Case #2: Mobile Privacy

On December 17, 2010, the Wall Street Journal published an article claiming that iPhone and Android apps were breaching the privacy of their users. They found that the iPhone version app Pandora sent information to eight trackers. It sent location data to seven of the trackers, a unique phone ID to three and demographic data to two. 

The Pandora app is just the beginning. The Wall Street Journal investigation found that of 101 popular smartphone “apps” – games and other software- 56 of them transmitted the phone’s unique device ID to other companies without the users’ awareness or consent. 47 apps transmitted the phone’s location. Michael Becker of the Mobile Marketing Association explained that “In the world of mobile, there is no anonymity,” a cell phone is “always with us. It’s always on.”

In the last weeks of 2010, two class action lawsuits were filed against Apple, Inc. and mobile applications providers in California federal courts. The first lawsuit, Lalo v. Apple, Inc et al, was filed against Apple, Backflip, Dictionary.com, Pandora, and The Weather Channel. The second lawsuit was filed against the same defendants plus several other game app providers. Now in the “flood of lawsuits,” a third class action lawsuit was filed against Apple on January 27^th, 2011.

Apple spokesperson Tom Neumayr said in response to the lawsuits that “We have created strong privacy protections for our customers, especially regarding location-based data. Privacy and trust are vitally important.”

One main point of iPhone and Android supporters is that the information isn’t linked to individuals. The ID numbers assigned to every phone are effectively “supercookies.” On iPhones the number is called the “UDID,” or the Unique Device Identifier. The IDs are set by phone makers, carriers, or makers of the operating system, and typically can’t be blocked or erased. This ID is how everything gets tracked because you can’t clear a UDID like you can a cookie on a computer.

The lawsuits of the beginning of 2011 accuse companies of violating federal privacy laws, including the wiretapping act, for their financial gain through the misappropriation of user’s private data by their popular apps. They also claim that the apps were accessing and transmitting UDIDs and other information about devices and their owners to third party ad networks.

The key issue is whether the UDID numbers are considered personal information. Before the cases can be evaluated, a few questions have to be answered about the UDIDs. "Does disclosing a unique ID actually disclose anything 'private' or otherwise legally protected?" Also, "Did the users expressly or impliedly consent to disclosures?" "Did any users suffer any legally considerable harm?"

Those who agree that the UDID numbers represent protected personal information refer to privacy under the California constitution. Andre Rado, a partner in Milberg LLP, the firm representing the plaintiff, explained that "Transmission of the UDID would allow the recipient to identify exactly what a user is browsing and, together with other information, where they are at any given time. In addiion, there are disclosure-based and contract-based claims in the action.

The issue of online privacy has gotten the attention of Washington. The FTC recently released 123-page report regarding online privacy reprimanding online advertisers for privacy violations. The FTC recommended requiring an industry standard “Do Not Track” mechanism allowing individuals to restrict the delivery of their personal data to advertisers. The Department of Commerce also issued guidelines for balancing consumer privacy with online and mobile innovation.

The FTC's report established four principles that are currently non-binding to the industry. Those principles are:

Transparency and Consumer Control-  Every website, including app providers, that uses behavioral targeting should clearly and concisely spell out what they're doing. The FTC recommends that users have a simple method to opt-out of the site's targeting tools.

Reasonable security, and limited data retention, for consumer data: Also, Companies should only retain data as long as is necessary to fulfill a legitimate business or law enforcement need. 

Affirmative express consent for material changes to existing privacy promises: In other words, a company must keep its promises that it makes with consumers when it comes to protecting their data. If they get bought or merge with another company, those pledges still hold, unless consumers agree to the changes. If the company revises its policies on privacy, they must receive users' consent before implementing the new rules. 

Affirmative express consent to (or prohibition against) using sensitive data for behavioral advertising: If companies want to collect sensitive personal data, it must get users' permission before, not after, it starts collecting.

Guess we will have to wait and see if 2011 turns out to be the year of mobile privacy lawsuits.


Resources:
- www.adage.com
- http://online.wsj.com/article/SB10001424052748704694004576020083703574602.html?KEYWORDS=mobile+privacy+Apple
- http://www.remodista.com/is-2011-the-%E2%80%9Cyear-of-the-mobile-privacy-lawsuit%E2%80%9D-bricks-mobile-2011/

Diet Pepsi "Skinny Can"

 On February 10, 2011, Diet Pepsi debuted its new can at Mercedes-Benz Fashion Week and will be available to consumers nationwide in March. Jill Beraud, Chief Marketing Officer for PepsiCo, says “our slim, attractive new can is the perfect complement to today’s most stylish looks, and we’re excited to throw its coming-out party during the biggest celebration of innovative design in the world.” The “taller, sassier” version of the diet soda can is supposed to be seen as a “celebration of beautiful confident women,” according to CNN Money. However, the can is stirring up controversy with critics claiming that Pepsi’s approach only reinforces dangerous stereotypes about women and body image. While brand experts are praising the new design, they are skeptical about the company’s sales pitch that skinny is better. The National Eating Disorders Association said that it takes offense to the can and that Pepsi’s comments are both “thoughtless and irresponsible.” 

Pepsi states that the new can and campaign are focused on design. They claim that they are “sensitive to this interpretation, and that is definitely not our intent. We intend to highlight the innovative look for Diet Pepsi and provide our fines with an ‘inside look’ at events that celebrate innovation and style.”

Pepsi plans to advertise the new can on February 28 by launching a print ad, featuring actress Sofia Vergara.

Fans of the old can shouldn’t worry, the new can isn’t replacing the old cans all together instead it is just an addition to the Pepsi line. Also, the Cola inside the can is still the same mixture of carbonated water, caramel color, aspartame, phosphoric acid, potassium benzoate, caffeine, citric acid, and natural flavor that the company describes as light, crisp, and refreshing.

Starbucks on Facebook

As a brand, Starbucks is using Facebook to their full advantage in order to effectively reach their target audience and build a relationship with their consumers. Starbucks has many tabs within their Facebook page. The home page is currently advertising their Starbucks Card, which allows the customer to put money on it and use it like a credit card at Starbucks locations. Starbucks tied the card into Facebook by letting users manage their Starbucks Card balances and giving friends money on their Starbucks Cards right on Facebook.

Not only does Starbucks on Facebook have the normal Wall, where fans can post all about how much they love Starbucks, but any time a user on Facebook makes a complaint via a comment or picture on Facebook, a representative from Starbucks comments back, apologizing for their bad experience and encouraging them to talk to the Starbucks Customer Relations team.
Another page offered on Starbucks’ Facebook is “Starbucks Around The World,” which allows fans to see the other Facebook pages that Starbucks has in different countries such as Hong Kong, Russia, Spain, Australia, Brazil, and Puerto Rico among many others. The idea is that coffee is a global passion and now Starbucks community members across the globe can interact with each other, hopefully discussing their love of Starbucks.

Like many other companies on Facebook, Starbucks also uses the site to share events, photos, new products, new flavors, etc. According to fans, one important aspect of Starbucks’ presence on Facebook is that they effectively use status updates. The statuses provide two-way communication between company and fan, keeps the page current and entertaining, while giving the fans a reason to continue returning to the page. They post pictures from travels where to countries that produce the free-trade coffee that they use. They also use Facebook as a way to direct consumers to mystarbucksidea.force.com, which is a website Starbucks created to collect ideas from Starbucks customers in order to improve the Starbucks experience. This gives consumers the chance to voice their opinions and possibly have an impact on the company that they have a bond with.

The effectiveness of Starbucks on Facebook is proven by the 19,617,606 people that “liked” the page by noon on February 16th, 2011, and the numbers are still growing. While a large number of fans is never a bad thing, the key to effectiveness on Facebook is engagement. Many people on Facebook “like” and never visit it again after. By consistently offering new and interesting content, updating statuses, adding videos and photos, etc., the company can stay in the online lives of users, get them to interact with the company and with other like-minded consumers, and hopefully get them to purchase more from Starbucks.
According to a research report featured on AdAge, Starbucks meets many of the aspects needed to make an ideal viral channel (Rohrs, 14). They lead a conversation with content that keeps consumers coming back for more, engaging them in the product, experience, and overall Starbucks lifestyle. Starbucks allows their consumers to sell to other consumers instead of pushing their product onto their fans, taing advantage of their motivated audience to promote the brand across their network of friends (Rohrs, 14).  They also play it cool and instead of pushing product at their fans, they offer new and engaging pages different from other companies who use Facebook for simple promotion and coupons (Rohrs, 14). 

Sources:
http://adage.com/digitalalist10/article?article_id=142202
www.facebook.com/starbucks
Rohrs, Jeff., Stewert, Morgan (2010). Subscribers, Fans and Followers: Facebook X-Factors. Exact Target.

Case #1: Threadless.com

As technology takes over our lives, we find that mass marketing is diminishing. Products are now tailored to fit the needs of the consumers. Instead of consumers having to search for the perfect product, they can create one. Companies such as Dell and Nike have adopted mass customization model. Another company that is taking Web 2.0 to the next level is Threadless, found at www.threadless.com.

Threadless, founded in 2000, is a company based in Chicago, which has a great online following at threadless.com. The company combines an online art community with a successful “community” e-commerce marketing model. The website allows anyone who registers as a member, which is free, to submit t-shirt designs. The designs are then posted and members vote for their favorite new design every week. There are about 1,500 designs competing during any given week. Each week, the top voted design gets printed and sold on the website, so every week the number of t-shirts available on the site changes and grows. The t-shirts sell because the community chooses what they like most, guaranteeing profits. 

Compensation is given to the winning designs in the amount of $2,000, with further money prizes awarded to those whose t-shirts get reprinted, giving contributors an incentive other than recognition. Students take note- if your design wins, you can win a $3,000 scholarship instead of the $2,000 cash, no water what you are studying! Watch the video to see how Threadless got started and how customers run the business.

Through their mass customization and community business model, Threadless became so popular online that they were able to open two retail stores, both located in Chicago, and also allow wholesalers to apply to sell their t-shirts.

Threadless employs both the openness and sharing principles of wikinomics, which creates mass collaboration and economic value based on peer production. These principals are reached by allowing an open door policy at their warehouse, giving customers the opportunity to stop in and look around. Also, other sites would usually shut down or put limitations on rogue competitions that they can’t sanction, but Threadless encourages them! There was a Threadless minimalism contest that had about 50 participants.

Several years ago there was a Threadcakes competition, where bakers made cakes based on Threadless tees. Threadless thought that the idea was so good that they sanctioned it and helped run the competition, giving cool prizes and inviting judges for the contest.

After the success of Threadcakes, Threadknits was created- a contest based on kitting designs based on Threadless t-shirts. These designs were crazy! A community knitting woolly mammoths and  cows jumping over a moon is pretty awesome if you ask me.

As explained earlier, the entire company survives because consumers share their ideas with the company. While starting off with a small investment and not charging a usage fee, the company was able to encourage a large peer-to-peer network, encouraging collaboration without a formal hierarchical structure, which in the wikinomics model is called peering. The success of the sharing process is evident in the fact that for the first 8 years of business, Threadless didn’t do any type of advertising. Their community was built on word-of-mouth marketing, and continues to thrive the same way.

Threadless also has an international following, with community members not just from the United States, but also from Europe to Australia to the Domincan Republic to Canada to Germany. Threadless is still growing, but they are already acting globally! In a recent project, Threadless sent flipcams to community members across the globe, letting them record how they feel about Threadless.

Threadless is taking advantange of all things Web 2.0 and doing a good job at it! Not only do they know how to market on the internet, they create a great product; unique, well designed, affordable t-shirts (for men, women, children and babies), as well as hoodies, water bottles, bags, display art, and other good stuff.

Threadless broke new boundaries and bridged communication outlets by releasing a book in October of 2010, which was a ten-year retrospective of Threadless t-shirt designs and the history of the company.

Also, you may have seen Threadless on tv show Community recently, where Danny Pudi, who plays the character Abed, sported a Threadless t-shirt called “Water Balloons”, as well as the  “Infinity MPG” zip-up hoodie.

(These are the designs that are on the t-shirt and the hoodie. Click the link above to see Danny wearing the Threadless designs)

So what exactly does Threadless do for their community of designers, artists, consumers, and fans?

          - Well to start you can get paid $2,000 to do something you probably would have done for free, post a piece of your art online (only in this case it’s on a t-shirt). Designers can make an extra $500 for every batch of reprinted shirts.

          - You have the opportunity to vote on what you would like to see made and then purchase whatever you voted for.

          - If you are a member of Threadless, then you can earn Threadless store credits by linking to Threadless from other websites or through email, if the referral results in a sale. You can also earn store credits by submitting a photon of yourself wearing your Threadless tee (only 1 photo per t-shirt).

          - If you are a student than you could win an extra $1,000 for turning your cash prize into a scholarship prize and Threadless gives you materials to help convince your art teacher to work Threadless into the curriculum.

          - You can participate in other cool Threadless ventures such as Threadcakes and Threadknits.

          - You get to be a part of a community that is so cool there was even a contest for Threadless community members to submit soundtracks for the warehouse to listen to on 8tracks.com.

          - You can look at crazy cool art and buy some t-shirts for your wardrobe.