How Much Do Online Marketers Know About You?

Takeaway: Marketers have always gathered data about potential customers, but what they know is getting increasingly specific - and personal.

There’s a huge sea change at work in today’s marketing world, and we’re witnessing it everywhere: Consumers are waking up and taking notice that the advertisers who bombard them with messages through every possible medium may know them a little more intimately than they’d like.

For a lot of us, it started with Facebook. At first, it was just a nice way to keep up with family and friends. Although we heard about career professionals getting burned through blending business and leisure on their profiles, we thought we were safe. That is, until reports started surfacing that all of that seemingly innocent banter - all of those "Likes" and selections of favorite books, movies, and songs - could all be used to create frighteningly detailed consumer profiles - and that there’s not much of a legal vehicle barring the sale of almost any information from social media.

Now, pundits are standing up and showing the public just how easy it is for online marketers to collect some very personal data. As a result, people are becoming increasingly aware of their vulnerability online. All of this analysis leads to one key question: What do marketers really want? (For background reading, see What You Should Know About Your Privacy Online.)

Demographic Information: The Ad Intelligence Of Yesterday

In the past, marketers collected very broad details about consumers - things we would consider to be anonymous in that they don’t paint a picture of an individual, such as age, gender, location by state or zip code and general income bracket. Sure, maybe we didn't want to give up that data even then, but it didn't exactly identify anyone in particular - or even try.

That's no longer the case. A 2011 op-ed from Mashable shows how marketers are fleeing the broad-spectrum demographic methods, and looking for more personal information, such as where you live, details about your family and what you buy. And we're not talking in broad terms here either - marketers are gathering this data right down to your address, the precise day your children were born and what you bought on your last shopping trip. And as data crunching becomes increasingly precise, marketers are more and more able to figure all of this out. (Don't believe us? Check out this story about how Target discovered a teen girl's pregnancy before her own father.)

These are some basic examples that provide a pretty clear picture. New ad strategies go way beyond just getting to know what kind of person you are. Nowadays, advertisers are looking for ways to target consumers more directly and, ultimately, figure out what you might need, perhaps before you even know it yourself.

The New Frontier: What Today’s Marketers Look For

With all of the information available to them, ad people and other corporate hunters are now also zeroing in on a lot more personal details about you, such as your political views, religious beliefs, sexual orientation and other markers that help determine what kinds of groups or companies you would support, and what you’re likely to buy. The Wall Street Journal released a whole treasure trove of information in April (be sure to check out "How Grabby Are Your Facebook Apps?) that clearly shows how much personal detail marketers can uncover through online apps, especially those related to Facebook, where most of us keep our most detailed personal profiles. (Concerned about security on Facebook? Read 7 Signs of a Facebook Scam.)

Through gathering this kind of very personal, and often sensitive, information about you and your friends, marketers can now pinpoint - not just where you are and what kind of situation you’re in - but how you think. And although this type of data mining is less than an exact science, it's getting better all the time. As for the law, The Wall Street Journal series illustrates how companies get around privacy standards, often through delayed implementation, vague promises of security and much more.

You And Your Family

Let's take Mother's Day as an example of a marketing event in which sales teams and marketing "engineers" might seek out specific kinds of information to more effectively target new and repeat customers. Flower companies, in particular, use the holiday, as well as their stores of database information, to blanket the right people with ads. But do these marketers, and others, look for relational data, that is, information on whose mom is whose, or other family tree clues that can help clarify a target audience?

When reached by telephone, the public relations department of a top floral vendor declined to reveal any details about its marketing strategy. However, from looking at the kinds of third-party services available on the Web, it’s clear that these days, maternal, paternal and familial data are commonly added wish list items for marketing teams.

That kind of information is becoming increasingly available. Take the Family Ties service available from AccuData, a firm that aims to help clients find "prospect relationships" based on, well, family ties.

"The influence that an extended family member can have on the purchasing decisions of your customers and prospects is often significant," reads the AccuData website. "Extended family members are an important target for marketers. However, until recently, these influencers have been virtually unreachable."

This service claims to be able to determine family ties between potential customers, despite moves or name changes, and piece together household data that goes beyond just a current snapshot. This service shows how important familial details can be in many customer facing industries, whether it’s flowers for mom, college for the kids or life insurance for expecting parents.

How Do Marketers Use Personal Data?

For many consumers, the big question is this: What do marketers DO with all of this stuff? Why do they want to mine through the details of a person’s life and what are they hoping to gain from it?

The Federal Trade Commission (FTC) provides a lot of resources on privacy for everyday consumers. It points out that marketers can really only do three things with your data.

1. They can build better ways to serve you in the future
2. They can use your data to try to sell you more things
3. They can resell your data to other businesses

It’s the third kind of data use that infuriates many of us the most: The idea of cash changing hands for pilfered Web info seems like the worst kind of back room deal.

But however they get the information, companies are getting to know you better. With new decision support software, business leaders really can succeed in developing the best targeted ads by knowing all about potential customers. That seems to be what’s really driving the data mining industry, rather than any actual face value for a certain key identifier or other piece of information.

Future Marketing Relationships

Short of keeping a low profile online, it seems there’s not a lot the average person can do to guard his or her personal information from marketers. Most of us will just end up facing precise and targeted ads - and more of them. What we can do is make sure that these super-ads don’t become the main factor in our buying decisions. So, next time you see an ad for something that looks or sounds perfect for you, think about the origin of that message. Advertisers can do whatever they want in an attempt to push your buttons, but no matter how much data they have on their side, that doesn't mean you have to be the sucker who falls for it.