Is marketing discriminatory?

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Marketing targeting key consumer demographics may be discriminatory by nature

In the literal sense of the infinitive "to discriminate"— noting differences between people — of course it is. But does it fall within the legal sense of the word, as well?

The Merriam-Webster dictionary lists two definitions for the verb discriminate. One is "to recognize a difference between things," the other is "to unfairly treat a person or group of people differently from other people or groups." Marketers should be able to agree without hesitation that their craft depends on a skillful execution of the first definition. What, after all, are those pricey CRM and programmatic buying programs for besides discerning between the buyers and the non-buyers? But what about definition two? The honest marketer must concede that he or she treats different groups of people differently. But is their segmenting and targeting applied "unfairly?"

In a column called "When Alogrithms Discriminate" published in The New York Times last week, Claire Cain Miller wrote that thought leaders in the realms of both law and computer science think that algorithms can reinforce human prejudices. "There is a widespread belief that software and algorithms that rely on data are objective. But software is not free of human influence," she held.

Miller mentioned Federal Trade Commission reports of people in low-income neighborhoods being served ads for high-interest loans. She called out a study done by Carnegie Mellon researchers, who had built a tool to simulate brand new Google users without search histories. An ad for career coaching services for $200,000 earners was served to 1,852 of Carnegie Mellon's straw men, but only 318 of its straw women.

Miller's column took me back to a hearing of the Senate Commerce Committee I covered in December of 2013. It was chaired by now-retired Sen. Jay Rockefeller, who was more attack dog than watchdog when it came to data-driven marketers, especially the so-called data brokers who sell third-party customer information. "The dark underside of American life" was how he described the likes of Acxiom and Experian.

But it was two other senators at the microphone in that session — convened to discuss a new report on the data industry — who gave me pause. I had covered marketing for most of three decades, but I had never until that moment heard legislators question the basic legality of the practice. 

Richard Blumenthal (D-CT) seemed incensed over the idea of dynamic pricing and the notion that different offers and prices could be delivered to people depending on their past behavior. Then DMA head of government affairs Jerry Cerasale, who was on the hearing panel, responded that widely used frequent flier and shopper programs commonly offered different prices to different people. But Blumenthal argued that marketers' use of personal information for this purpose could lead to "discrimination and exploitation" in other areas. 

"This could be devastating to long-term unemployment," Blumenthal said. "I've joined Senator [Elizabeth] Warren in a bill that would deny use of credit scores for hiring. An employer could buy that information [from data brokers] and use it to discriminate against certain job applicants."

Senator Ed Markey (D-MA), however, questioned the discriminatory liability of marketing itself. "There's a practice of attaching a propensity score to individuals, scores created without the consumers' knowledge or consent, that become the basis of targeted offers and prices to consumers. Some get discounts regularly, some not," Markey said. "This is not redlining, but ‘weblining.' You're the wrong financial group, the wrong racial group, the wrong sex."

Rockefeller did not hesitate to rush into the breach. The hearing was held around the same time the National Security Agency was under public scrutiny for monitoring the Web activities of regular citizens. The senator from West Virginia appeared to view the NSA's discretions as mere misdemeanors compared to the felonious conduct of marketers.

"[The NSA is] only going to interact at point-zero-zero-zero-one-percent of people they conclude need further observation, but this is everybody," Rockefeller said. "It's divided into race, economic activities, education. You can't prove it's wrong, but there's something lethal about it, something unfair about it."

It may appear unlikely, laughable even, to imagine being hit with a discrimination suit for doing marketing-as-usual. My instincts tells me, though, that this is not a topic that will go away, especially as marketing technology's power grows daily. Never underestimate the size of the fire that can be started by a few people in Washington with "Honorable" in front of their names. Rockefeller may be gone, but his ideas about the legalities — and illegalities — of modern marketing still live in the halls of Congress.

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