Advertising vs. Privacy

For some time now, consumers have been aware of the privacy flaw of the internet. Popular websites like Google and Facebook have long been exploiting data from the internet about consumers. Searching “pizza” on Google automatically shows a Pizza Hut ad. It has even been said that some companies are checking social media before hiring future potential employees!

Everywhere on the internet, there is consumer data being gathered for advertisers to target their audience more efficiently. With this data, companies have the ability to target their consumers strictly by their interests. For example, a consumer who searches “fishing” on Google will likely receive plenty of advertisements selling fishing equipment. This is something I have experienced first hand. Recently, I had ordered a pizza through Domino’s using their website. The next day, I logged in to one of my social media accounts and noticed several advertisements – not only by Domino’s, but their competitors as well.

This type of marketing is widely known as behavioral marketing. Behavioral marketing is a marketing strategy in which companies target consumers based on their interests. For example, a consumer who owns a boat may be targeted by Bass Pro Shops, since this consumer is likely to be interested in their products.

Is privacy important to you when searching the internet? Do you support behavioral marketing? Have companies gone too far to reach their target audience?

What is your perspective?

Paypal is Your Pal

Payment methods have certainly evolved throughout history. The fact that something can be paid for with the swipe of a card is truly amazing. Today, however, there is an online market to attract. Payment methods like Paypal have flourished on the web. So much so, that online retailers are now almost required to have some kind of online payment method on their website. Even a pizza can now be purchased through online payment and delivered to your home, just moments after!

Safety is one of the main issues of these online payment methods. Many consumers fear their information will be stolen, if posted on a website without a secure method of payment (such as Paypal). This can be a huge issue for online retail companies. A consumer may be too frightened to purchase a product, which can lead to a loss of potential revenue.

With the growth of the online market, I feel it is essential to give all consumers a sense of safety by adding a secure online payment, such as Paypal. eBay, the owner of this secure online method, seems to be thriving as one of the internet’s most visited websites. Perhaps Paypal is one of the reasons why eBay is so successful. Only time will tell just how much more success Paypal will achieve.

Is it worth paying a fee to give consumers the option of paying through Paypal? Do you feel safer inputting your information on websites that use Paypal? Do you feel the future is bright for online payment methods like Paypal?

What is your perspective?

The Sales Tax Opportunity

Online retailers have always been just one step ahead of face-to-face retailers. Why? Sales tax. Sales tax can certainly be a determining factor in whether or not a product is purchased by a consumer – especially when sales tax is nearly 10%, like in some areas of California.

California has recently passed a law that will charge sales tax on online purchases. This brings up many questions. Will sales tax be charged on international purchases? When will other states implement this sales tax? How will this affect the market?

More importantly, one must wonder what Amazon will do next. Many are stating that their next step is to add distribution centers throughout other states, in order to decrease shipping time. This strategy is expected to compensate for the newly implemented sales tax. Amazon may have even been pushed enough to open their own retail stores, directly competing with companies like Wal-Mart, Radio Shack, Target, and Best Buy. With this in mind, one must also wonder how these popular retail stores will respond.

Regardless, this ruling affects many different companies, which means it also affects advertising. Popular retail stores could use this ruling as ammunition against Amazon or eBay (in the future), in regards to advertising. For example, Wal-Mart’s advertising strategy could focus on bringing awareness to this tax implementation, in an attempt to steal consumers from Amazon. This can be a great opportunity for these retailers to target the largest online retailer in the world. Amazon, in turn, could respond by advertising their upcoming ability to increase shipping speeds.

Should retailers use advertising to build awareness of this tax implementation to target Amazon? Should they, instead, lower prices to compete with the massive online retailer? How do you think Amazon would respond to that? Also, what will be the future of other massive online retailers like eBay?

What is your perspective?

Looking for more info? Check out these links:
http://www.businessweek.com/ap/2012-09-13/tax-on-amazon-purchases-in-calif-dot-begins-saturday#p1

http://www.forbes.com/sites/robertwood/2013/01/28/sales-tax-amazon-fights-irs-too/

http://www.sensibleemarketing.com/2013/02/will-amazon-be-next-walmart-new-tax.html