Ethical Marketing in Age of Horizontal Socialization

* Master’s Thesis: Rethink ethical marketing after the critiques of Bernard Stiegler. Maxime Lathuilière. ESC Toulouse / WF Ingolstadt master in management , 2012

permalink: http://maxlath.eu/paper-ethical-marketing

on blog.p2pfoundation.net: http://blog.p2pfoundation.net/ethical-marketing-in-age-of-horizontal-socialization/2012/10/29

Abstract

"Marketing, as the organization of attention capture and motivation canalization, that is to say the diverting of the social energy that is desire as analyzed by Bernard Stiegler, is at the heart of the social and economic system that is questioned by the post-2007 crises and the experience of system limits. Marketing’s shared history with the consumerist culture, the controversies on business responsibility and the downfall of counterforces that are national states and social institutions in the context of globalization, contributed to blur the limits of ethic in marketing practices. While limits thin down, marketing practices found new fields of technical improvement through the development of behavioral sciences, constitutive of a psychopower, immoderately use to tend toward ubiquity; not only aiming direct sells anymore but also working on the symbolic level for the sake of branding. Those immoderate practices lead to a form of exhaustion of marketing’s raw material: attention and desire. This systemic analysis of marketing’s impacts would lead to the sketching of an alternative system of information, valuating responsibility regarding the commons, including the psychic and collective well-being.

Plan

I. The notion of ethical marketing

II. Analyze of marketing’s impact on individual and collective psychology with Bernard Stiegler’s work

III. Difficulties and opportunities to implement a philia- and transindividuation-friendly marketing in the emerging technological and sociological context."

Excerpts

Critiques of the marketing leading to the ethical marketing approach

(section 1.2)

Maxime Lathuilière:

"The manual Principles of marketing in its chapter Marketing and society: social responsibility and marketing ethics try to raise an exhaustive list of critiques upon marketing. The manual identifies various possible concerns from the consumer’s point of view: the cost of advertising and promotion that will, at the end, be paid by the consumer; the question of the value added by marketing; the excessive mark-up allowed by marketing and brand strategies; the deceptive practices through pricing, promotion and packaging; the over-valuation of products; their possibly planned obsolescence. Possible concerns from society at large are also mentioned: the promotion of an exacerbate materialism; a low concern for common goods; a cultural pollution due to the growing ubiquity of advertising; lobbying efforts of brands eventually against the public interest. But the manual conclude that "some of this criticism [on marketing] is justified; much is not” (Kotler et al. 2005, pp.167–208). This optimist diagnostic is far from obtaining unanimity: the impact of marketing and the business it serves is a recurrent question in business sciences. Such a unidirectional optimist diagnostic for a pedagogic purpose seems counterproductive as the question is a key to understand how a smooth integration of marketing practices into society is a matter of balance between contradictory incentives:

- “the tension between the imperatives of economic survival in the competitive marketplace and ethics is a very real one for many individuals and corporations.” (Camenisch 1991, p.245)

Responsible marketing as a mirror of corporate responsibility

(section 1.3)

This question of ethics in marketing and in business at large is especially crucial since there are no obvious limits to marketing and business practices out of legal ones and that of religion, honor codes or forms of solidarity in former communal social organizations, which uses to be referential set of moral “guidelines”, are no longer dominant value systems in western societies, letting those societies potentially rely on solely law as border of what is or isn’t acceptable. But in the context of globalization and decreasing state sovereignty and regulation power regarding companies’ actions, the translation of population wishes of regulation into law is limited by the pressure of the international economic competition, which strengthens multinational explicit or implicit negotiation power pushing for deregulation, following Margaret Thatcher’s TINA paradigm – “There is no alternative” –, leading to growing accusations of irresponsible behavior from other society members:

- “Callous unconcern for the feelings of others”, “Incapacity to maintain enduring relationships”, “Reckless disregard for the safety of others”, “Deceitfulness: repeated lying and conning others for profit”; “Incapacity to experience guilt”; “Failure to conform to social norms with respect to lawful behaviors” – The Corporation (Bakan et al. 2003)

Among others, the documentary film The Corporation severely depicts corporations – and thus marketing as their relational organ – as entities gathering all psychopathic syndromes, due to their blind focus on profit. The summit of The Corporation demonstration regarding marketing practices is made through the example of Susan Linn works on children nagging their parents about purchase.

This study attempts to sketch best practices in order to reach a higher efficiency of marketing efforts, from a purely technical point of view:

- “In 1998, Western International Media, Century City and Lieberman Research Worldwide conducted a study on nagging. This study was not to help parents cope with nagging. It was to help corporations help children nag for their products more effectively.” (Holovat 2006, p.24)

If individuals are presumed to be moral and responsible for their acts, corporations suffer from a diluted responsibility: managers are responsible of the activity toward shareholders, shareholders are too numerous to respond for any responsibility and, through financial market, limit their implication in the corporation to one action: asking for bigger returns on investment and thus more profits. This social and legal design of limited responsibilities of intern stakeholders leads to the shunning of responsibility and is thus said to empower “monsters” (Bakan et al. 2003). In this irresponsible trend, marketing is hugely pointed; its rational approach of how to create buying motivations is depicted as deeply amoral.

While this movie demonstration is open to criticism in its form and its scientific rigor, what it highlights is in the end consensual: corporations built a power to manufacture lifestyles going beyond any control of public institutions:

- “Corporations shape lifestyles by producing and promoting healthy or unhealthy products, creating psychological desires and fears, providing health information, influencing social and physical environments, and advancing policies that favor their business goals.” (Freudenberg 2012)

Milton Friedman, the historical leader of the neoliberal revolution that occurred between 1970 and 1990, wouldn’t have denied this analyze of businesses limited responsibility, which – out of the term psychopath – is compatible with his famous intervention titled The Social Responsibility of Business is to Increase its Profits:

- “What does it mean to say that "business" has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but "business" as a whole cannot be said to have responsibilities, even in this vague sense. […] In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.” (Friedman 1970)

But those basic rules of the society tend to be weakened: on the one hand, deregulation decreased formerly existent legal limits on business practices; on the other hand, as we will see later, ethical customs are undermined in the current socio-technical organology.

- “Following Milton Friedman many business persons dismiss such social responsibility as an inappropriate add-on for business people and organizations operating in the competitive marketplace. They often maintain not that business does no social good, but that business that does its business well is already performing a number of positive services to society and its members through the creation of jobs, the paying of taxes, and the generating of beneficial and/or desired products and services. Additional social responsibility is simply seen as excessive and inappropriate” (Camenisch 1991, p.245).

Friedman’s intervention is especially interesting regarding marketing ethics, knowing that marketing’s history is closely linked with economic theory (Bartels 1976, chap.12): since the Classic, Economist wanted to make Economic a natural science, relying on mathematic models (Lordon 2009). Marketing found much inspiration in economics models (Bartels 1976) despite the theoretical difficulties it represent: the economics theoretical work based on a pure and perfect market suppose a perfect information and rational economics agent, marketing is thus irrelevant in the very model he took inspiration from (Anderson 1983).

What are the alternatives?

(section 3.2)

Describing marketing as a limitless, blind or monstrous discipline is of absolutely no use in our project of thinking an ethic of marketing: the development of marketing is sensible to its environment and is hence already self-limiting itself according to the previously mentioned legal and social framework. A current illustration of it is the shy development of neuromarketing for which “marketing researchers have long feared the public outcry against potential ethical and privacy issues” (Morin 2011, p.132): the problem is then that once one tried to put the finger on it and didn’t get burned, there was no contradictory incentive not to follow the movement. The political project regarding marketing would be to shape those cultural and social limits according to an ecology of the spirit; but for what concerns us here, the ethical business and entrepreneurial project would be to explore new inner dynamics of marketing, new directions in the field of possibilities offered by the current organology and its articulations between techniques and social organization in order to influence and shape marketing as an associative force – in opposition to its current dissociative force – in the larger psychic, social and technic organology. If the motivation of such a project could be to find new ways of efficiency in contrast with the old ways that are hold captive of a resource shortening trend, characterizing it of “ethical” underline the fact that there is more than a technicist approach of the discipline: aiming ethic is a way to care of the impact on the larger public matter, the res publica, which is equivalent to say that it is a political project in the noble understanding of the term. But the converse proposition is also true: not caring is a political project. The neoliberal revolution led by Thatcher and Reagan following the recommendation of Friedman produced a political project implemented through the modern management and the modern marketing as an arbitration between short-term efficiency and care, always giving right to the first. Thinking an ethical marketing would in that regard mean rebalance the arbitration between efficiency and care, while looking for ways to compose those ambitions in a new marketing paradigm tending toward being panacean, a global thinking of the problem. Such a utopic target is largely doomed to fail, but the process of exploring new ways could in itself open win-win or just better organization possibilities. It is a new attempt to underline that responsibility is the state of being conscious of its impact and acting accordingly: forming technicist practitioner, that is overfocused overspecialized practitioners missing the big picture as well as the long-circuit of thinking of their practice is constitutive of a proletarization trend, building a society of irresponsibility. This is the dead-end, the limit of our system we are experiencing at the moment under the names of democratic, societal, economic, ecologic crises.

Fighting the attention and desire resource shortage: stoping to use advertisement?

(section 3.2.1)

In the same way that a moderate pollution is hardly eligible to the qualification of “ethical”, it is hard to imagine a moderate use of psychopower that could be qualified of ethical. Nevertheless, the absence of psychological influence is the equivalent to an absence of human communication in a transductive understanding of individuation. The question is rather here to think the moderation of the psychopower through its fractioning and its articulation to the emergent set of value (cf infra). An ecology of the spirit would imply to empower transindividuation, i.e. to make sure that an economic activity creates more possibilities of individuation than it tend to destroy by attempting to capture attention and canalize motivation in a funnel. Empower transindividuation would imply to empowering actors of their own lifestyle, winning back the savoir-vivre prescribing production, role that marketing through the socialization of growingly efficient technologies used to play. In this view, marketing became too dominant in its role of social innovation development. Should marketing stop using psychopower? Or is it in the nature of the market aimed that marketing has to evolve? That is to say, would it be more ethical to push a change in consumerism using the same techniques that empowered consumerism at first? It might be here insightful to come back to Camenisch’s attempt to sketch marketing ethics guidelines:

- “[The] goal of informing the potential customer can be brought one step closer to specifically moral considerations by drawing on philosopher Richard DeGeorge and others who have suggested that transactions are more likely to be morally defensible if both parties enter it freely and fully informed. Assuming that marketing and marketers want to be part of morally defensible transactions, one might then say that viewed societally, the goal of marketing should be to increase the likelihood and frequency of free and informed transactions in the marketplace. Or, to put it negatively, marketing ought not to decrease the likelihood of such free and informed market transactions.” (Camenisch 1991, p.246)

The problem of putting freedom as a criteria of morality is that the very concept of freedom is a complex issue in a system of transductive relationships. Nevertheless, in the same way that the disciplinary biopower is a clear infringement on freedom, the industrial use of pycho- and neuropower tend to fall under the category of barriers to freedom too. The articulation of neurotechniques – to capture the attention – and psychotechniques – to attempt to create motivation – that is advertising has a large responsibility in this psycho-social drama that is the destruction of savoirs-vivre and desire. Does it mean that advertisement shouldn’t be used?

- “People who buy magazines slanted towards their interests – such as Vogue, Bliss, Loaded, Heat or Fortune – rarely complain about the ads because the magazines advertise products of interest. Second, ads make much of television and radio free, and keep down the costs of magazines and newspapers. Most people think commercials are a small price to pay for these benefits. Finally, consumers have alternatives: they can zip and zap TV commercials or avoid them altogether on many cable and satellite channels. Thus to hold consumer attention, advertisers are making their ads more entertaining and informative.” (Kotler et al. 2005, p.179)

This naive defense of advertising, denying the schemes of addiction and the fact that we are becoming through the objects of attentions that are put on our attentional path, progressively making the questioning of this system impossible as it becomes the norm of our milieu, ends by junk-food lobbyist declaring that

- “obesity is a problem of personal responsibility, the only tool to manage those overweight problems is a weighing scale, you just have to weight yourself” (Horel & Rossigneux 2012)

If the toxicity of overconsumption was just a question of willpower, either close to half of the US as no willpower or enjoy being overweighed (Gates 2012). This kind of declarations is unbearable for anti-advertisement activists – “Adbusters” in Canada, “les Déboulonneurs” in France (Dumas et al. 2012) – claiming that their right to avoid attention capture by advertising isn’t respected, especially in streets (Dumas et al. 2012).

Such an assertion is even more scandalous after the progress made in cognitive sciences proving that

- “The reward system is more vulnerable for some individuals. People suffering of obesity for instance see their reward system being abnormally stimulated by images of hypercaloric food. Advertisements exploit this vulnerability and reinforce their overconsumption behaviors.” (Dumas et al. 2012)

This health disaster that is obesity kicked in important researches observing the impact of a limitation or ban of TV food advertising on childhood obesity, the results are unequivocal: “if food advertising on TV were banned, significant reductions in the prevalence of childhood obesity are possible.” (Veerman et al. 2009)

The article written by a group of cognitive and social sciences La publicité peut avoir des effets nocifs sur la société [Advertisement can have harmful effect on society] in an opinion page of the newspaper Le Monde (26th June 2012) is very insightful in that matter:

- “What is at stake falls to be much more complex than the sole Freedom of Speech invoked for the advertiser. But this liberty doesn’t come without another liberty, complementary to the first: the liberty of non-reception. It would mean to guaranty every citizen the right to choose where and when he wants to access the advertising information. This would allow him to protect himself from its influence or simply to rest from the informational overload” (Dumas et al. 2012)

Such a restrictive approach of advertisement has already been implemented since 2006 in Sao Paulo under the name of “Clean City” law, with very satisfactory results as even the advertiser, after having fear a major crisis of their business, fall to find this ban of outdoor advertisement positive (Burgoyne 2007; Vincent Bevins 2010). It naturally went with ruses to meet the challenge of the transformation, but the more and more controverted billboards, cognitively polluting and inefficient did disappear.

Change in the industrial and commercial paradigm

(section 3.2.2)

3.2.2.1 Economy of contribution and peer production

Stiegler promote an economy of contribution as a remedy to this loss of savoirs. An economy of contribution means that users of a service are contributing to the production of these services. The classic example of such a contributive production is open-source software that are contributively build by potentially hundreds of developers organized in communities. Such a decentralize organization of production is growingly extended to new domains such as the industrial design of products through communities of peers (Bauwens et al. 2012). Such a collaborative activity tend to extend the trend inaugurated through the development of Internet networks that tend to minimize the gap between the producer and consumer – from the original way the Internet is though as a mesh of equal peers to the production of web contents by bloggers, both producer and consumer of the information – and, in the same movement, blur the frontier between professionals and amateurs (Stiegler 2010b).

3.2.2.2 The Copernican revolution of the Vendor Relationship Management paradigm

Coming from this culture in which emerged this production paradigm shift, Doc Searls push another shift that is the change in the commercial paradigm, described as an Intention Economy i.e. the opposite of the Attention Economy (Searls 2006; Searls 2012): in this Copernican revolution of the commercial paradigm, consumers are charged to express and discuss their intention (Bauwens et al. 2012) with businesses rather than the usual paradigm in which businesses where fighting for a piece of canalized motivation. Here the motivation comes to the business already constituted, producing tremendous savings in terms of advertisement and customer relationship management. Implementing such a system would nevertheless imply that marketing departments dispose of a system in which they could value their supplies and where they could be easily found by customers. Doc Searls promotes his answer to this issue: the Vendor Relationship Management system.

“VRM development work is based on the belief that free customers are more valuable than captive ones — to themselves, to vendors, and to the larger economy.

To be free —

1. Customers must enter relationships with vendors as independent actors.

2. Customers must be the points of integration for their own data.

3. Customers must have control of data they generate and gather. This means they must be able to share data selectively and voluntarily.

4. Customers must be able to assert their own terms of engagement.

5. Customers must be free to express their demands and intentions outside of any one company's control.” (Project VRM 2012)

This is a profoundly game-changing approach regarding the previous developments of commercial relationships and their last declination under the name of – commercially used – big data that is the rush for consumers’ information potentially leading to the same dead-end of attention destruction and affective saturation than the former offline paradigm. A VRM system working as a marketplace, ranking the different offers, would attempt to canalize marketing’s energy and ruses in a single place, in which the criteria of Camenisch formulating that “the goal of marketing should be to increase the likelihood and frequency of free and informed transactions in the marketplace” would be a central pillar that doesn’t come without remembering the ideal of a pure and perfect market pictured by Classical economists regarding the two points of a less imperfect and less biased information in a cultural context overvaluing transparency, and a bigger atomicity due to the hereafter introduced trend for re-localized peer production. This innovative paradigm attempting to reframe the practice of attention capture by marketing could elegantly by prolonged by two hypothetical add-ons.

3.2.2.3 VRM and externalization of the socialization process

Promoting the end of advertisement, defined as an unsolicited attempt to capture attention means to find a new way to make the information circulate, what was the primary goal of advertisement. Until there is no alternative to massive advertisement campaign for the information circulation, it is indeed hard to ask entrepreneurs and managers to get rid of those successors of propaganda: such a transition process necessarily imply adaptation costs from the producer and the consumer side, and possible competitive disadvantage against competitors still maximizing profit through advertisement means. But the internet transformation of the general organology offers new way to think information circuits and potentially constitute an opportunity to externalize the socialization process of products that is to empower citizen-consumers organized in communities of professional-amateur as practitioners and prescribers of lifestyles, playing the role of pioneers in their favorite(s) field(s) of expertise, their own field of savoir development, and thus, as amateurs, individuating themselves through the stabilization of new savoirs. Empowering groups of citizen doesn’t annihilate the risks of mis-use or counterproductive interest-taker behaviors but a well-designed system of trust between peers could minimize this risk by creating a dependency to what social capital other peers give you, as it is happening in the sharing economy: the credibility of a contributive peer would be guaranteed through what the P2P Foundation calls Feedback systems and peer-police (P2P Foundation 2012).

This production of recommendations toward a field of possibilities, regardless of the merchant or non-merchant aspect of those possibilities would find a powerful ally in a strong structuration of products characteristics, allowing customers to personalize their choices according to their desire and constraints: such a “VRM+” system would allow a customer allergic to gluten to block every product on the platform containing gluten or trace of gluten, or to weight the importance of environmental aspects in his choices – as it tend already to be developed in systems such as HopCube in France and other comparable initiatives around Europe and the US –, which might result in a ranking of the different relevant supplies. Marketing would then be the art of being as high as possible in this ranking, as it is happening in SEO for search engines, but in this context of criteria explosion, marketing would then be the disciple of listening to customers’ wishes and aspiration needing an attention, in order to kick in the production or to adapt the following series.

3.2.2.4 Toward a possible equi-power

Such a system would tremendously re-configure the balance of power and tend toward a form of equi-power i.e. a social organization in which abuses of a “big” would be the potential object of a ranking sanction by the peers. Indeed, as intuited in the first part with the movie The Corporations, the global village miss the sanction power against those who play against village inhabitants that was the banishment sanction: former communal societies maintain a form of care and attention system between inhabitants as it was too expensive, too risky for ones to play against the community one’s was directly dependent of, in a system of tight solidarity ties. The care and attention would comeback once this self-regulative function will be made easy and obvious, a form of artificial self-censuring Super-Ego that corporations, while pretending to be individual, are desperately missing. Thereafter, contrary to biological Darwinism, a form of economic Darwinism would let to conscious organization the right to curve their path toward a durable configuration in accordance with the social ecosystem. This could be understood as the lowering of fences in the metastable social milieu, in which corporation use to benefit of a great influence in the transformation of the milieu without letting the milieu, their interlocutors in the commercial communication i.e. their consumers, transform them in return: the idea of equi-power is a form of homogenization of the social matter, in which the distortions in the balance of power would be compensated by the gathering of small forces sharing a common interest. Such a sanction systems, if successfully implemented, would make value-destructing businesses progressively decline and hopefully bankrupt, by a mechanism analog to the social capital but extended to unrestricted fields of evaluation criteria, making the only long-term valuable strategic choice being attentive, caring of it interlocutors and other stakeholders, in order to maintain a long term satisfyingly high ranking. It would be utopic to think that the “being cool” marketing, that is a trend to conglomerate around objects of attention transmitting a particularly efficient signal in the symbolic milieu at a given time, would disappear, but marketers would have to make those two objectives compose together.

The efficiency of this artificial global Super-Ego – what the need of a shorter terminology and an undisguised taste for mythology might turn to make remember as a Noùs Kraken – would rely on the sophistication of the information structure: after a certain level of sophistication in the weighting of the ranking and its filters mechanisms, customers would be also able to make much more elaborate rules of behavior: it might be possible to register to an add-on set of parameters ruling the ranking, by could be declared a strong animosity for a given peer of the platform – let’s call him Monsanto or Goldman Sachs – and not only to block its integration to the ranking competition but also to inform its partners in business that due to the following accusations of non-attentiveness toward given subject of concern, they will also be penalized – if not also blocked – until their partner stops its harmful activities or until they stop to do business together. This social capital contagion is nevertheless a tool that would need to be controlled in its form of violence by extensive testings and iterations with forms of protections for the smallest peers, that is to say to keep this form of social violence to institutionalized, classic forms of businesses, clearly beyond the line of what should be acceptable in the global village. This intellectual pirouette of making marketing becomes the discipline aiming the careful integration of industrial production in the society worth a try regarding marketing’s current impact: the goal is here to create an artificial form of majority that is a self-censuring responsible behavior of corporations. (http://maxlath.eu/master-thesis)

More Information

Blog post presenting the paper: http://maxlath.eu/paper-ethical-marketing/

PDF (permalink): http://maxlath.eu/master-thesis/

[2013 update] Following works on P2P resources management systems: http://maxlath.eu/p2p-rm and http://maxlath.eu/wikidata-and-the-apt-get-of-things

[2015 update]

Prototyping in this direction with the project inventaire.io