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|CHAPTER 17 Direct, Online, Social Media, and Mobile Marketing 555

our computer, phone, and tablet screens flash with unwanted online or mobile display ads,

pop-ups, or pop-unders.

Beyond irritating consumers, some direct marketers have been accused of taking unfair

advantage of impulsive or less-sophisticated buyers. Television shopping channels, entic-

ing Web sites, and program-long infomercials targeting television-addicted shoppers seem

to be the worst culprits. They feature smooth-talking hosts, elaborately staged demonstra-

tions, claims of drastic price reductions, “while they last” time limitations, and unequaled

ease of purchase to inflame buyers who have low sales resistance.

Fraudulent schemes, such as investment scams or phony collections for

charity, have also multiplied in recent years. Internet fraud, including identity

theft and financial scams, has become a serious problem. According to

the Internet Crime Complaint Center, since 2005, Internet scam complaints

have more than tripled to almost 300,000 per year. The monetary loss of scam
complaints exceeds $500 million per year.53

One common form of Internet fraud is phishing, a type of identity theft

that uses deceptive e-mails and fraudulent online sites to fool users into

divulging their personal data. For example, consumers may receive an e-

mail, supposedly from their bank or credit card company, saying that their

account’s security has been compromised. The sender asks them to log on

to a provided Web address and confirm their account number, password,

and perhaps even their social security number. If they follow the instruc-

tions, users are actually turning this sensitive information over to scam art-

ists. Although many consumers are now aware of such schemes, phishing

can be extremely costly to those caught in the net. It also damages the brand

identities of legitimate online marketers who have worked to build user

confidence in Web, e-mail, and other digital transactions.

Many consumers also worry about online and digital security. They fear

that unscrupulous snoopers will eavesdrop on their online transactions

and social media postings, picking up personal information or intercepting

credit and debit card numbers. Although online shopping has grown rap-

idly, one study showed that 67 percent of participants were still concerned
about identity theft.54

Another Internet marketing concern is that of access by vulnerable or unau-

Internet fraud has multiplied in recent years. thorized groups. For example, marketers of adult-oriented materials and sites
The FBI’s Internet Crime Complaint Center provides have found it difficult to restrict access by minors. Although Facebook allows

consumers with a convenient way to alert authorities no children under age 13 to have a profile, an estimated 40 percent of under-18

to suspected violations. Facebook users are actually under 13. Facebook removes 200,000 underage

FBI accounts every day. And it’s not just Facebook. Young users are logging onto

social media such as Formspring, tweeting their locations to the Web, and making friends with

strangers on Disney and other game sites. Concerned state and national lawmakers are cur-

rently debating bills that would help better protect children online. Unfortunately, this requires
the development of technology solutions, and as Facebook puts it, “That’s not so easy.”55

Consumer Privacy

Invasion of privacy is perhaps the toughest public policy issue now confronting the direct
marketing industry. Consumers often benefit from database marketing; they receive more
offers that are closely matched to their interests. However, many critics worry that market-
ers may know too much about consumers’ lives and that they may use this knowledge to
take unfair advantage of consumers. At some point, they claim, the extensive use of data-
bases intrudes on consumer privacy. Consumers, too, worry about their privacy. Although
they are now much more willing to share personal information and preferences with mar-
keters via digital and social media, they are still nervous about it. In one recent survey, some
three-quarters of consumers agreed with the statement, “No one should ever be allowed to
have access to my personal data or Web behavior.” Another showed that 92 percent of U.S.
Internet users worry about their privacy online.56

These days, it seems that almost every time consumers post something on social me-
dia or send a tweet, visit a Web site, enter a sweepstakes, apply for a credit card, or order
products by phone or online, their names are entered into some company’s already bulg-
ing database. Using sophisticated computer technologies, direct marketers can mine these