Here are two realizations I took away from 60 Minutes‘ report on “data brokers” last Sunday:
1. 60 Minutes thinks American consumers are dumb as dirt, and
2. 60 Minutes has no clue that global commerce now dances to a digital tune and will cha-cha over anyone in its path, including the United States Congress and TV magazine shows that sell digital ads on their websites
Let’s take number one first. 60 Minutes correspondent Steve Kroft starts out the report by insulting consumers’ intelligence. After mentioning the National Security Agency and its recent privacy gaffes, Kroft tells viewers that “what most of you don’t know…is that a much greater and more immediate threat to your privacy is coming from thousands of companies you’ve never heard of in the name of commerce. They’re called data brokers.”
According to eMarketer, smartphone penetration is at 74% in America. People get smartphones because they can use them to check email, engage in social media, and install apps that connect them to everything from sports betting services to their airlines. But what 60 Minutes believes is that the preponderance of Americans carry little computers with GPS tracking in their pockets from which they post pictures of themselves on Pinterest, summon Uber cars to pick them up in specific locations, and have Pizza Hut deliver them pies via apps; but they’re positively stunned that the for-profit marketers with whom they’ve entrusted their names and locations might track their behavior and market stuff back to them?
I watched the report on 60 Minutes’ Web page, and I got served a video ad for Viagra before it started plus a banner ad offering me a free trial. Could it be that the 60 Minutes webmasters just made a great guess that I was a 57-year-old male? Or could it be, Steve, that there are third-party companies on your site who, in the name of commerce and paying your huge salary, served me a (possibly) relevant ad?
Sure Americans have never heard of data brokers. Data brokers never heard of data brokers until the U.S. Congress and the Federal Trade Commission concocted the term a few years ago and arbitrarily assigned it to a couple dozen companies. But if you believe most Americans think there’s a free lunch on the Internet in the form of computer games and driving directions and, well, free lunch delivery, then Steve, you hang out with some pretty dopey Americans.
On to number two. Last week Forrester Research released a survey of some 1,600 executives of large global enterprises who said that the future of their businesses were challenged and that the great majority of them were doing quite badly at competing with digitally nimble tech startups. So badly that one of the Forrester analysts who prepared the report said it would not be surprising if, 10 years from now, two thirds of the Fortune 500 might be displaced.
The global economy, like it or not, Steve, is driven by data. Don’t use data brokers and SaaS technology platforms to learn who your customers are and the way they’d like to be served, and you die. Economists John Deighton from Harvard Business School and Peter Johnson from Columbia University completed a study last year that found that, in 2012, producers of goods and services related to data—what the professors called the “Data-Driven Economy”—employed 676,000 people and added $156 billion to the economy.
Kroft paid homage to Sen. Jay Rockefeller and his vendetta against the “dark underside of American life,” namely data brokers. But here’s the thing, Steve. Politicians care more about bringing jobs back to their states and districts than putting tech companies out of business. And with coal mining coming under fire of late, one wonders if the Senator from West Virginia might not be eyeing some of those hundreds of thousands of data jobs in a more positive light.
Data brokers aren’t some seamy little side street in corporate America. Data brokers are corporate America. Every major company that keeps and sells customer data, and that’s just about all of them, can be considered data brokers. And every company that appears on the scene, like those startups the Fortune 500 fear, are founded on data collection, analysis, and implementation strategies. Sink data brokers and you sink the economy.
“You can’t look at the data-driven economy as if it’s a vertical like energy or hotels,” says Direct Marketing Association CEO Linda Woolley. “It’s a horizontal that cuts across all of the verticals. Exxon Mobil can just as easily be part of the data-driven economy as Hilton.”
Woolley, who was interviewed on background for the broadcast, also deftly points out that the legendary investigative reporters at 60 Minutes failed to present any consumers with horror stories of how their lives had been upended, or even jostled a bit, by marketers in possession of their Facebook liking habits.
I’m going to go back to the 60 Minutes site and watch the report again to see if there was anything else I missed. I might also click that free Viagra offer. That stuff’s expensive—or so friends of mine tell me.