Loose lips lead to brand tips

Social media is monitored to gauge what consumers want, writes Brad Howarth.

Ever tweeted about an airline losing your bags? Or bragged on Facebook about a new outfit you've just bought? Or posted a picture of a restaurant meal on Instagram?

An estimated 12 million Australians regularly use social media to update friends, family and followers. What many don't realise is that tweets, posts and images are read, analysed and stored by the brands they are talking about. Social media has become big business for advertisers, helping them find "brand advocates" and measure opinions.

Across Australia, advertisers and their agencies have teams watching and responding to social chatter. Telstra has 60 full-time employees monitoring social media, while National Australia Bank's social media command centre tracks between 1500 to 2000 mentions relating to the bank every week.

Many social media users may be unaware that it is increasingly possible to match their online personas to real-life identities, and determine other personal details.

Earlier this year the Australian ice-cream company Gelatissimo worked with agency Salmat Digital to gather a snapshot of customer opinions, and identify influential customers and where they shopped.

Salmat Digital's principal consultant Ross Bark says Gelatissimo found fans by searching through publicly posted Instagram pictures tagged with #gelatissimo, and then used Instagram's geo-tagging capability to determine where the images were taken. Customers were subsequently contacted and in some instances provided with special offers.

But Mr Bark stresses there is nothing creepy about the way Gelatissimo used the information.

"It is only the publicly available social media information that they have access to, and that's what they are utilising," he says.

Emma Lo Russo's Sydney-based company Digiviser mines data posted publicly and matches the names, email addresses and locations in a company's database for her clients.

"As individuals ... are 'liking' or 'sharing' or retweeting, they are giving an indication of what they are interested in. And all these little bits and pieces are starting to help an organisation know more about them." But it is possible to take social listening too far?

In October the Office of the Australian Information Commissioner (OAIC) published its latest Community Attitudes to Privacy study, which found that 78 per cent of people were uncomfortable with having their activities monitored covertly on the internet, and 69 per cent were uncomfortable with marketing approaches based on their actions. Storing their information in databases also made 77 per cent of respondents uncomfortable. Some 60 per cent of respondents said they had stopped engaging with companies because of privacy concerns.

Australian privacy commissioner Timothy Pilgrim says even though a huge proportion of the social networks' revenue comes from their ability to use personal data for marketing, things might change.

In March the OAIC will introduce 10 new Australian privacy principles. These set out guidelines for organisations on the use of personal data, including that gathered through social media, with specific restrictions on its use for direct marketing purposes. The privacy commissioner will have increased powers to enforce compliance, including to levy fines of more than $1 million for breaches.

Mr Pilgrim says the goal is to disclosed how information is being used. While this is usually spelt out in the terms of service, he says users tend to switch off.

"From our survey only 51 per cent of our respondents said they did read the privacy policies before they went ahead and transacted online."

The principles themselves are somewhat vague. The direct marketing principle, for instance, has immediate implications for any organisation that chooses to respond to a comment on Twitter, as it defines direct marketing as communicating directly with an individual to promote goods and services. That would catch campaigns such as Gelatissimo's.

Not surprisingly, these changes have caught the eye of the Association for Data-driven Marketing and Advertising (ADMA), which is incorporating provisions for handling user-generated content in a new version of its Code of Practice.

ADMA chief executive officer Jodie Sangster says companies have an imperative to ensure they do not infringe community standards.

Tension arises, however, due to free social media services having to produce revenues somehow. According to Macquarie University ecommerce law expert John Selby the need for services to make money from users sets up a clash with many users' desire for privacy.

"There are rights to privacy online, but you have to look always at the contract's terms and conditions," Dr Selby says. "So if you are tweeting something to the world, it is not a private conversation. What the world can do with that information, such as using it for marketing, is subject to a range of other laws, but if you put a tweet out to the world you have released that to the world."

Digivizer's Ms Lo Russo says privacy fears are blocking "this great untapped, unmined database".

"You've got people who are communicating their desires and interests with your brand, and you should be using it - it is just how you go about it."

Nic Hodges, head of innovation and technology at MediaCom, says it's common sense, not the law, that should set the limits. He suggests advertisers only use data in a way that consumers would respond to positively. "What that tells us is that rather than the legal boundaries being the limit, it's the common-sense boundaries that should set the limits in which we work."