In an ironic twist, what was once a stodgy traditional industry now holds the spotlight for shaping the future of digital advertising and consumer privacy. One of our “bed-in-a-box” peers, Casper, is being sued for “wiretapping” in a class action lawsuit for their use of NaviStone tracking software.
This lawsuit complains that Casper illegally derives the personal identities and mailing addresses of anonymous website visitors, who are not even making a purchase, and then uses this data for powering highly-targeted direct marketing campaigns.
Casper followed along a year-and-a-half after Tuft & Needle, and has since raised $240 million of venture capital. This alleged wiretapping adds to the recent controversy of Casper manipulating 3rd-party review blogs.
The behind-the-scenes technology driving NaviStone doesn’t seem totally crazy or unique. There’s an overabundance of these kinds of ad tech companies that blur the lines between marketing innovation and a blatant invasion of consumer privacy. And this isn’t the first time NaviStone has blown up in the public eye either.
What’s surprising is that Casper is in the crosshairs for this class action lawsuit when much larger brands are named, including Quicken Loans and Wayfair. NaviStone’s website says the technology is deployed across thousands of brands in nonprofit, retail, consumer goods, services, publishing and travel industries. A quick search on BuiltWith shows that even Sleep Number—obviously a much larger multi-billion dollar mattress brand—is using NaviStone as well.
Here’s a quick summary of how NaviStone works:
- When a visitor loads up Casper.com, the NaviStone software begins tracking the intimate details of her behavior on the site, which the court filing says includes keystrokes, mouse clicks and other browsing patterns.
- Once the visitor’s information is intercepted and captured on Casper.com, NaviStone stores the visitor’s profile in its own internal 3rd-party database, including her name and mailing address.
- As the visitor browses various other websites that have installed NaviStone code, the data broker matches elements of the intercepted data with mass-compiled records of personally identifiable consumers.
- Once a match is found, NaviStone de-anonymizes the visitor and updates its back-end database with the visitor’s current browsing activities and personal information.
- When the visitor leaves Casper.com without buying—similar to emails sent to customers abandoning their online shopping carts—NaviStone triggers a personalized direct mail piece, claiming a turnaround time as quick as 48 hours.
NaviStone’s own explanation on its website:
By matching your website visitors who have “raised their hands” or shown intent to buy to their postal addresses, NaviStone’s® proprietary technology will enhance your marketing efforts by expanding the reach of your direct marketing program and increasing the results. Our cost-effective solutions will help you identify first-party prospects and reactivation targets to include in direct mail programs.
NaviStone also explains its technology in this sales video, which probably hasn’t aged well:
With this negative publicity heating up, I’m sure many big name clients are immediately jumping ship to avoid associated backlash.
I’m very interested in how this will play out in the courts, and not just because it’s taking place in the mattress industry. Last year, I wrote about the prisoners' dilemma of brands when it comes to digital marketing. The tidal wave is swelling.
Key takeaway for consumers: Use an adblocker. I recommend uBlock.
Key takeaway for brands: Carefully vet ad tech software before deploying to your customers.