Bye Bye Privacy: Personal Data are Being Extracted and Refined to Power Big Business/Big Government

You for Sale: Mapping, and Sharing, the Consumer Genome

By Natasha Singer | June 16, 2012 | New York Times

Justin Bolle for The New York Times
Acxiom’s headquarters in Little Rock, Ark. Analysts say the company has amassed the world’s largest commercial database on consumers.

IT knows who you are. It knows where you live. It knows what you do.

Steve Keesee/Arkansas Democrat-Gazette
Scott E. Howe, the chief executive of Acxiom since last summer, has said he sees the company as a new-millennium “data refinery,” rather than a data miner.

It peers deeper into American life than the F.B.I. or the I.R.S., or those prying digital eyes at Facebook and Google. If you are an American adult, the odds are that it knows things like your age, race, sex, weight, height, marital status, education level, politics, buying habits, household health worries, vacation dreams — and on and on.

Right now in Conway, Ark., north of Little Rock, more than 23,000 computer servers are collecting, collating and analyzing consumer data for a company that, unlike Silicon Valley’s marquee names, rarely makes headlines. It’s called the Acxiom Corporation, and it’s the quiet giant of a multibillion-dollar industry known as database marketing.

Few consumers have ever heard of Acxiom. But analysts say it has amassed the world’s largest commercial database on consumers — and that it wants to know much, much more. Its servers process more than 50 trillion data “transactions” a year. Company executives have said its database contains information about 500 million active consumers worldwide, with about 1,500 data points per person. That includes a majority of adults in the United States.

Ken Cedeno/Bloomberg News
Jennifer Barrett Glasgow is the company’s chief privacy officer.

Such large-scale data mining and analytics — based on information available in public records, consumer surveys and the like — are perfectly legal. Acxiom’s customers have included big banks like Wells Fargo and HSBC, investment services like E*Trade, automakers like Toyota and Ford, department stores like Macy’s — just about any major company looking for insight into its customers.

For Acxiom, based in Little Rock, the setup is lucrative. It posted profit of $77.26 million in its latest fiscal year, on sales of $1.13 billion.

But such profits carry a cost for consumers. Federal authorities say current laws may not be equipped to handle the rapid expansion of an industry whose players often collect and sell sensitive financial and health information yet are nearly invisible to the public. In essence, it’s as if the ore of our data-driven lives were being mined, refined and sold to the highest bidder, usually without our knowledge — by companies that most people rarely even know exist.

Julie Brill, a member of the Federal Trade Commission, says she would like data brokers in general to tell the public about the data they collect, how they collect it, whom they share it with and how it is used. “If someone is listed as diabetic or pregnant, what is happening with this information? Where is the information going?” she asks. “We need to figure out what the rules should be as a society.”

Although Acxiom employs a chief privacy officer, Jennifer Barrett Glasgow, she and other executives declined requests to be interviewed for this article, said Ines Rodriguez Gutzmer, director of corporate communications.

In March,  however, Ms. Barrett Glasgow  endorsed increased industry openness. “It’s not an unreasonable request to have more transparency among data brokers,” she said in an interview with The New York Times.  In marketing materials, Acxiom promotes itself as“a global thought leader in addressing consumer privacy issues and earning the public trust.”

But, in interviews, security experts and consumer advocates paint a portrait of a company with practices that privilege corporate clients’ interests over those of consumers and contradict the company’s stance on transparency. Acxiom’s marketing materials, for example, promote a special security system for clients and associates to encrypt the data they send. Yet cybersecurity experts who examined Acxiom’s Web site for The Times found basic security lapses on an online form for consumers seeking access to their own profiles. (Acxiom says it has fixed the broken link that caused the problem.)

In a fast-changing digital economy, Acxiom is developing even more advanced techniques to mine and refine data. It has recruited talent from Microsoft, Google, Amazon.com and Myspace and is using a powerful, multiplatform approach to predicting consumer behavior that could raise its standing among investors and clients.

Of course, digital marketers already customize pitches to users, based on their past activities. Just think of “cookies,” bits of computer code placed on browsers to keep track of online activity. But Acxiom, analysts say, is pursuing far more comprehensive techniques in an effort to influence consumer decisions. It is integrating what it knows about our offline, online and even mobile selves, creating in-depth behavior portraits in pixilated detail. Its executives have called this approach a “360-degree view” on consumers.

“There’s a lot of players in the digital space trying the same thing,” says Mark Zgutowicz, a Piper Jaffray analyst. “But Acxiom’s advantage is they have a database of offline information that they have been collecting for 40 years and can leverage that expertise in the digital world.”

Yet some prominent privacy advocates worry that such techniques could lead to a new era of consumer profiling.

Jeffrey Chester, executive director of the Center for Digital Democracy, a nonprofit group in Washington, says: “It is Big Brother in Arkansas.”

SCOTT HUGHES, an up-and-coming small-business owner and Facebook denizen, is Acxiom’s ideal consumer. Indeed, it created him.

Mr. Hughes is a fictional character who appeared in an Acxiom investor presentation in 2010. A frequent shopper, he was designed to show the power of Acxiom’s multichannel approach.

In the presentation, he logs on to Facebook and sees that his friend Ella has just become a fan of Bryce Computers, an imaginary electronics retailer and Acxiom client. Ella’s update prompts Mr. Hughes to check out Bryce’s fan page and do some digital window-shopping for a fast inkjet printer.

Such browsing seems innocuous — hardly data mining. But it cues an Acxiom system designed to recognize consumers, remember their actions, classify their behaviors and influence them with tailored marketing.

When Mr. Hughes follows a link to Bryce’s retail site, for example, the system recognizes him from his Facebook activity and shows him a printer to match his interest. He registers on the site, but doesn’t buy the printer right away, so the system tracks him online. Lo and behold, the next morning, while he scans baseball news on ESPN.com, an ad for the printer pops up again.

That evening, he returns to the Bryce site where, the presentation says, “he is instantly recognized” as having registered. It then offers a sweeter deal: a $10 rebate and free shipping.

It’s not a random offer. Acxiom has its own classification system, PersonicX, which assigns consumers to one of 70 detailed socioeconomic clusters and markets to them accordingly. In this situation, it pegs Mr. Hughes as a “savvy single” — meaning he’s in a cluster of mobile, upper-middle-class people who do their banking online, attend pro sports events, are sensitive to prices — and respond to free-shipping offers.

Correctly typecast, Mr. Hughes buys the printer.

But the multichannel system of Acxiom and its online partners is just revving up. Later, it sends him coupons for ink and paper, to be redeemed via his cellphone, and a personalized snail-mail postcard suggesting that he donate his old printer to a nearby school.

Analysts say companies design these sophisticated ecosystems to prompt consumers to volunteer enough personal data — like their names, e-mail addresses and mobile numbers — so that marketers can offer them customized appeals any time, anywhere.

Still, there is a fine line between customization and stalking. While many people welcome the convenience of personalized offers, others may see the surveillance engines behind them as intrusive or even manipulative.

Read the full article here.

Trackbacks

  1. […] Bye Bye Privacy: Personal Data are Being Extracted and Refined to Power Big Business/Big Government (johnmalcolm.me) […]

  2. […] following is from a recent New York Times article about Acxiom…. IT knows who you are. It knows where you live. It knows what you […]

  3. […] Bye Bye Privacy: Personal Data are Being Extracted and Refined to Power Big Business/Big Government (johnmalcolm.me) […]

  4. […] Bye Bye Privacy: Personal Data are Being Extracted and Refined to Power Big Business/Big Government (johnmalcolm.me) […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Of Dust & Kings

Empowering Faith. Transforming Culture.

Watts Up With That?

The world's most viewed site on global warming and climate change

Blasted Fools

During times of universal deceit, telling the truth becomes a revolutionary act - George Orwell

A TowDog

Conservative ramblings from a two-job workin' Navy Reservist Seabee (now Ret)

Oyia Brown

A WordPress site to share a smile; then an anthology showing how things really are.

Village of the Banned

A Voting American Site

The Grey Enigma

Help is not coming. Neither is permisson. - https://twitter.com/Grey_Enigma

The Daily Cheese.

news politics conspiracy world affairs

twitchy.com

Who Said What

A Design for Life

Scribblings of a twenty-something politically and socially-minded nomad

SOVEREIGN to SERF

Sovereign Serf Sayles

The Neosecularist

I Said That? Yeah, I Said That!

danmillerinpanama

Dan Miller's blog

TrueblueNZ

By Redbaiter- in the leftist's lexicon, the lowest of the low.

Secular Morality

Taking Pride in Humanity

WEB OF DEBT BLOG

ARTICLES IN THE NEWS . . . . . . . . . . . . . . . . COMMENTS, FEEDBACK, IDEAS

DumpDC

It's Secession Or Slavery. Choose One. There Is No Third Choice.

Video Rebel's Blog

Just another WordPress.com site

%d bloggers like this: