New research project investigates ethical issues related to customised marketing

This is the opinion of Niklas Sörum, Associate Professor of Business Administration at the University of Borås, who is now starting a three-year research project to investigate more closely how small and medium-sized companies handle customised marketing and how they relate to ethical issues.

"Personalisation is, for example, about tailoring services, products, or websites to an individual (the customer). Personalisation is often based on collected customer data,” he explained.

What problems do companies face in this regard? 

"These include issues related to the collection, storage, and use of customer data for the purpose of personalising the digital marketing.”

What is the ethical dilemma?

"It can be about issues that have to do with consumers' privacy, perceptions of privacy, and where boundaries can and should be drawn when it comes to issues such as how much and what companies should know about you and what power companies have to personalise content that the consumer encounters in the digital environment. These are questions that the project wants to research based on the companies' perspective on ethical aspects and issues that may arise in connection with the application of personalisation.”

What's in it for companies and what can they lose?

"Personalisation can lead to efficiency, competitive advantages, additional sales, increased conversion (Editor’s note getting visitors to your website) to meet the goals you set, relationship building, and more. The risks exist, for example, in relation to perceptions among consumers, such as loss of trust in the event of violations. It may be that customers perceive the companies as intrusive and persistent in their attempts to reach them. Personalisation can also be perceived as a threat rather than as something effective or desirable; it can be perceived as you as a customer receiving incorrect recommendations and it touches on aspects of privacy and privacy. Of course, there are also possible risks associated with issues related to privacy requirements and the handling of personal information, i.e. the legal scope for companies to apply customer data-based personalisation.”

A contribution to the development of guidelines for digital marketing practices

The objectives of the research project are to identify the use of innovative technologies in the application of personalisation and ethical issues related to its implementation, review the importance of ethical personalisation practices in small and medium-sized enterprises in Sweden, and understand how ethics are defined, applied and concretised through specific digital marketing practices, as well as to develop, discuss, and circulate guidelines for ethically based digital marketing practices,  personalisation, based on the results of the project.

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About the project "Effects of Ethics in Digital Marketing – A Study of Personalisation in Small and Medium-Sized Enterprises"

The project will run for three years until 2026 and is funded by the Hakon Swenson Foundation.

Niklas Sörum

Research area Business and IT