Definition: Covert Marketing/Masked Marketing utilize practices that may be deemed deceptive to consumers by appearing to be provided by a third-party rather than the product or service marketers.
Covert marketing has been taking place even in traditional media but with much less threat than in the digital age. Consider editorial style advertisements in newspapers, they are obligated to be labeled as advertisements, they are not collecting data but only being presented as an eye catching tool. Covert marketing in the digital realm provides a two way communication, sending a message and receiving demographic information through tracking cookies and clicks. Messages are then fed back to that individual consumer that relate specifically to personal preferences. The line when this becomes covert is when the individual has not given consent or is unaware of the data collection and that data is then shared.
Most brands understand the negative impacts of using covert methods are not worth the short term payout. Google has recently learned their lesson by receiving a hefty fine from the FTC (Federal Trade Commission). A press release from the FTC states, “Google Inc. has agreed to pay a record $22.5 million civil penalty to settle Federal Trade Commission charges that it misrepresented to users of Apple Inc.’s Safari Internet browser that it would not place tracking “cookies” or serve targeted ads to those users, violating an earlier privacy settlement between the company and the FTC”. In this case a promise that cookies would not be used had been broken and the FTC took action on the consumers behalf.
The idea of personal information being taken and dispersed without knowledge or consent makes consumers question every form of interaction with a brand. Proper notification of changes, up-front disclosures, and frequent reminders when new actions occur can alleviate negative brand perceptions. When consumers feel as a brand is open and responsive to their concerns and needs they are more open to accepting the tradeoff of some privacy for enhanced features such as targeted material.