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Where your personal data goes when you're not looking

Robert L. Mitchell | Aug. 6, 2014
There's a lot of consumer data floating around, but in many businesses it's still fairly disorganised.

Businesses buy these buckets of consumer demographic data to match up with their own customer records for direct marketing and upselling, and they can buy a prospect list of people assigned to an interest group that presumably will be more likely to buy a given product. The advertising message then gets disseminated either through direct mail, telemarketing, email or text messages.

The evolution of online data has led to different practices for gathering data, but with the same objective, says Mike Zaneis, executive vice president and general counsel for the Interactive Advertising Bureau (IAB), an industry trade association. "Consumers don't care if you send them relevant ads, but they don't want you to know their browsing history," he says. So advertisers use cookies to track online activity of website visitors, and that activity is linked to a cookie ID tied to a specific browser on a specific device. The activity is not tied to the individual — unless the individual has self-identified by registering with a given website.

In the mobile world there's a recognition that access to more sensitive data — such as apps that want to access the user's location, friends list or address book — requires a higher level of consumer consent, says Zaneis. The industry has attempted to address that by extending the Digital Advertising Alliance's privacy principles to mobile advertising. "I'm not sure that business practices are as advanced as we're led to believe in the mobile space," he says. "But because that data is available, whether it's really being utilized or not is not as important as the perception that it will be."

The offline and digital worlds have been converging for some time, says Leigh Feldman, chief privacy officer at American Express Co. "Over the next two to five years the distinction between offline and online will for all intents and purposes go away." And as those worlds converge, more information is becoming available for businesses to collect than they know what to do with. The analysis is more complicated, but the end game is the same: To get ads and offers in front of the people who are most likely to buy a given product or service. "The old-fashioned direct marketing ...has moved online, but it's the same activity," Barrett Glasgow says.

But those two worlds have very different rules as to how consumer data may be used. "The offline world is all personally identifiable data. The online world is either anonymous or identifiable [if the user has self-identified by creating an account]," says Barrett Glasgow. Advertising networks track online activity and build interest profiles that link to cookie IDs rather than PII - as required by the code of conduct put forth by the Network Advertising Initiative, an industry trade association.


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