The Secret Business of Behavioral Marketing from Social Widget Tools Like AddThis

Sharing content has become easier than ever these days.  Pull up any online publication and you’ve likely seen a “share” button from one of a handful of offerings that have dominated this space in recent years, like AddThis, AddToAny and ShareThis.  They offer a simple, free widget that publishers can add to their site, giving visitors a number of bookmarking options for a variety of web content.  The emergence of content sharing as a business has provided some very unique data sets for the companies behind these tools, as well as site publishers and advertisers.  But what’s the cost to web users when sharing comes so easily and so much data is being gathered to contextualize their browsing activity in real time?

AddThis is a top player in this space, encouraging content sharing across popular social networks. Readers can bookmark a given post on Pinterest, Digg, Del.icio.us, Stumbleupon, Google Bookmarks, Bluedot and other services with a single click.

Similarly, AddToAny lets users bookmark and share online content across social networking sites such as Facebook, Twitter and others.  Content can also be shared via instant messaging services and email providers.

Gathering Tons of Interesting Data

One of the fastest-growing businesses on the Internet is arguably the business of “spying” on Internet users.  Major social sites, even crowd favorites like Facebook, Twitter and Pinterest, collect users information, even if they say that the data will be never be used or sold for commercial purpose.  Finding a balance between providing a free service and maintaining a profitable business model, however, is where such social networks find themselves in hot water.  In recent weeks Instagram was caught in quite a mess when they announced (or rather misrepresented) their new Terms of Service, stating that user photos and data can be sold to third party marketers for commercial purposes.

AddThis is gathering some very interesting data itself, including activity around bookmarking services and feed readers where their users store information. AddThis also sees what stories people are bookmarking, granting them quite a picture of how content is shared, which browsers are used most often, where this content is going, and more.

The company recently introduced its Purchase Graph tool, which looks at audience segments through a combination of offline purchase activity and AddThis’ own online search, behavior and social data. The social tool is used on a reported 14,000,000 domains and gleans more than 1.3 billion unique data points, 8 billion search queries, and tens of billions of unique URL’s that are collected on a monthly basis. Add to this, the social platform also sees billions and billions of social connections and social factions, whether it’s a Tweet or a Pin or a Facebook post or the simple act of copying and pasting a URL.

In addition, their XGraph data technology processes 70 percent of the world’s web traffic to deliver real-time insight. The company also added a feature called AddThis Live View, which allows publishers to analyze content sharing in real-time through a dashboard. With the new feature, publishers can see the number of shares, clicks and viral lift (a measure of how many clicks content drove). AddThis also introduced a new, easier way to share Pinterest content via their toolbar plug-in for a more seamless provision of social referral traffic to Pinterest, as well as to publisher’s own sites.

Privacy Concerns vs. Social Metrics

The recent findings from a report titled “The Top Ten Reasons Why Your Business Is Not Ready for Social Media…” from the audience participation at the Minnesota Direct Marketing Association’s (MDMA) Annual Conference, found that in most cases, free sharing tools like AddThis widget will sell your sharing data to the highest bidder.

“To check out what I am saying, simply open up AddThis’s email-sharing tool and ask yourself what do you think they are doing with your consumer’s email addresses that they are capturing?,” said Jeffery, CEO and Founder, ShoppeSimpleNetwork.

The data collected from these sharing tools can be used by publishers for two primary purposes: to deliver more targeted advertisements or to provide more relevant content. AddThis, for one, is aggregating data about the sharing habits of Web users to sell to marketers in their efforts to create targeted online ads.

Risky business?

While it’s a lucrative business model and one that’s not foreign in this era of the Internet, AddThis received negative publicity several years ago for their use of a flash cookies. Clearspring Technologies, who owns AddThis, found itself in the spotlight thanks to a federal lawsuit claiming the company broke the law by using their widget to gather information on users, including children. The lawsuit claimed that major Web sites owned by the likes of Warner Bros. Records, Disney, and Demand Media, are using “Flash-based cookies” from AddThis to track personal information about users, including their movements across the Internet, amd not just on the web sites owned by the site operators. AddThis no longer engages in this practice now.

AddToAny also collects cookies that can be used to gather information about how visitors use a given website. This information then is used to compile reports including the number of visitors to the site, where readers have come to the site from and the pages they visited.  AddToAny also serves cookies for media6degrees, which is some sort of ad tracking network. There’s a potential privacy issue here, as without the knowledge of user, a targeted advertising tracking mechanism can be embedded within the plugin. So by using AddToAny, you’re providing media6degrees with data about your site’s visitors, which they can use to sell targeted communication to their customers.

The controversy is scaring off some publishers, despite the limited number of services that provide such useful metrics amongst a sea of user data.  Industry rival RadiumOne saw an opportunity to address some of the issues publishers face with AddThis and AddToAny, promising to provide metrics without data leakage while providing “actual ad revenue.”

“On the consumer/Big Brother side, we want users to feel safe and not exploited,” explains  Doug Chavez, VP of Marketing at RadiumOne.  “We’ve been approved by industry-neutral organizations to validate on the user side.  There’s nothing we’re collecting in terms of sharing data.  Nothing we share is personally identifiable information.”

Protecting Users & Advertisers

Some expert WordPress users and administrators discovered that through the use of a Firefox add-on called TACO: Targeting Advertising Cookie Opt-Out, users are automatically enrolled into a behavioral marketing system, which can be used by targeting platforms like media6degrees to sell information about the users to interested vendors.

AddToAny, however, posted on their privacy page that they don’t collect personally identifiable information, nor do they collect any email addresses that you may supply in the link emailing form, web requests, Internet Protocol address or browser and system information. They do, however, share software and system specifications, browsing habits and other non-personal data.

RadiumOne has rolled out an alternative with Po.st, an embeddable, click-to-share button that does not sell data to third parties.  It’s designed to be a trustworthy conduit between publishers and site visitors, giving both ends of the spectrum the results they want from a content-sharing tool.  RadiumOne boasts Billboard, Homeaway and Kiplinger as early supporters of Po.st, reaching a reported 10k sites and over 250 million monthly active users.

 

About Saroj Kar

Saroj is a Staff Writer at SiliconANGLE covering DevOps, social, mobile and gaming news. If you have a story idea or tip, send it to @SiliconAngle on Twitter.