All start-ups depend on targeted marketing of their services of products to be successful. But what if it is no longer legal to distribute marketing offers based on customers preferences? Here’s the hypothetical impact on a Belgian baker.
Yves, a Belgian baker wants to sell his high-end cookies and cakes to the French market. Because of the difficulty in getting into French retail chains, Yves sets up a web shop to sell his cookies and cakes directly to the French market. After a while, he decides to generate more traffic to his website by placing simple online advertisements. The cost of this advertisement is based on the number of clicks on his ads, with each click costing him 50 cents. On the first day, he had 500 clicks, costing him €250. However, he only sold two extra cookie and cake packs than usual that day from his web shop; the promotional effort makes no sense if it continues this way.
Yves then decides to choose a segment “foodies in France” offered by his online agent. His advertisement would be visible to people who are most likely interested in his products. Because of this more targeted approach, the number of clicks went down to 20 clicks a day (€5 cost), but he manages to sell 10 extra cookie and cake packs. This approach is made feasible through profiling – without profiling, Yves will have to abandon promoting his cookies or cakes in France.
Direct marketing uses a variety of marketing channels, such as traditional mail, email, telephone, and online advertising, to communicate about customized products and services for people like you and me. This makes the communication we receive more relevant to our needs.
It is a particularly important marketing concept for new, niche or innovative products where it is essential to be able to target messages at a selected number of potential customers. Direct Marketing is also a cost effective way to be able to market products.
Profiling benefits those SMEs who are trying to make their business a success. But it also benefits individuals who get access to, and discounted offers for, products and services that suit their preferences. The proposed EU Data Protection Regulation should consider alternatives, instead of banning profiling outright – which would strangle businesses with a low marketing budget and deprive customers from receiving high-value offers that suit them.
innovative products and services as well as for small businesses since it is the best cost effective way to target the right group of individuals. This explains its wide take up across the economy.
FEDMA understands your need for online privacy and knows that privacy is also an important issue for you. That is why we do our best to respect your privacy when you use this website.
FEDMA is a founding body of the European cross-industry self-regulatory initiative on online behavioural advertising, providing transparency and control to internet user over online behavioural advertising they are served. You can find more information about the programme on http://www.youronlinechoices.eu/
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