There’s no knowledge without responsibility

There is much consumer concern over the amount of data companies hold on them. but the real debate is over how this is used, says Alan Mitchell

As PR blunders go, Tesco’s radio-frequency identity (RFID) tagging experiment, which used tags to trigger a camera, which photographed customers buying razors, must rank as an all-time classic. With one simple crass blunder, the progress of a technology with significant potential benefits for companies and customers alike may have been put back years, tarnished indelibly with the “Big Brother” brush (MW August 21).

Whether it’s cookies on computers, RFID tags, or good old-fashioned worries about what information is held on whose databases, consumer concerns about privacy and intrusion seem to be mounting. When even “squeaky-clean” Tesco trips up, it’s a sign that things are getting tricky.

Here’s a possible root cause: companies are still underestimating the implications of the issue, which goes right to the heart of marketing’s relationship with consumers. The privacy debate is not about people’s shyness and fear of embarrassment, set against Big Brother corporate nosiness. It’s about power, property rights, control and the very purposes of marketing: the subject of a head-on confrontation between deeply embedded command-and-control managerial mindsets and new consumer and technological realities.

The early days of the information revolution suited the command-and-control mindset perfectly. The ability to gather, store, process and analyse ever more data allowed companies to identify and extract new cost efficiencies and to predict, plan and exercise ever more detailed control over ever more processes – including marketing.

Companies loved database marketing, for instance, because its results were more measurable, it identified new efficiencies (through better targeting, for instance), and delivered greater control. Ever more detailed consumer data helped marketers to focus more tightly on those stimuli which generated the best responses.

Consumers, for the most part, have acquiesced in these developments. On the whole, UK consumers are fairly relaxed about the types and amount of information companies collect about them, leaving companies free to gather as much data as they can, and to sweat this data as hard as they can (or at least, as hard as the law allows).

But as the information revolution unfolds, three things are happening. First, as technology gives more individuals better, easier access to ever more information, those individuals are becoming much more aware of information’s potential power and value.

Second, the mechanisms and processes of information exchange are changing. Marketing as we know it was invented for a world where the only information flows worth talking about were top-down: “here we are, this is our offer” messages from companies to consumers. Now, however, the big growth areas are bottom-up messages from consumers to companies (requests, complaints, enquiries, orders and so on), plus peer-to-peer information flows (music file-sharing, for instance). The result is that old, established marketing processes are increasingly out of sync with changing technology and consumer realities.

Third, the more information-intensive marketing becomes, the more it needs the positive, active involvement of both sides of the exchange. Companies need and want consumers to pay positive attention to their messages, to respond positively to requests for more information, to give permissions and to volunteer ideas and information. They need consumers to invest time, effort, information and attention in the marketing process.

Thanks to the second key trend, this investment is becoming possible. But one factor can derail the whole enterprise: consumers have to want to invest, and to do so they need to earn a positive return on this investment. As long as they feel that the underlying purpose of all this marketing activity is simply to further someone else’s interests – the seller’s – then they have little reason to bother investing.

In fact, consumers have every reason to be suspicious of what’s going on. As long as consumers are the targets, rather than the authors and subjects, of the marketing process, the passive indifference that made things so easy for companies in the past will shade into passive resistance in the future – and will become a huge obstacle to progress.

If we put the above trends together, we can see the beginnings of a new marketing agenda which places the politics and economics of information and information exchange centre stage. Successful companies will win consumers’ trust and involvement by offering and delivering three things.

The first is transparency, so that consumers know what information is being collected about them, how it is being used and by whom. Second is involvement. Companies will give consumers a say – control, even – over the terms, conditions, purposes and limits of information-gathering and use. And third, companies will make it all worthwhile by explicitly offering consumers a positive return on their investment in marketing processes, whether in the form of saved money, saved time or extra product and service benefits.

Put like that, this emerging agenda sounds quite straightforward. In fact, it represents a massive challenge to the status quo. We commonly assume that the data collected by companies is those companies’ private property. But, increasingly, we will need to treat all personal information as the property of the person concerned, to be respected as his or her private property and only available for rent.

As well as seeing marketing as a process through which companies search for customers, marketers will need to engineer it as a process through which consumers search for value, and to help consumers in that quest. Instead of seeing information as a tool of corporate empowerment, we will need to use it as a means of consumer empowerment. As well as measuring marketing efficiency and effectiveness from the point of view of the seller, we will need to measure it from the point of view of the buyer.

As individuals, we worry about privacy when we feel powerless. We resent intrusion when we feel that our needs and interests are being ignored. These worries and resentments are creating a huge opportunity for brands that empower us and act as our advocates; for brands we can trust, not only not to misuse our information, but to use it well and positively, with us and for us.

Alan Mitchell’s new book, The New Bottom Line (with co-authors Andreas Bauer and Gerhard Hausruckinger) is published by Capstone Wiley

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