Today’s Cache | Trammelling Big Tech

Today’s Cache is a column on the happenings in the world of tech and corporations.

Published - April 25, 2022 05:38 pm IST

In late 1940s Harvard Professor James Culliton said that a marketing manager must be a ‘mixer of ingredients.’ That idea caught a fellow colleague’s attention, who coined the phrase ‘marketing mix’ and made it popular by the 1960s.

In a 1964 paper titled ‘The concept of the marketing mix’, Professor Neil Borden, explains what the phrase means, and suggests that a manufacturer use a combination of twelve ingredients to sell what they make.

While the idea was still pollinating within the academic circles, another American Professor Jerome McCarthy bridged theory with practice. He crystallised the dozen ingredients down to four with each word starting with the letter ‘P.’

The 4Ps - - product, price, place, and promotion – was born, and then evangelised by Professor Philip Kotler in the 90s. And in subsequent years, few more words were added to expand the marketing model.

In recent years, technology has changed the face of marketing. Corporate blogs, online communities, and social networks have redefined the way people connect with brands, sellers, and information about products. Within this space, social networks and app stores have gained significant advantage over other mediums, primarily because of the network effect it offers.

These platforms allow a large number of customers to interact with each other, which help them pick granular data about people’s preferences and behaviour. That information is in turn sold to brands to place targeted ads.

This type of targeted ad placement benefits brands by letting them reach specific number and type of people - - a dream for the marketing managers of the 1960s.

The result is a win for large platforms and brands, but at the cost of customers’ privacy. That’s why regulators have been trying hard to make platforms responsible when it comes to using its users’ data.

On Saturday, after an all-day meeting Friday, lawmakers, governments and the European Commission finalised provisions for the Digital Services Act (DSA), one of a range of laws intended to bring big tech companies like Apple and Meta to fall in line.

The legislation aims to restrict social networks, app stores and content-sharing platforms from pushing targeted ads. It also requires sites to take down illegal content.

The final agreement also gives EU’s antitrust regulator power to examine algorithms with over 45 million European users, and to impose fines as high as 6% of annual worldwide turnover.

The law seeks to outlaw nudges or site design platforms use that push people to take unwanted decisions. The lawmakers consider these “dark patterns” as deceptive and manipulative.

The law is intended to “upgrade the ground-rules for all online services” in the EU, according to European Commission President Ursula von der Leyen.

The move by EU regulators and lawmakers will force brands and marketing managers to concoct a new ‘marketing mix’. And more importantly, it will make Big Tech firms that sell ad space to re-think how they plan to capture, store and use people’s data.

Borden stated in his 1964 paper, “Marketing is still an art, and the marketing manager, as head chef, must creatively marshal all his marketing activities to advance the short- and long-term interests of his firm.”

The new rules, coming from EU, could once again make marketing managers and platforms creative in the way they advertise and sell products keeping user privacy in mind.

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