these insights and more at the management school’s first Global Network for Advanced Management (GNAM) Global Network Week in Sydney last month.  

Students with backgrounds in healthcare, technology and finance from US schools Yale and Berkeley, as well as business schools from China, Japan, Mexico and Ireland participated in the inaugural AGSM GNAM program. 

 “Consumer demand and digital innovation pressure digital marketers to create rigorous, personal marketing experiences – and the challenge is navigating the less clearly defined territory of ethical marketing and data rights,” said Scheeler. “The average person generates 1.7MB of data every second. And 90% of the data in human history was generated in the last two years.”

Now, because data storage is cheap, and machine learning is increasingly accessible, we’ve reached a point of massive opportunity. By pairing huge datasets of human activity with artificial intelligence, organisations can analyse data, watch for shifting trends and uncover consumer needs. This is only set to rise and rise, as data capture grows and businesses learn more about analytics. “Most of the future value you will create for customers lies in data you don’t even collect yet or understand today,” said Scheeler. 

The impact of digital on consumer markets

Scheeler says digital is disrupting five core consumer business pillars, including:

  • Products and services on offer
  • The channels through which we sell
  • Where consumers spend their time
  • How brands can reach their audience
  • And most significantly, the fundamental ways we understand customers.

Moving beyond the friction frontier

Until recently, companies would make products before finding their market. Now, it’s a matter of finding the market need and then creating products to meet those needs.

Scheeler says this is the greatest focus of digital native companies. “They’re obsessed with moving friction,” he says. Whether its Amazon creating Alexa to make it easier for home shoppers to order items, or Facebook creating Newsfeed to give its users better filtered content, it’s all about understanding the friction in your customer’s experience and finding a way to move past it.

For traditional retailers like supermarkets, e-commerce giants like Amazon have become an enormous threat – because online sellers can offer a more frictionless customer experience. While traditional retailers might focus on negotiating with suppliers and monitoring competitor prices, Amazon concentrates on consumer research and development – knowing what products its customers want, and how they can get it faster. 

Scheeler says the key difference is between ‘customer-centric’ and ‘customer obsessed’. “Digital natives have to know the answer. They will research and dig until they solve a customer’s issue. It’s this determination that naturally sets them apart in the experience they’re offering, and something traditional companies need to prioritise if they’re to remain competitive.” 

Personalisation, ethical marketing and trust

We know personalisation matters. It means less meaningless noise in a consumer’s newsfeed, and more relevant and useful content. In fact, Scheeler says 58% of consumers have broken ties with a brand over a poor personalisation experience. 

But an even bigger risk is losing customer faith. Brand trust is critical, and consumers want to know their data is being used ethically. This is where personalised marketing can have unintended consequences. 

“Filter bubbles only show you what the machine thinks you want to see. This can help form opinions, and you start to think everyone thinks just like you,” says Scheeler. And when you consider the impact filter bubbles are having on global politics – “that’s a problem,” he adds.

The good news is, this issue has been identified and new innovations are being created to rectify the problem. ‘Federated learning’ is a new collaborative machine learning technology that has been introduced to combat issues of privacy that exist from using centralised training data. For example, mobile phone users can still benefit from using a smart phone that houses a well-trained machine learning model without having to exchange their privacy sensitive data. “It reduces the risk of data being used elsewhere and has the potential to revolutionise the speed that AI will accelerate,” said Scheeler. 

Scheeler says we have a long way to go before the global community understands how best to use data and machine learning. “Everyone will face their own ethical Cambridge Analytica moment at some point. So it’s up to you to consider how you use data in relation to your customers. Who is in charge of building trust?”

He believes trust will migrate to organisations who deliver value, and that assiduously fostering trust should be a priority for leaders.

“Go back to your organisation and think about trust. How do you handle it, measure it, preserve it. A lot of companies are struggling with this, and if you’re consumer-facing in this new data economy it’s an acute problem. This generation of leaders will need to figure it out.”

Practical insights for the next generation of global leaders

The Digital Marketing in Asia-Pacific week-long intensive was designed by AGSM Academic Director, Dr Michele Roberts. 

“At AGSM, our courses are designed with practical and relevant learning experiences. We provided visiting students with key insights into Australia’s recent record-breaking economic growth, and the impact this has had on the business market within the Asia-Pacific region,” said Dr Roberts.  

“Being part of this global alliance gives our students the ability to gain valuable insights into the global business market, and ensures they build practical skills and knowledge to navigate any challenge associated with managing enterprises in different economic regions.”

AGSM welcomed 25 students to their first global network week, with a number of AGSM students also travelling to different international universities as part of the international study opportunities available to students of GNAM member schools. AGSM student Aaron Pan visited Fudan University in Shanghai. “It has been an honour to join future leaders from elite business schools around the world. At Fudan University I gained deeper insights into the digital landscape, innovation and the startup ecosystem in China.”

UNSW Business School is the only Australian school in the GNAM global network of 30 member schools based in 28 countries across six continents. Current AGSM MBA students and faculty members have access to this rich network of prominent international business schools.

The next Global Network Week will be held in October, and AGSM MBA students will have the opportunity to learn at one of our many global partner schools, as we once again welcome international students to AGSM. 

If you’re a current AGSM student, find out more: studentexperience@agsm.edu.au or call +61 2 9931 9490.

Learn more about the Global Network for Advanced Management: https://globalnetwork.io/



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