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Biometric Marketing: Targeting the Online Consumer

By Alexander P. Pons

Communications of the ACM, Vol. 49 No. 8, Pages 60-66
10.1145/1145287.1145288


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One of the axiomatic premises for marketing success is realizing and understanding customer needs and interests. In fact, a basic concept of marketing is that a firm solely exists to satisfy the needs and wants of the consumer. Therefore, a major challenge of marketing is to discover and understand a client's desires and interests in order to satisfy them. This becomes even more significant when dealing with Internet customers who have come to expect more personalization and customization from products and services than ever before. While a marketer can measure the amount of hits a Web site receives, and even from which computer the hits are coming, it is impossible to know who is actually moving the mouse. This creates a paradox for market researchers, since without accurate or sufficient consumer knowledge, opportunities or trends cannot be clearly identified, which in turn makes it difficult to satisfy the customer's needs. The result is a gap between what the market researcher believes the consumer wants, and what the consumer actually requires. Narrowing this gap for online consumers has been an ongoing endeavor that currently uses several methods to track a user during Web site visits. Cookies, login accounts, smart cards, credit cards, and digital certificates are collectively referred to as the "traditional method" for online marketing, but essentially are ineffective at associating Web site behavior to a particular consumer. The best solution would allow marketers to target individuals without ambiguity and would minimize the amount of superfluous and irrelevant information offered to consumers. This type of solution has important ramifications for online merchants, as lost advertising opportunities are critical, and efficient marketing is frequently a determinant of success in online retailing.


Through the application of biometric technology to marketing, the online consumer can be uniquely identified and associated with his or her individual profile.


Biometrics technology offers the potential to help marketers narrow the gap between their advertisements and consumers' interests by using uniquely identifying consumer characteristics to associate each consumer with his or her consumer behavior profile. Here, we explore the difficulties experienced by marketing researchers relegated to using the ineffective traditional method for online marketing, how biometric technology can be used to eliminate these difficulties, and how privacy issues related to the capture and storage of biometric data can be overcome to improve the effectiveness of marketers' efforts while protecting consumers from unwanted and unethical marketing campaigns.

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Traditional method for online marketing: low accuracy and unclear results

Currently, there are several techniques used to identify a consumer to an online system. These methods all suffer from the same drawback in that a direct link between a consumer and his or her Web site activity cannot be established with great confidence. For example, a Web site places cookies on a user's browser that link that browser to a specific client profile. Although this method establishes a connection between the Web site and the computer system, it does not do so between the Web site and the consumer. The consequence is a lack of accurate data about individual consumers, which leads to less effective consumer targeting.

A login account consists of a username and password combination that clients enter to identify themselves to the Web site. This method has its drawbacks as well. From a marketing point of view, a company cannot target its online consumers until they login to the Web site. Should they choose to not login, valuable opportunities for contact are missed. Complicating the issue further, users often share their login credentials with others, adding to the uncertainty of the user's identity. Finally, it is inconvenient for consumers to remember multiple usernames and passwords for various Web sites, which may make them averse to logging in unless absolutely necessary.

Smart cards, tokens, credit cards, and digital certificates provide other means of identifying a consumer to an online system. Unfortunately, these methods suffer from similar difficulties as those of the cookie and login techniques, since someone other than the owner can use them. In addition, credit cards and digital certificates are used during a transaction, limiting their ability to directly link any Web site activity to a particular consumer until the transaction is performed. These methods are evaluated using six criteria [1]: robustness (the level of trust), acceptance level (support by third-party processes), cost (hardware/software, communication, and support), ease of use, portability (extent of support across client machines) and security (privacy, integrity, and non-repudiation). It was concluded [1] that credit cards and digital certificates provide the most reliable means for overall identification, with credit cards having the advantage of being portable, since digital certificates reside on the consumer's machine.

The common underlying factor that distinguishes these identification methods from biometric identification is the low accuracy in tying a consumer to a unique profile; Web site activity, or clickstream (CS) data, cannot be associated to a unique consumer. Figure 1 depicts a home computer shared among four users whose clickstream data is collected by a marketing analysis system. The respective clickstream data from these users (CS1, CS2, CS3, and CS4) is combined to develop a single consumer profile that obscures individual consumer information that would help define a precise marketing strategy. In fact, the clickstream data of these users can be significantly divergent, making it difficult, or even impossible, to establish a clear consumer profile because these identification techniques are unable to establish precise ownership when the home computer is shared. For example, a consumer visits an online store that utilizes cookies to identify the consumer. The consumer initially accesses television products in the home electronics section for approximately 10 minutes, and then continues to the digital camera section. Although Web site activity reports indicate that a consumer accessed the Web site, we are unable to discern whether the consumer that entered the television section was the same consumer that conducted the search for the digital camera, since another consumer could have started to use the same computer to access the digital camera section. Therefore, it is not possible to ascertain that these two Web site activities are attributed to the same consumer; Web logs maintain the "what" and "when" Web site activity interactions are taking place, but not "who" is performing the activities at the Web site. However, through the application of biometric technology to marketing, with minimal effort from the consumer, the online consumer can be uniquely identified and associated with his or her individual profile.

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Biometric Marketing: Applying Biometric Technology to the Marketing Problem

A biometric is an individual's unique physical or behavioral characteristic that can be used to identify the individual precisely. A fingerprint, a signature, an iris pattern [6]each of these is an example of a biometric. Due to their exclusive nature [8], biometrics can be used to validate a person's identity through a process called Biometric Authentication [5]. Many believe that as these biometric systems improve and begin to be more cost effective, they will become more accessible to the public in current security systems. Today, many corporations and government agencies use biometric systems such as fingerprint verifiers. In the academic realm, several universities are adopting biometric technology to authenticate student users and monitor resource usage. The information gathered using the biometric technology will help universities to better understand their students, develop infrastructure plans, design course curricula, and allocate student support resources appropriately. By using biometric technology to gather profile data about their students rather than for security authentication purposes, universities can produce information for their marketing functions. Additionally, the proliferation of biometric technology within universities and other learning institutions will further its acceptance by the general public beyond that of other approaches, since these institutions are normally trusted, and students can become comfortable with the technology prior to their graduation.

As the use of biometric technology moves beyond government and security applications, several hardware and software companies have entered the market of electronic Biometric Authentication [4] for its online potential. An example is a biometric mouse that includes a fingerprint reader on the thumb side of the device, which takes less than one second to verify an individual's fingerprint and specifically associate any computer activity (such as keystrokes and mouse clicks) with that individual. By utilizing this type of technology, marketers could target consumers without ambiguity, since the consumers' precise activities on a Web site can be recorded and analyzed. This has broad implications for developing effective marketing strategies for online consumers, and benefits consumers by minimizing the amount of superfluous and irrelevant information to which they are exposed.

Accurate, individualized information would allow marketers to profile individuals more precisely and reduce the clutter that is characteristic of inaccurate advertising. If done respectfully and ethically, the entire marketing mix could be streamlined, while assigning a greater value to both parties of the transaction. The success of Customer Relationship Management over the last decade is strong evidence that personal treatment of customers can enhance an organization's competitive advantage in the marketplace. In Figure 2, the online marketing analyst is presented with specific user clickstream data (a one-to-one relationship between CS and consumer profile), which allows for greater precision in understanding the consumer. Biometric technology has high robustness, cost, ease of use, and security, but low acceptance and portability [1]. These issues in the near future can be overcome, since a mouse and keyboard can be equipped with standard biometric devices, which would lower the cost and increase the portability of these devices. Robustness, or trust, will expand as trusted third parties establish themselves between consumers and sellers.

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What About Consumers' Privacy?

Privacy issues cannot be neglected where tracking an individual's actions is involved. Unrestrained information gathering about an individual has the potential for abuse. In fact, unethical or unwanted marketing campaigns are something that most modern consumers will have targeted at them at some point in their lives.

In order for Biometric Marketing to succeed commercially, consumers must first learn to trust its implementers. There is ample evidence to suggest many consumers are willing to place their trust in certain organizations [3]. Consumers tend to trust large, identifiable companies with strong brand recognition. Consider the ratings feature at Amazon.com that allows a user to manually set the attractiveness of certain products, and thereby enables Amazon to provide recommendations to that user in the future. Casinos have offered frequent player cards since technology permitted such an activity. These cards track a patron's play habits and allow the casino to better tailor deals to that particular patron.

Biometric verification essentially is an extension of these techniques, which already are in widespread use. Nevertheless, companies must assure customers their information will not be misused, and will only be used for valid marketing purposes. For example, TiVo sells its aggregate viewer ratings, but not individual information. A third-party company might be able to position itself as a trustworthy intermediary and sell Biometric Authentication services, as Verisign has done for credit cards. These trusted third-party companies would provide a privacy seal to the online Web site that would increase consumers' confidence that their privacy would be maintained in accordance with the company's policies and procedures, upon the consumer's approval. In fact, by eliminating the identification information required for a transaction, it is possible for the trusted third party to associate biometric characteristics of an individual with his or her Web site activity without the need for identification. Therefore, the trusted third party would provide the market analysis system with the information (an individual's Web site activity) to develop a marketing strategy so that when the same biometric characteristics are transmitted to the trusted third party, it will expose the consumer to their specific seller-generated marketing strategy in accordance to the Web site's process.

Using our example, if the techniques of Biometric Marketing were applied, television-specific advertisements would be generated for the television consumer, including those for complementary products such as sound systems and recording devices, while advertisements for photo printers and other camera accessories would be generated for the digital camera consumer, when each consumer revisits the online store. This demonstrates how Biometric Marketing can enable marketers to develop marketing campaigns for individual consumers, and can help marketers greatly improve the success of their campaigns through the quality and effectiveness of targeted advertisements. The success of Biometric Marketing relies significantly on the establishment of these trusted third parties to gain consumers' confidence that their private information will be securely and confidentially maintained, similar to their trust in credit card companies, credit agencies, and other financial institutions.


Future research into the use of biometric technology in online marketing applications must consider not only technological feasibility, but also social and legal acceptability.


Future research into the use of biometric technology in online marketing applications must consider not only technological feasibility, but also social and legal acceptability. Consumers must be convinced that Biometric Marketing will benefit them. Keep in mind that many consumers are wary of marketing in general, and will likely be reluctant to facilitate marketers' efforts.

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Conclusion

Given this discussion, the solution to the problem of developing an accurate and targeted marketing strategy for online consumers is the use of biometric technology to unambiguously associate a particular consumer with his or her profile, irrespective of the number of individuals that share the same computing system or login credentials. This is promising, since due to security concerns and more affordable cost levels, computer systems equipped with biometric devices, such as a mouse equipped with a fingerprint scanner, will become more common in the near future. Additionally, the introduction of biometric technology in the university environment will eventually make the technology and its use become second nature to students, thereby providing a scenario for increased popularity of the technology.

Harnessing the power of biometric technology in online marketing applications will help marketers narrow the gap between what a consumer wants and what their companies determine their consumers need. Improved marketing strategies translate into further satisfied consumers and more effective and responsive companies. While certain privacy issues associated with storing and extracting an individual's biometric characteristics must be overcome, as trust evolves with biometrics, the use of the technology will follow a path similar to that of online transactions in recent years. The result of this application of biometric technologyBiometric Marketinghas the capability of becoming the most common approach for marketers to target consumers with advertisements that produce the greatest benefits for both their companies and their consumers.

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References

1. Basu, A. and Muylle, S. Authentication in electronic commerce. Commun. ACM 46, 12 (Dec. 2003), 159166.

2. Bromba, M. Bioidentification, 2003; www.bromba.com/faq/fpfaqe.htm.

3. Daignault, M., Shepherd, M., Marche, S., and Watters, C. Enabling trust online. In Proceedings of the Third International Symposium on Electronic Commerce (ISEC'02), 313.

4. Desmarais, N. Body language, security and e-commerce. Library Hi Tech Journal 18, 1 (2000), 6174.

5. Jain, A.K., Hong, L., and Pankanti, S. Biometric identification. Commun. ACM 43, 2 (Feb. 2000), 9198.

6. Janbandhu, P. and Siyal, M. Novel biometric digital signatures for Internet-based applications. Information Management and Computer Security 9, 5 (2001), 205212.

7. Pankanti, S., Bolle, R., and Jain, A.K. Biometrics: The future of identification. IEEE Computer (2002), 4649.

8. Reid, P. Biometrics for Network Security. Prentice Hall, 2004.

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Author

Alexander P. Pons ([email protected]) is an associate professor of Computer Information Systems at the University of Miami, FL.

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Figures

F1Figure 1. Traditional method for targeting online consumers.

F2Figure 2. Biometric marketing identifies unique user profiles.

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