data mining

[cellio]

How companies learn your secrets is a long but interesting article on commercial data-mining. The case studied here is Target, leading with a bit of a fumble where they showed they knew a high-school student was pregnant before her family did, but practically everybody analyzes their customers like this. This article explains some of what they're doing and why it works.

"We have the capacity to send every customer an ad booklet, specifically designed for them, that says, 'Here's everything you bought last week and a coupon for it,' " one Target executive told me. "We do that for grocery products all the time." But for pregnant women, Target's goal was selling them baby items they didn't even know they needed yet.

"With the pregnancy products, though, we learned that some women react badly," the executive said. "Then we started mixing in all these ads for things we knew pregnant women would never buy, so the baby ads looked random. We'd put an ad for a lawn mower next to diapers. We'd put a coupon for wineglasses next to infant clothes. That way, it looked like all the products were chosen by chance.

"And we found out that as long as a pregnant woman thinks she hasn't been spied on, she'll use the coupons. She just assumes that everyone else on her block got the same mailer for diapers and cribs. As long as we don't spook her, it works."

I know someone who used to get together with friends every now and then to randomly redistribute store affinity cards to mess up the data mining. I don't know how long hat will keep working (if indeed it still does) -- unless you also pay with cash. Personally, I just assume that any transaction I make that involves a credit card, affinity card, or disclosure of an address or phone number is not really private.

Comments

[loosecanon.livejournal.com]

Yes, we usually use cash, and shop with friends' store affinity cards. A group of us swap them around, as well as the resulting coupons.

[brokengoose.livejournal.com]

Remember, if you pay with cash, you're a terrorist (http://boingboing.net/2012/02/14/fbi-says-paying-cash-for-coffe.html).

[hildakrista.livejournal.com]

This may sound strange, but I'm actually totally cool with this type of data mining. I learn about things I may want to buy, and they make money off of me. Win-win in my case.

What I am not OK with is that the political machine also uses this type of thing to adjust their positions and ads based on the markets they think they'll need. It's slimy and dishonest at a basic level. Target is providing a service while making money. Politicians are compromising their integrity to get re-elected, and many of them use fear-based marketing. Yuck. I don't expect forthrightness from companies trying to sell me stuff; I want lawmakers to stop selling and act forthrightly.

Sorry... feeling a bit politically angry today.

[http://users.livejournal.com/merle_/]

I use cash for just about everything I possibly can. People at (now ex)work were amazed that I could usually make change for a $20, and if allowed to use larger bills for $100, while still having money left for lunch. For grocery store discount cards I just sign up for a new one every year and give them a new completely fake address (and name, etc).

I can still be tracked, of course. It's just a slightly smaller footprint.

[hudebnik.livejournal.com]

Thanks! I gave my students a link to that article, in connection with our ongoing discussions of online privacy, what companies know about you, and so on.

[dragonazure.livejournal.com]

Around here, if you don't have an affinity card, the cashier will ask for your phone number. I always refuse to provide it. Having worked for a couple of manufacturing corporations, I am well aware of why stores like affiinity cards. From the marketing point of view, it is in a merchandizer's interest to build a profile of their individual customers. That way, they can effectively spent their advertising budget where it is most likely to generate revenue--versus generic ads, which have a lower rate of return. However, from the individual privacy standpoint, the consequences can range from mildly annoying (such as your age demographic suddenly triggering a swarm of little blue pill ads) to catastrophic (your demographic being targeted for more nefarious purposes).

European privacy laws are supposed to restrict the ability of both the government and businesses from aggregating and sharing individually identifiable information--such as the sales demographics. If we could adopt those laws and policies in the U.S., I think a large portion of us would be happier.... I don't think I would mind if an individual store were to use that data in-house, but sharing it with any third party is where life would become more interesting than I would prefer.