The Stink On Data: Will it Ever Go Away?

Facebook has put a stink on user data that may not be alleviated before Washington steps in with new privacy regulations to make the use of data -- at least by digital advertisers -- a little harder and perhaps a lot less accurate. I would not be surprised to see a severe limitation on the passive collection of data in favor of a more EU-style explicit asked-and-answered opt-in.

Consumers tend to not really care much about the Internet needing advertising to keep delivering free content. Nor are they aware that news organizations --like, for example, The New York Times (which you have to pay to access online) -- have the most third-party trackers out of all of the categories of sites tracked in a Princeton University study. It might finally be dawning on users that the problem is much larger than Facebook.

But consumers are also pretty oblivious to the fact that companies have been collecting data about them for about 100 years. The concept of psychographics, for example, is said to date back about a century. Long before the Internet, marketers and publishers collected all sorts of data on their customers, using everything from subscriber addresses to questionnaires to mall intercepts, cross-referencing public data (like the census) to the purchase of mailing lists from brokers -- or each other -- to try and gain as much insight into who you were and what you'd buy. Pretty much everyone who had user data -- including credit card companies, retailers and cataloguers -- was happy to sell it to the next guy.

Twenty-five years before the Internet, if you had seen the information about you carried by list brokers, you would have been shocked.

The theory of marketers' application of user data (and increasingly machine learning and AI) is that the more they know about you, the more relevant ad they can send your way. This will make you respond more than to a random ad aimed at the entire population (think diet and easy loan offers).  I call this a theory because it has yet to be proven entirely true, although there is lots of evidence that more appropriate ads, served in a consumer-friendly way, get better results.

Now that we are starting The Internet of Things, more and more data -- much of it more revealing than yesteryears' mailing lists -- will be collected about users. What appear to be helpful apps and appliances are already recording tons of intimate details about you that, in one way or another, will be deployed in someone's marketing efforts. So in many respects we are just at the dawn of the age of digital data-based marketing.  Even the television delivered through your cable box is moving very fast toward audience-data targeting, promising greater efficiency than ads targeted by indexes.

The open question is, will the media, ad-tech and marketing industries close ranks fast enough to start communicating to consumers about privacy and how their data is being used, before the body blows start from Capitol Hill? 

Thanks to Facebook, that day is edging ever closer.

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