Listen to Pandora, and It Listens Back

Description:  After years of customizing playlists to individual listeners by analyzing components of the songs they like, then playing them tracks with similar traits, the company has started data-mining users’ musical tastes for clues about the kinds of ads most likely to engage them.

Source: NYTimes.com

Date: Jan 4, 2014

online-music-services-compared2

A few services, like Pandora, Amazon and Netflix, were early in developing algorithms to recommend products based on an individual customer’s preferences or those of people with similar profiles. Now, some companies are trying to differentiate themselves by using their proprietary data sets to make deeper inferences about individuals and try to influence their behavior.

This online ad customization technique is known as behavioral targeting, but Pandora adds a music layer. Pandora has collected song preference and other details about more than 200 million registered users, and those people have expressed their song likes and dislikes by pressing the site’s thumbs-up and thumbs-down buttons more than 35 billion times. Because Pandora needs to understand the type of device a listener is using in order to deliver songs in a playable format, its system also knows whether people are tuning in from their cars, from iPhones or Android phones or from desktops.

So it seems only logical for the company to start seeking correlations between users’ listening habits and the kinds of ads they might be most receptive to.  READ REST OF STORY 

Questions for discussion:

1. Do you feel companies that are trying to differentiate themselves by using their proprietary data sets to make deeper inferences about individuals and try to influence their behavior is ethical? Why or Why not?

2.  If you were a company that had access to this type of data, how would you price this type of asset in the marketplace?  Who are your potential customers ?

Algorithms        iPhones or Android        

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18 thoughts on “Listen to Pandora, and It Listens Back

  1. ...

    I think the companies try to differentiate themselves by using their proprietary data to make deeper inferences about individuals and try to influence their behaviour is not ethical. Because different people have different music styles, they do not need to be influenced. The company should accept the divers’ tastes of their customers. According to the responses from customers, I will category my data into many different options. I will offer several days of free music to the customer. Then, I will make final decision to price it. The most popular music labels it the highest price. Labeling the music with lesser listeners is a low price.
    If I were a company that access to this type of data, I will record the data based on the actual responses from the customers. Keeping track every music listener taste is necessary I think. Depending on my records, I could make a right decision on the price. I will not try to influence the similar age group to listen to the proprietary data. My potential customers would pick up from the proprietary data I guess. Anyway, I do not think recording the data from the listeners can make a really right decision to classify the different music.

    Reply
  2. Amber Siemens

    In my opinion, I believe that these companies like Netflix and Pandora, are acting ethical. We show trails of everything that we do in our lives, that they are just analyzing this information currently and utilizing it to maximize their revenues. These companies are not taking our personal information. The most they are “taking” from us would be our location in the world. But really, we have a GPS on our phone now, so is it really even the company? I would prefer to know what is going on around me rather than in Europe or other places in the world. When companies like Netflix, see the movie or T.V show you have watched, and than categorize other entertainment that is like what you are watching, they are taking their best estimate on what you could be interested based on past views of entertainment. I believe that it doesn’t try to convince what you should like or hold a large influence with buying your entertainment. I believe it is more like direction, because once again, the entertainment industry is so huge, its hard to go through all the movies and shows for you to decide what to watch. It’s more of a guide for you. You have your own choice, they are just reacting to the action. I personally use songza on my Iphone, and with that I press the “thumbs up” when I really enjoy a song or I press the “thumbs down” when I don’t enjoy a song. It then knows not to play a song I don’t like, when that play list comes on again. The potential customers in this market would be those who purchase products and services, especially with consumers from ages 12-55.
    I believe this is definitely a strong asset within a company I believe companies would pay a high price to gain access to this sort of information and have it analyzed to their benefit. . It can extremely benefit any company in many different areas. It would create more research about your target market and what kind of behavior patterns your consumers carry. The efficiency and consistency would form great success.

    Reply
  3. Paul Hruby

    This sort of goes right along with the DNA database thing we were going over in class. I honestly think as a society we’re becoming more and more comfortable with the fact that we have no privacy. It’s funny to think that the world population has doubled in size over two times just in my lifetime, yet due to MIS and big data, we now know more about individuals than ever before. Interesting that technology for collecting and processing data is developing even faster than our massively increasing population.

    So I guess I’ve sort of danced around the question, do I think it’s ethical for a business to find out who you really are and then market to that person? Not really. But because of the fact that it’s happening so often and it’s just a part of life now it seems, I’m quite accepting of it. I guess although I feel like I should be entitled to allow a business to use only the information about me I want them to know, I understand the fact that by using various services like facebook, shazam, etc. I’m asking for their services (which most are absolutely amazing and mind bogglingly useful) so anything they collect about me during my use, is actually sort of theirs?

    Oh my gosh to answer question two I would just do it based on supply and demand. If my service was offering me information about potential customers which another business would find useful, I’d charge them based on their perceived value of said information. Like it talks about in the article I would charge people looking for votes from all most likely candidates an arm and a leg to target said voters.

    That said though, I’m actually finding that a lot of this information is being freely given away over the internet as well. Little background here, I own a painting franchise, which operates in only a specific area of Calgary. There is now a service on Canada post which allows me to look up a certain area of Calgary (so I can put in my turf) and set criteria such as 30-80 year olds who own there homes with a household income over $80,000. They then show me a map of where my would-be mail could be delivered for FREE. It also gives me the percentage of homes on their mailing routes MEET THIS CRITERIA, FREE! I know which areas of my turf have 50% -80% of homes fitting the “ideal” candidates for needing painting, and I can concentrate my marketing in these areas. Again this info was FREE.

    So in conclusion, I think every business is a customer for this data, and every business would pay what it is worth to them for targeted advertising, although sometimes the data is free.

    Reply
  4. Stacey Ridler

    In my opinion companies using this proprietary data to conduct inferences and influence consumers behavior is completely ethical. I believe this to be ethical because as individuals we all have a choice as to what we want to view, purchase, or participate in. When we complete surveys or send information as to our likes and dislikes one has to think how are companies using this information. I for one like the ways in which companies utilize this information and present me with similar interest in different areas of readings, music, news clips, financial statements and more. Individuals like real time information and when it is at the ease of clicking a button from an add in the sidebar that saves me time trying to locate such information in this world of Big Data. With evolving technology we have seen the generations of computing reach astounding levels, and this is the next one. This also speaks to the market and how businesses are utilizing the resources individuals are providing them with their current and trending interests. The concept of influencing our decisions is an interesting one; we are faced with these decisions every day. In classes we are constantly questioned on what we think as our professors influence our ways of thinking and perspectives, how is this any different. It is the choice of the individual to decide on whether to buy into the products or services being offered. With these offerings businesses can better access what individuals are seeking and meet the needs and wants of consumers. So to answer the question, yes this is ethical and I think a very smart trend.

    I currently run my own lash extension business and would price this type of an asset quite high in the market place. To see how my clients react to certain music, styles, what their likes and dislikes are and when they choose to spend would be of great advantage. I could spot compliments to go along with my services or share with other companies to increase client satisfaction and retain customer loyalty. Spotting trends and taking my clients to the next generation of ‘lash applications’ would increase my business revenues and increase my client database. This type of asset could be prospect for many areas of business and the potential customers would be consumers. Consumers of transactions, purchasing services and products would be the potential market.

    Reply
  5. Xiao Yang

    In my opinion, I think companies like Pandora that are trying to differentiate themselves by using their proprietary data sets to make deeper inferences about individuals and try to influence their behavior is ethical. Because these sites are only based on your past records to guess the kind of music which you would like, and give you some recommendations. Actually, they just collect and analyze your personal information in order to provide the services. They seek the similar style of music you might be interested in even though you have never heard before. It is useful and helpful if there are lists of things you like, you have the choice to listen to it or not. They wont make any decision which you don like. I think this is a great approach which can improve the user experience. The user are able to gain more and more satisfaction via this way.
    For me, If I were a company that had access to this type of data, then I would use the information as much as possible to know the customer’s preferences which can give me an assist to produce and service. Customer service is increasingly essential these day. If you want to survival in long-term business, it is better to gain more competitive advantages in the market place. I believe young people are our potential clients. Compared to the old, the youngster will be easier to accept new things with curious attitude. So they are more likely to be our target customers.

    Reply
  6. Janine Hawkins

    Companies using algorithms to develop customized product recommendations to individual consumers is increasing in popularity. Multiple industries are taking advantage of this personalized sales technique. For example, internet advertisements are chosen and displayed based on our browsing history. Additionally, grocery stores track our purchases and deliver coupons to customers based on what they have bought in the past. Whether we like it or not, this individual research and advertising has become a fact of our lives. Although many people may see it as an invasion of their privacy, there are benefits to it. For instance, it is easier to obtain products that we want because the information pertaining to them is displayed right in front of us. Companies using this technology also benefits because they don’t have to undertake large scale advertising campaigns that have the potential to fail.
    I personally feel that this type of data collection is ethical if the companies using it inform consumers that their behaviours are being tracked. Additionally, consumers should be able to find out what information companies are collecting and how this information is being used. There should also be a way for consumers to opt out of having their habits tracked. Consumers choosing to not have their habits tracked should be able to avoid this tracking free of charge. In this case they will receive generic advertisements. If people want to avoid advertisements all together, they should have to pay a fee to the company. I think this is reasonable because most websites receive the majority of their revenues from advertisements. These companies need a way to profit even if they don’t display advertisements.

    Reply
  7. Shawn

    There are two sides to each story and for the first question I feel one answer doesn’t apply. Is it ethical for companies to differentiate themselves by using their proprietary data sets to make deeper inferences about people which can help influence behavior? I think what companies like Pandora and Netflix are doing is perfectly ethical. I believe that they are using this strategy to make their products more efficient and enjoyable for the user. If I sign up for Netflix or Pandora then I am perfectly fine with them analyzing my tastes and recommending music or movies for me because that is something that happens in everyday life and most people like being recommended music or movies. However I do feel that companies will begin to take it farther and then it will become unethical. I for one do not like that Facebook advertisement start to show web sites that you have visited. I did not sign up to Facebook for advertisement purposes especially if it is going to mine my personal data for the sole purpose of selling me stuff and I find it no different than telemarketing. I understand that using these data sets can really help companies and products stand out from the competition but there has to be guidelines because of they can analyse music tastes what else can they analyze and I think that has the potential to really affect the market in an adverse way. When companies can influence your behavior because of your internet searches and movie tastes that gives them a lot of power. This is a power that should be regulated and if it is not then I do think it is unethical to use data sets to influence behavior for profit.

    Reply
  8. Jessica Larsen

    I think to determine whether companies that are trying to differentiate themselves by using their proprietary data sets to make deeper inferences about individuals are ethical or not depends a lot on what type of information is collected and how the information is used. Like Pandora or Amazon, if the data collected about customers is used to help companies find out more information about customers so they can recommend other products customers might enjoy, I believe companies are acting ethically. But if companies are using the information to target customers with certain ads, to be ethical I believe it must be clearly stated in the privacy policy how the information gathered will be used and what types of data will be gathered. An opt out feature like the one on Pandora is also necessary in my eyes for a company to be acting ethically. If this is the case since no hurt has come to the customer in either situation the companies are acting ethically. There is a grey area about the type of information collected when information regarding political affiliation or religious beliefs is used. Though I don’t think collecting this type of information in completely unethical, it is not completely ethical either. It depends on what the information is used for.
    If I were a company that had access to this type of data, I feel that the price in the marketplace would depend on the type of data. If it was a large amount of data that gave a lot of useful information about individuals, their buying habits, and their lives I think the price for it would be pretty high. As the amount of useful information decreases, the price also decreases. Potential customers of this type of information would probably include telemarketers, people who send out spam, and maybe political parties if there was information about political affiliations. Small companies would also be a potential customer. Since they have less of an advertising budget this information would be most useful to them so they can target individuals who are more likely to buy their products.

    Reply
  9. Jericka Versikaitis

    I do feel that companies are trying to differentiate themselves by using their data to connect with consumers on a different level. However, trying to understand and appeal to your consumer is one thing but I think trying to influence their behaviour is unethical. If we really think about it, companies have always been trying to influence peoples decisions and behaviour such as celebrities and their beauty trends or style of clothing. Clothing companies can easily pay a celeb to wear their clothing only to appeal to that celebs fan base which usally will follow suit and buy said clothing brand. This is no different than keeping track of more personal information to target ad’s on an even more personal level. I believe both unethical but in a way they aren’t at the point where they are crossing a line.
    This would be a huge asset for the company to have in terms of marketing. If a marketing group had access to all the collected data, then they have a competitive advantage as to how and to who they want to market to. Having this kind of step ahead of other companies would be a huge asset and i’m sure would be easily priced out fairly expensive. It’s a great method but collecting billions of personal information on billions of people would not be a very cheap thing to do either. My potential customers would be the big names already such as netflix or itunes or maybe a company that’s just starting out but will to take a risk to get ahead.

    Reply
  10. Rémi Cizeron

    Are companies have a moral? It is also a question that may arise. What is the primary purpose of a business? Earn money. The means by which the companies will get there will sometimes be at the limit of ethics. But ultimately, what are the companies really looking for? To satisfy ourselves that the product the company’s selling is the best and not the competitor’s one. So we could say that it is for our good. Simply the means to get there are different. Use the data collected by business is normal for me. It is rather well since the ads are more targeted and therefore are probably more interesting for me. For me, the ethical side will depend of the ad. If I am offered conventional products or services that have no links with really personal things, for me it remains ethics. If it starts to feel more sensitive issues such as policy or guidance, this is much less ethical in the sense that it is the intrusion into the personal lives of people and it does not happen.

    I think this kind of data is very expensive. We can analyze and extract a lot of information. Musical tastes, videos or other, are very representative of a person.
    My potential customers would be big businesses. Because they must have the financial resources to pay and technics to analyze them. They are very long and costly analysis.

    Reply
  11. yuxuan.hou

    yes, for my personal opinion, there is no doubt that the behavior of like Pandora and Netflix do is ethical, basically. Pandora and Netflix just want to improve their service quality in order to get competitive advantage in the market, in most situation, they just provides some suggestions to their customers in order to provide better service. they collect information of customers. if i were a customer of them, i would like to accept their operate model, if i like their suggestion, i would accept it, otherwise, i would skip it.
    if i were a company, i think this is a powerful asset in the market world, company can get benefit from their customers through provide data they selected, moreover, they can get advertisement sponsor through implant advertising.

    Reply
  12. Dani Rasmussen

    I feel that companies who use proprietary data sets to make deeper inferences about individuals are not being unethical because I believe they are only trying to really understand their consumers so that they can offer them a wider variety of options of things that the consumers are interested in. Say for example I like country music and I am searching for some new country music, and the company has already created a playlist of country music that they think I could “potentially” like and I do, then in the long run they are saving me time by having that pre arranged. I also see it as that company taking the initiative to try and get to know me better as a customer and prepare me with things that I like. People may see this as in invasion of privacy because it is on the internet but I do not see it any differently then going shopping for an outfit to the mall and describing what I like to a retail employee and having that employee help me find something in a clothing store. If I owned a company, I would value this data extremely because you know your consumers interests and likes so with that knowledge you could potentially narrow out the product selection that they could potentially want and make it a more seamless interaction with the customers. Being able to provide consumers with the products they want gives you the competitive advantage and is the key to being successful.

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  13. mina omidian

    I feel like companies such as Pandora, Amazon and netflix are not doing anything unethical in the sense of influencing behaviour. they keep a record of what we have done. for example with netflix after I watch a movie the company gives me suggestions of what I may like to view next which is helpful because at least it gives me somewhere to start since there are so many movies on netflix it is hard to tell what I would like. It is not as though they force me to watch it and therefore has no real influence on my decisions. The same thing goes for amazon as well they can see by what i have purchased what I might like which is helpful to me and I don’t have to use the suggestions that are there its not as though they are influencing me but more like helping.
    If I were a company this would be a huge asset for the company to have especially in a marketing sense. because if a marketer had access to all the files then they have a competitive advantage as to how and to who they want to market to. they will know which person likes what and find a way to let every single person buy into what the company is selling. Any advertising company would love to have access to what people like and dislike and I am sure there are lots of companies out there that are willing to pay a lot to have it.

    Reply
  14. Bailey Bruised head

    Yes I believe it is ethical, the companies use the data for a specific purpose and with that it helps each company build strong customer relationships and that is a key in any business. To the people who use these types of services it is very beneficial for them instead of having to search and search for what they like it is right there for them, with easy access they are able to use it right away. If used on daily basis like Pandora all you have to do is click a few buttons and you are good to go. Being able to influence their behavior is helpful because it makes the service more useful if there are lists of things you like, you either have the choice to listen to it or not too they are not making you do something you don’t want to. On Netflix the certain suggestions make me feel more comfortable in a sense that this certain service is almost made for me personally because most of the time I like to watch what is suggested for me, the information they collect is used in the right manner which is very ethical for each company.

    Reply
  15. mogounn ornella cleone

    yes i personally think that it is ethical for a company to try to differentiate himself by using their proprietary data sets to make deeper inferences about individuals and try to influence their behavior, because by doing that, they are not making any intrusion in our personal lives.I believe it is to our own benefit, because instead of having to search for all the kind of songs or all the kinds of movies you would like to listen to or watch,websites like Pandora and netflix brings it up to you.personally, i love medieval war movies and each time i finish watching one, i don’t have to search further to get in touch with other related movies because they are directly being proposed to me, and it is up to me to watch it or not. If i were a movie company that had access to this type of data,then i will use the information as a guide, to know what to produce in other to gain competitive advantage over the market place.It is as well known that customers taste changes with time,with such relevant data, a movie company will know what is his customers wants at the time, is it vampire movies?, heroes,classic or medieval type of movie?. I believe this method of operating is very beneficial to both parties involved.Though i also understand that many organizations now are not merely collecting details about what we watch,what we listen to ,where we go and what we buy, but are also making inferences about who we are, i cant steel find it harmful for their services remains optional .

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  16. Simone Olmstead

    Yes I do think that companies are trying to differentiate themselves by using their proprietary data sets to make deeper inferences about individuals and try to influence their behaviour and yes I think this is perfectly ethical. To me this is fine because your already using their service so they are only making suggestions about other artists you may be interested in. If your using their service and they are gathering data from their own service then I don’t see any ethical issues with that. Personally I use Netflix and I like it that they make movie suggestions to me. Ultimately it is my choice if I choose to watch it or not, but they can suggest all they want. For me I feel that they value me as a customer and are trying to help my overall experience with them. Sometimes these companies may suggest something that the customer never would have seek out and therefore provided really excellent service. But if the customer doesn’t like the suggestions then skip my it and move on.

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  17. Adam Houtekamer

    I believe that this behavior is perfectly ethical. This is because these companies are simply trying to improve their service by bettering it. With the case of Pandora it wants to suggest to you music you would enjoy and make it accessible where you want it. They are collecting information from you and those similar to you to provide to you more of what you want. While this information is being used to advertise specifically to you as an individual and it is still your choice to click on it. Whether you do or not is irrelevant and the reason I believe this is an ethical act is because they are simply trying to cater to what you like. They take the things you like and show you things you may also like so… what’s not to like? While I personally am not clicking on any adds I would rather they try to sell me some cool new beer rather than hearing aids.
    This information and its analysis can be extremely valuable and should be priced accordingly. This is because it allows companies to understand their demographic and what they prefer. So it almost goes without saying those who would be willing to purchase such information would be either in the same industry or interested in the same demographic. For example Netflix collects information on what people prefer to watch, they see who watches what and how old they are – all information acquired through their service and subscribing to it. Movie producers could purchase this information and use it to decide what type of content to produce and distribute in order to take advantage of what is popular in the marketplace.

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  18. Jodi Berry

    I personally believe that what websites like Pandora and Netflix do is ethical. I am an avid user of Netflix and can appreciate the suggestion of what I should be viewing next. These websites are not taking personal information, but rather interests and general location. I would prefer to see an ad for my city than one that is halfway across the world that doesn’t even pertain to me, and I would rather get a recommendation for a movie I may actually enjoy rather than one that I have zero interest in. I myself don’t believe that this is overly persuasive of the companies, and I believe that they don’t hold a very large influence over my buying habits.
    This is a huge asset in the marketing world. Companies that gather this kind of data can present ads to consumers that they are more likely to click on. That being said, I think that they can get away with charging more to advertise on their site than a regular because the success rate of their advertisement is more likely higher than those who don’t use this technology. This is a great asset to small local business. They can advertise on a website that knows your location, and are targeting a market that is only their own, while probably getting their message out more than using a different medium to do it. I think that because of the personalized ads these sites will get more business from advertisers, and the consumers will get ads that actually pertain to them.

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