Targeting Vulnerable Consumers: The Dark Side of Lead Generation

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Comedian Jerry Seinfeld popularized the humor contained in banality. His brilliance was in extracting hilarity from bad-tasting hot dogs, annoying neighbors, and weird clothing. But marketers use banality for darker purposes.

Consider a Tweet I made recently: “I’m walking to Whole Foods after work to buy a 6 of local-brew #IPA. Suggestions?”

Without realizing it, I saturated this 81-character message with personal details, and shared it to the world:

1. I am over 21.
2. I live in an urban area.
3. I am employed.
4. I have discretionary income.
5. I drink beer.
6. I drink at places other than bars and restaurants.
7. I know people who have similar interests.
8. I seek the opinions of others online.
9. I am not brand-loyal when it comes to beer.
10. I am able to carry at least six pounds.



“There are eight unique data points per Tweet,” said Adrienne LaFrance, Staff Writer for The Atlantic. Here, I found ten, and my Tweet had capacity for 59 more characters. Lucky that I didn’t use them. Who knows what else I could have revealed.

Based on my innocuous Tweet, marketers can deduce that the car I drive isn’t a Hummer or a Cadillac Escalade. They can bet that I have a college degree. But that’s beside the point. They already know. Remind me again who has the information power, because it’s not me.

Every second, about 6,000 Tweets pulse through Twitter. Marketers mine this noisy digital exhaust to extract fuel to power their ravenous revenue machinery. Automated algorithms work 24/7 assembling details about individual human beings. By combining online and offline information about people, companies called list brokers create large files of personal artifacts. This information gets passed through a serpentine value chain, where it’s divided, changed, enhanced, and re-combined with more data. What gets harvested can be described as digital gold: richly-detailed profiles of consumers. List brokers package them into tidy, organized, fungible groupings called lead lists, vital for business development. Rube Goldberg would be proud.

But Goldberg’s whimsical imagination mimicked the physical world, where noisy events happen in plain sight. Lead generation processes depend on subterfuge. Prospect curation machinery works cleanly and silently, away from the public eye. Consumers are unaware about who (or what) collects their information, or who gets to use it. Reason #412 that I don’t wear a Fitbit, play online “brain games,” or use gene testing services. None of these businesses are required to comply with patient-privacy laws in the 1996 Health Insurance Portability and Accountability Act (HIPAA).

Many expectant or postpartum parents would be surprised to learn that their personal identities have been meticulously collected, and electronically shipped to and fro. Their names, and a whole lot more, are regularly sold to businesses, including eager telemarketers and digital agencies. For example, Dataman Group can sell you a New Baby List, which includes pre-natal families. Among the fields are contact information, home ownership data, dwelling unit type, estimated household income, number of months until birth, and whether the birth is (or will be), the mother’s first.

Dataman’s website makes a flamboyant appeal to its prospective customers:

Almost 1 out of every 2 births today is a first birth, creating enormous marketing opportunities.

Most first-birth families are also two-career families; working moms and dads with large, disposable incomes and no brand loyalties where child care products are concerned.

As a market, these growing families outspend childless couples 2 to 1 and are prime candidates for not only a full range of baby products, but also day care, home entertainment, photography, insurance, recreation, and catalog offers. Information on any product that your company offers that can offer these young families a better way of life will be welcomed.

No other life cycle list offers the accuracy, cost-efficiency or selections of OUR new parents mailing lists or prenatal list. You can even select Pre-Natal households by trimester….or New Babies by actual month-of-birth.



At the end of this sales pitch appears a curious request, one that hints at nefarious use: “Note: Sample mail piece and/or telemarketing script required on all orders with Children information. We support responsible marketing!”

Here is where things turn rough. With a selection tweak or two, marketers can bubble up motivated buyers – say, mothers in the third trimester, or people living more than one mile from a playground. So far, so good. But with additional tweaks, marketers can find greater buying urgency by exposing a related demographic: vulnerable buyers. Some more tweaks to reach buying motivation’s top rung: The Desperate. A lucrative target with tantalizingly short sales cycles, little comparison shopping activity, and low customer information power. All it takes to get the cash machine spinning is an appealing product, a little imagination, and the right search criteria.

How about targeting single moms below a certain income level, living in the 22 states that have declined Medicaid Expansion? That information would be attractive to rental appliance and furniture outlets, credit card companies, and loan providers. A warping of the ideal, “give customers what they want.”

This is the way revenue generation works in the digital age. A single New Baby lead list supports everything from aspirational selling to predatory marketing. Innovative baby carriers to take on outdoor adventures anywhere in the world, or payday loans. Which way you go depends on what you’re selling, and how you sort and select the prospects.

Information that list brokers use sometimes comes from landing pages designed to surreptitiously collect personal information, which then gets sold to others. When I entered the phrase, need money for food, into a search window, I received advertising links that assumed ancillary concerns: “Bad credit personal loan,” “500 to 20000 personal loan,” “sell your house fast,” and “are you eligible for aid?” These are emblematic of the marketing predations that occur, often in plain sight. The last ad, linking to a website ending in dot-com, clearly wanted to find out more about me. I did not click on it.

When I re-entered the same search phrase one hour later, the aid-eligibility ad had vanished, presumably because Google recognized the ruse, and removed it. In fact, in 2014, “Google removed 524 million advertisements and banned more than 214,000 advertisers from its search results. But predatory companies are still finding loopholes,” LaFrance wrote in an article, How Google Plays Whac-a-Mole with Shady Advertisers. Squashing 524 million ads per year equates to around 1,000 ads per minute. That’s a lot of Whac-a-mole.

I conducted this search as a simple experiment for this article. But what if my query was genuine, and my situation perilous? What if I proceeded to fill out the form? Who would have my information? What would I unleash? Sadly, there are few laws protecting prospects. Congress hasn’t passed a consumer privacy law since 2009. This, despite huge increases in social media use, advances in data science, and wide adoption of marketing automation. At least my beer purchase was discretionary. Vulnerable prospects face privacy hazards that are more poignant.

“This process for collecting customer data exploits a loophole in consumer protection laws. Companies can buy lists of people who have asked about diabetes, Alzheimer’s, or Parkinson’s disease. They can learn about victims of assault and people diagnosed with HIV,” said Aaron Rieke, Project Director at Upturn. Rieke was a panelist on NPR’s Tech Tuesday program, When Companies Use Your Online Searches Against You (November 10, 2015). “How did they get my name?” Amazement that happens all too frequently online.

It’s not just from hijacking customer trust, and stealthily scraping information from online forms. In 2013, 43% of free health apps sold users’ personal data, according to a study by the Privacy Rights Clearinghouse. “Fewer than half of mobile apps that collected health and fitness information provided a privacy policy in which they spelled out how user data could be shared, and 43% of free apps tested by the group shared personal information with advertisers,” The Wall Street Journal reported in April, 2015.

“The extent of consumer profiling today means that data brokers often know as much – or even more – about us than our family and friends, including our online and in-store purchases, our political and religious affiliations, our income and socioeconomic status, and more,” said FTC Chairwoman Edith Ramirez. “It’s time to bring transparency and accountability to bear on this industry on behalf of consumers, many of whom are unaware that data brokers even exist.”



“Technology gives us power but cannot guide us as to how to use that power. The market gives us choices but leaves us uninstructed as to how to make those choices,” Lord Jonathan Sacks wrote in his book, Not in God’s Name: Confronting Religious Violence.

Those conundrums occur every day in marketing. “We’re doing this because we can,” clients tell me when discussing their marketing strategies and tactics. I urge them to include an additional hurdle. “Ask yourselves, ‘what is the right thing to do?'”

3 COMMENTS

  1. Hi Andrew

    An interesting post that raises a number of questions.

    Question 1. Who does data gathered during interactions with customers belong to?

    If a customer interacts with a company in a way that generates data, surely the data belongs to both parties to collect and do as they see fit with, (within the framework provided by e.g. data protection laws). You don’t ask the company for their permission to use data gathered during your interaction with them. Why should they ask you for permission to use the same data gathered during the same interaction with you?

    If data gathered during interactions with customers is as much the company’s data as the customer’s, who are we to deny them that opportunity?

    Question 2. Is processing data about customers legal?

    There is extensive legislation about what data can be collected about customers in which circumstances and particularly, about how it can be processed afterwards. The legislation in Europe is different and tougher, than that in the USA. I don’t intent to go into it in this comment. Suffice to say, the vast majority of data brokers operate within the letter of the law. How could they fail to do otherwise and expect to stay in business for very long.

    If processing data about customers is carried out within the letter of the law, who are we to deny them that opportunity?

    Question 3. What is the purpose of marketing?

    In the early years of marketing its purpose was largely to ‘create a hot lead’ for sales to close. In contemporary B2B marketing it often still is. The proliferation of data, content and channels over which they manifest themselves has complicated things a little. But the purpose of marketing is still to create awareness, interest and an intention in customers to do something; usually to buy the company’s products. In other words, to create a hot lead! The programmatic marketing that you hint at is just the latest in a long line of marketing technology innovations. And judging by the rapid increase in digital spending on programmatic, it obviously works.

    If using data programmatically creates more and better hot leads for marketers, who are we to deny them that opportunity?

    How marketers use data for marketing is up to them to decide. Perhaps we should leave decisions about what is right to moral philosophers and law makers.

    Graham Hill
    @grahamhill

  2. Hi Graham: thank you for your comment. While I welcome philosophers to any moral debate about business development, I’m not willing to entrust moral decisions to lawmakers – at least not in the US. And probably not anywhere.

    I make a living as a marketer, yet because I have seen abuses of customer trust firsthand, my attitudes about marketers’ rights are not laissez-faire. What I have described in this article are exploitations of legal loopholes that enable marketers to prey on consumers.

    “If using data programmatically creates more and better hot leads for marketers, who are we to deny them that opportunity?” – I will, gladly! For starters, payday loans are banned in 14 states and the District of Columbia. They are highly profitable to lenders but they seek vulnerable consumers, and drive many of them into bankruptcy. Should those companies be equipped with increasingly-sophisticated ways to target people? Or, should we move to restrict how data is collected and used?

    The FTC does not regulate the claims of vitamin and “health supplement” manufacturers. It’s legal for providers of online “brain games” to sell their data to them, and well . . . anyone else. Disclosure to the customer? That was embedded 16 paragraphs into the statement with the “I accept” checkbox. If it was disclosed at all. It’s legal, but that doesn’t make it right. Many people conflate the two, thinking, “well, if it was wrong, laws would forbid the practice.” But again, no consumer privacy laws have been enacted in the US since 2009.

    My article barely exposes the range of lead-gen marketing shenanigans that occurs. And Google’s self-policing of predatory ads isn’t in response to regulations, it’s to prevent regulations. So, no, I don’t trust lawmakers to do the right thing. Or even to care. Not a single one of them has to enter ‘need money for food’ into a search window, and experience what it’s like to have a loan shark, who just bought their name from a list broker, contact them. “I understand you could use $1,000, and I’d like to help . . .”

    A smoking hot lead given to an unethical marketer, without the consumer even knowing his or her data was collected, and sold. A technology-enabled tragedy. And right now, it’s perfectly legal.

  3. It’s amazing all the data that can be obtained online. On one hand it’s great to help people find what they need and are interested in, but on the other, it’s important that there’s transparency and accountability about how data is used.

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