June 27, 2017

Is Tesla Motors a Hidden Warrior for Consumer Digital Privacy?

Amid the privacy intrusions of modern digital life, few are as ubiquitous and alarming as those perpetrated by marketers. The economics of the entire industry are built on tools that exist in shadowy corners of the Internet and lurk about while we engage with information, products and even friends online, harvesting our data everywhere our mobile phones and browsers dare to go.

This digital marketing model, developed three decades ago and premised on the idea that it’s OK for third parties to gather our private data and use it in whatever way suits them, will grow into a $77 billion industry in the U.S. this year, up from $57 billion in 2014, according to Forrester Research.

Storm clouds are developing around the industry, however, and there are new questions being raised about the long-term viability of surreptitious data-gathering as a sustainable business model. Two factors are typically cited: Regulators in Europe have begun, and those in the U.S. are poised to begin, reining in the most intrusive of these marketing practices; and the growth of the mobile Internet, and the related reliance on apps rather than browsers for 85% of our mobile online activity, have made it more difficult to gather user data.

Then there is Tesla Motors and its advertising-averse marketing model, which does not use third-party data to raise awareness and interest in its brand, drive desire for its products or spur action by its customers. Instead, the electric carmaker relies on cultural branding, a concept popularized recently by Douglas Holt, formerly of the Harvard Business School, to do much of the marketing heavy lift that brought it to the top of the electric vehicle market. And while Tesla is not the only brand engaging digital crowd culture and shunning third-party data-gathering, its success is causing the most consternation within the ranks of intrusion marketers.

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