ATLANTIC CITY, N.J. -- Alex Jefferson, e-commerce director at Proctor Dealerships in Tallahassee, Fla., loves how big data allows him to target used-vehicle shoppers with ads on social media.
For as little as 30 cents a click, he can reach a specific audience with ads that roll right on the Facebook newsfeed of current and prospective customers, Jefferson said.
The use of big data to target customers more specifically online and cut marketing costs was a hot topic at the Digital Dealer Conference & Exhibition that brought together dealership staff and marketing experts for a three-day confab this month.
But the happy talk was not without storm clouds.
Several session presenters noted a looming regulatory crackdown aimed at protecting consumer privacy. Big data is collecting data from multiple Web sites and crunching it to find shoppers.
Lawmakers and regulators from California to Canada and the European Union are pushing rules that require businesses to inform shoppers that they are being tracked online and that the data are being shared or could be shared with third parties, said Kevin Frye, e-commerce director for the 13-dealership Jeff Wyler Automotive Family in the Cincinnati area.
"There's a collision coming between big data and privacy," said Frye, who attracted a big audience to his session.
In January, California strengthened its privacy laws to require commercial Web sites to disclose to visitors if the sites are tracking personally identifiable information and whether third parties with site access can view that information as well, Frye said.
Draft rules in Europe would require companies collecting data to notify targets and get their consent before sharing the data, he said.
And in July, Canada's so-called anti-spam legislation goes into effect that warns of penalties of up to $10 million for organizations that ignore the desires of recipients regarding e-mails, texts and other electronic communications, said Barry Hillier, a Toronto marketing expert.
Last week Hillier detailed the legislation during a webinar for the Trillium Automobile Dealers Association, which represents 1,192 franchised dealers in Ontario. He is founder of ad agency Dashboard and Web site content manager Glovebox.
Hillier said the trend toward protecting the privacy of consumers and requiring express or implied consent for electronic communications was prompted by the minority of businesses that abused prospects with spam.
But the future of digital marketing will be one in which businesses will have to be increasingly careful about which consumers are solicited and about notifying them clearly that they have the right not to be tracked online, he said.
Proctor Dealerships' Jefferson said he is monitoring closely the intersection between big data and privacy concerns.
Jefferson said he doesn't worry about privacy concerns using the Facebook ads because he doesn't know who the recipients are.
Facebook has a tool that allows him to set the parameters where he wants the ads delivered, say, to used-car prospects within 25 miles of his store, and he pushes a button to have the ads sent to their Facebook newsfeeds.
"It's all anonymous," he said.
Jefferson said Facebook epitomizes big data because users are so willing to share publicly personal information about themselves, such as their locations, friends, employers and even movie preferences.
That allows for tight targeting with messages devised for their tastes, he said.
Compared with last year, Proctor Dealerships, which has Honda, Acura and Subaru stores, has quadrupled its Facebook advertising budget while shifting the money from display advertising. Jefferson declined to specify amounts.
He said Facebook ads cost the group between 30 cents and $1.50 for every visitor they attract to their dealership Web sites vs. $2 to $4.50 spent for Google paid-search ads. The Honda store, the largest of the group, sells about 175 new and used vehicles a month.
Jefferson said he's ready to navigate the balance between privacy and the effectiveness of data-driven advertising.
He said: "But I'm not sure anybody knows exactly where it's all headed."