Data Protection and Consumers Right
Jascha Kaykas-Wolff, CMO @ Mozilla
Ascent Conference 2019
[00:00:01] So start back in 2004, this is around January and 2004, we’re outside of Chicago, just a little suburb outside of Chicago, and there is a small business run by a gentleman named Mike. Say some of you may know this story, Mike say shuts down his shop, heads down to his house, walks into his house to see his wife, which he does every single day that he manages the small business these days. A little bit different, though. He walks into his house to not see his wife, but to hear her. She’s in the kitchen and he hears her crying. And when Mike goes to his wife to ask his wife what’s wrong, instead of saying something to him, she hands him this piece of mail.
[00:00:42] I read through that he sees it and he doesn’t quite know what to look at, if there’s anything that’s happening in this mail that should have his wife crying until he sees his name and he reads right below, it might say daughter died in a car crash.
[00:00:56] And this is a real story, this is reported in The Wall Street Journal a few years back. And this is a moment in time where this particular brand, OfficeMax, represented something that actually happened that was tragic in this case family life, but they did something that impacted this family and that business and that’s what they broke the trust that they could have had with this family moving forward. And it was totally and completely avoidable.
[00:01:21] The story starts back about seven months beforehand when this tragic event did happen, in this case family and about a state over just one state over at a store, some of you may remember called all things remembered or sold tchotchkes.
[00:01:37] A family friend of the SAYES showed up to purchase a commemorative item to bring to the wake for the family daughter, and what that store was doing at the time is something that many of us practices in the businesses that we currently are a part of. And that was running a campaign to learn more about the customers. And in this case, that particular store, that chain, all things remembered, was asking one question to every single customer that purchased a product. That one question was, what’s the life event?
[00:02:07] That’s causing you to purchase this product and in this case, this is family. Told the store his family friend tell the store exactly the life event. Purchasing a picture frame for our friends, family whose daughter died in a car crash.
[00:02:23] And that clerk in the store entered the data and it should have been over with, I shouldn’t be able to retell the story to you. But that store, all things remembered, was struggling as many retail businesses had been over the course of the last few years. And as that business was trying to find alternative streams for revenue, they did what many of us have thought about and some of us have done, which was make their customer data available to a third party data broker. It’s a normal course of business taking that that you have a value. Finding more value from it and in this case, customer data. Was the path that all things remembered took? And that should have been the end of the story, I shouldn’t have been able to recount the story to you, but it didn’t end there. As many of us have considered in our businesses and some of us have done that probably many of us have done. We look to augment the customer information that we have in our systems by leasing or buying third party data, in this case not OfficeMax, but Office Depot, a competitor at the time. Was trying to run local campaigns in Illinois’s and the state surrounding to bring more people, more foot traffic into the stores, and in this case, they purchased data from a third party data broker. And this story should have ended there, but it didn’t because Office Depot and some of you may know this and OfficeMax actually combined. And when they combined, they did what businesses do when they combine, they found ways to create efficiency. And they did that by looking for the major points of value that they combine to help their businesses be more successful, oftentimes that’s looking first at your customer data. And in this case, Office Depot and OfficeMax together. Unwittingly ran a local marketing campaign in Illinois to bring more people into their local stores and in this case, Office Depot and OfficeMax sent a letter to the same family that forever breached their trust in this business. This isn’t a crazy story anymore. All of you are very aware that data breaches happen on a near, daily and weekly basis, at least those that we’re aware of. And oftentimes they happen not because we’re doing something disingenuous as a business, but because we don’t understand the key trends that are driving the breaches in customer trust. And we don’t have the right operational practices inside of our organizations to make sure that customer data is central to our ability to create long standing and trusted relationships with our customers. I’m going to spend just about 15 minutes with you a short amount of time, and during that time, I want to introduce you to a few consumer trends that are important enough for I believe you to take back to your businesses and start to discuss how these consumer trends could have a relationship and the way that you go to market in the future and hopefully most usefully today. Behind those consumer trends, I’m going to introduce you to four data practices that I and we at Mozilla called the Lean Data practices. And these are simple concepts potentially challenging to operationalize. But when you start to discuss them in your business, I believe can help put the best foot forward in creating, developing and maintaining strong customer relationships over time. My name’s Yasha Kaka’s. Wolf, I am the chief marketing officer for Mozilla. Some of you may be familiar with Mozilla because we built a product called Firefox. What’s unique about us as an organization is that we have consumer products like Firefox that are used by more than three hundred and fifty million people each month. But we’re governed by a not for profit. And that allows for us to both focus on profit as a business, but make sure that our mission is maintained and enduring. And because of that, we’ve been able to experiment with very closely focused practices around protecting consumer data over the course of the last 15 years. I came to Mozilla four and a half years ago after a career of over 20 years in technology, in technology marketing in particular at some of the biggest companies in the world like Microsoft, Yahoo! And it started into some of the biggest analytics companies in the world and a handful of startups as well. I share that with you because my career has found two really important threads to pull on that have helped myself and the teams that I’ve worked with be successful. The first is that I believe marketing as a function has an outdated operational model. And over the course of the last 15 years, I’ve been applying product practices and engineering practices, lean and agile in particular, and helping the teams that I work with be more efficient and have greater impact into the way the business works. That’s been supported by a long standing belief that technology, customer data, both individual customer data and transactional data can help inform a business by helping the marketing teams show their quantitative and qualitative impacts. That focus on marketing tech, starting back 15 plus years ago, helped me gain a very strong insight into the development of marketing technologies, starting back with transactional analytics to the point where three years ago, myself and a colleague of mine could be. Fuller, who’s a general partner in ventures in Los Angeles, conducted a set of research where we interviewed over thousand different companies that were building marketing technology, selling to marketers to do three things collect data, organize data and take action on the data. And at the time we found with over 2000 different companies. Providing marketing technologies to marketers. We were at the time at what we believed to be peak saturation in the industry.
[00:08:04] Flash forward three years after this initial research that we did, and we find ourselves behind consumer trend number one. Marketers now have more purchase decisions than we ever have, those purchase decisions are very squarely focused on helping us find software. That does three things collect customer data.
[00:08:28] Organized customer data and take action on customer data, that consumer trend that’s driving marketing operations has a very specific impact to our customers that we don’t understand fully. There’s an organization in Germany called Ghostery. That does three things they build consumer products, they build research tools, and they provide enterprise grade consulting to help teams understand how they are developing consumer protections for the customer data. We’re going to get to them in a moment. Businesses like Ghostery and the seven thousand plus technologies that sell marketing technology have done something to many of us who are marketers that it is important for us to recognize and call out, and that’s that as marketers, it’s made us quite lazy. We have an expectation that if we buy technology, just the mere act of buying that technology is going to solve the needs that our business has. It’s going to create for us some sort of a magic growth equation. I think we all probably heard about the promise of rumbas, some of you may have them in your house. We do at our house, I think about marketing technology a little bit like the Roomba. We have the promise that is going to clean our house, we turn it on, we leave for work, it turns on, it runs around the house for a few minutes, rams into a couple of chairs, sits underneath the couch and the battery dies. And that’s really the practice of marketing technology today. The promise is that it’s going to take care of all the things that you want and you need.
[00:10:01] Produce for you when you collect enough customer data, some way for you to create accountability for your marketing organization and find growth for your business, but the reality is that we’re just not there. It just doesn’t do that. And that laziness, that focus on just buying technology to solve our business problems has created a big gap in the way that we think about how our business is run. That gap is a gap that many of us just don’t really understand yet. If you think about the number of marketing technologies that you invest in as a company. And name them in your head right now, you’ll probably rattle off two or three, maybe four different significant investments that you’re going to make or have made, and that kind of makes sense. CRM analytics, maybe some optimization platform. When Ghostery went out and talked to 100 hundred different marketing executives a couple of years ago, they said the exact same thing. Those 100 different marketing executives said, I’m investing in three different technologies that do three things collect, organize and help me take action on my customer data. That’s important because that’s also the belief. That those marketers have. Of which they are introducing risk to their customer data. If I’m only investing in two or three technologies, I’m actually taking care of my customers because I’m only storing and collecting their data in a few different places, Ghostery, as I mentioned before, is a fairly unique company because they don’t just do research, they don’t just do consulting. They also build consumer products. They have a browser plugin that sits on millions of different browsers all over the world that’s able to take a look at all of the different interactions with companies and those companies, interactions with consumers and their consumer data. Ghostery went back to those same 100 different executives websites. To show quantitatively how those two to three different investments in technology showed up to consumers, and it’s quite staggering. While those executives believe that they were investing in two or three different companies, technologies that were interacting with their customer data, the risk profile that they introduced was significantly larger. More than 75 five different technologies were sitting on their websites interacting with their customer data. So consumer trend number one is pretty real as marketers, we’ve become quite lazy, we’ve done that in large part because there have been so many technologies that have promised just the investment in this technology helps us find our magic growth equation. And what it’s resulted in is a significant increase in the risk that we’re introducing to our customers on our websites that have the potential to breach the trust of our customers in the same way that OfficeMax did with the family. I have a business to run, I’m responsible for growth in that business, investing in technology is a part of the way that I work. So what? It hasn’t happened to me yet. Some of you may follow the research around companies across the world and the tracking indices of those companies around the world trust with consumers, some of you are probably familiar with the research done by Edelmann.
[00:13:12] Edelman’s a communications organization based here in the US that runs globally, that looks at that specifically, how are consumers trust with businesses increasing or decreasing? Over the course of the last few years, we have seen a trend, and that trend is that consumers trust in businesses in America in particular, are declining at a faster rate than any other country in the world. And in particular, the largest recorded population of people in history, the millennials.
[00:13:43] Are declining faster with their trust in businesses. It’s not terribly surprising that that’s the case. We read about it in the news every day. Company X breached customer wise data company X. Customers data is here.
[00:14:03] We’re introducing risk to our customers data in a capacity that we don’t fully comprehend and. We are seeing a massive decline in the trust in businesses from the consumers that if we are not selling to now, we will be over the course of the next few years. We talk about this, it moves on a very specific way, we are many of us responsible for technology. Businesses go to markets. We’re trying to build technology that people love. The problem is that as businesses, we’re not creating technology that loves people back in a meaningful way.
[00:14:37] Great, maybe you buy that we’re introducing risk to our consumers by introducing technology that collects stores and take action on their data. Maybe you buy that has a relationship into a decline in trust. But the business that I’m a part of is successful today. And we have a path for the next couple of quarters to be successful. The behaviors of consumers are changing. The importance of trust in your business is increasing. Three years ago, Musila began research that research was trying to find behavior trends in consumers around the globe. We were trying to find behavior changes in consumers around the globe with a very specific reason. We wanted to continue to position Mozilla and Firefox as a product and a business that would relate to them meaningfully. But what we uncovered, we think, is much more important than just something beneficial to our business. We found that consumers in the offline world were interacting with brands in a way that we hadn’t seen historically. Let me give you a very North American based example from a few years ago. Many of you probably had a friend or friends whom shopped at Whole Foods before Amazon bought them. And when you ask them why they shopped at Whole Foods, they give you an answer that was pretty simple. Well, I don’t have to worry about the quality of the products that I purchased when I buy from Amazon, it’s always going to be the best or at least competitive with the best. But when you poke down a little bit more, because Amazon or previous Amazon Whole Foods was much more expensive, when you poke down a little bit, they said something else that was interesting. They said, well, there’s another aspect of Whole Foods that I like and I appreciate it. And that’s that they take care of their employees. They post their salaries in the break rooms. They provide health care to everyone and they support local farmers, their value bases, value based decisions. So we saw this interaction happening in the offline world. We are curious, does this exist online as well? Is there a combination of buying decisions? That’s both about what the practical value is that you’re getting from the product or the service and has a relationship and the values of the organization that value values based buyer, something that we thought was interesting and didn’t know if it showed up online. So we went out and we did research that was a decent size and eight thousand plus people, nine different countries around the world. And what we found is that offline buying behavior that value values based buyer existed online as well. And it wasn’t bound to a specific geography. It wasn’t just the developed countries, it was everywhere. We called this trend three years ago, the contest chooser. And the conscious chooser is a group is only interesting if it’s a reasonable size, so we followed this initial research with the quantitative study that found the size of this group. And to us, it was quite staggering. This idea of the value and values based buyer, while we understood and can represent it well online. Offline. Existed online as well. And at the time we did the initial research, we found it existed in about 20 percent of the Internet population. Do you think about that, the Internet, somewhere between three point two and three point six billion people. Talking about a billion person plus potential audience that cares not just about the practical utility of the product or the service that you’re delivering, but also about the values purported by that organization. To three trends thus far. We’re exposing our consumers data in a capacity that we probably don’t even recognize. There’s a massive decline that’s happening in the trust in businesses. Especially in the US and especially with millennials, and that’s matched with a future trend that we all need to be aware of, and that’s that there’s a population of people that makes up almost a third of the Internet now. Who care about the trust they have in the businesses that they work with, who make decisions not just on the utility of the product, but on the values of the organization as well.
[00:18:34] Maybe I buy these three trends, maybe I think they’re legitimate, but the reality is that every single one of us, when we sit in our board meetings or we sit in our management meetings, are being forced to perform, asked to perform, feel obligated to perform.
[00:18:47] And here’s the thing.
[00:18:49] We should be especially poor in marketing. Our responsibility is to think about how our business works and levers in our business that we can drive. Not be just effective at marketing. So when somebody challenges you that great trust is probably important or interesting, but really what I have to care about is profit. What I have to care about is growth.
[00:19:09] You can have an answer.
[00:19:10] We did a very simple study about two years ago, so a really simple longitudinal study. We took a look at a list of companies that fell in what was considered to be the 100 most trusted list is compiled by Survey Monkey and Forbes. And we matched the performance of the public stock for these 100 most trusted companies. And we compared it to the performance of the S&P 500, both of those indices over the last five years. And what we found is pretty staggering. It wasn’t just that the 100 most trusted companies performed better than the S&P 500. It was that the top 10 most trusted companies performed at 30 to 50 percent better on the public markets. It’s an interesting thing to wrap your head around when you operate as a business that’s ethical in your consumers, trust you, there’s a very high likelihood that you’re going to outperform your competitors. And we see that playing out not just in the research that we’ve done at Mozilla, but also third party organizations like Trust Across America. Do you think about that we’re exposing our risk of exposing risk to our consumers and the capacity that we don’t understand much greater than it could have, could have anticipated? We see a general decline in trust for businesses across the globe, really specifically in America and really specifically with millennials. There’s a change in consumer behavior that’s driving a different kind of a buying experience, one where there is a connection between both the value and the values of the product in the brand. And we see quantitatively that when you focus on trust as a business and your consumers tell you back, that’s what they believe in, that they trust you and they believe in your values, that you’re probably outperforming your competition.
[00:20:51] So the right question would be, what do I do?
[00:20:56] But want to increase trust and reduce risk and perform better. What do I do? Over the last 15 years, our organization has been focused on being a competitive business and incredibly hard to compete in a category with four the largest companies in the world as our major competitors and doing that with a focus on how do we collect the least amount of data necessary for us to inform the best decisions we can make and build long standing, trusted relationships that are consumers. Over the last 15 years, we’ve developed four simple conceptual practices that we call the Lean Data practices.
[00:21:32] Let me tell you what they’re.
[00:24:39] Simple in concept, in practice, there’s a lot of inertia that works against us. But it’s not just about the practices that exist inside of your business and what you’re operating with, it’s also how you put your first foot forward with your potential consumers. Your advertising practices have a relationship into how your customers date is being interacted with. In a very real way, and you have decisions that you can make as a buyer of media, of marketing tech, to actually knock practices that protect your customers data first.
[00:25:10] Organizations like ours take very specific stands, if we don’t like the way that consumers data is being protected or taken care of on third party sites, we will make decisions like that that we did last year to pull off our advertising off of Facebook. I’m not saying that’s as far as you need to go in your business. What I am saying is that as much as it’s important to think about your own site on property data protections for your customers to build trust, you need to think about it in your advertising practices as well. So you leave here today. What do you do next? I’d like you to consider thinking about how you talk to your management team about what trust means for your business, how you measure trust. I’d like you to think about the lean data practices and what I will tell you that these lean data practices are built in the same way that we build our software with open source principles. You can find them on get today. You can contribute to them. You can ask questions and feedback about them the most important. When you take a look at your marketing mix, when you take a look at your technology investments, if you start to have the discussions about these Lean Data practices, you have a better opportunity as a business to create a long and trusted relationship with your customer. Thank you.
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