Facebook Data Linked to Loyalty Cards?

Facebook is working with a controversial data company called Datalogix that can track whether people who see ads on the social networking site end up buying those products in stores, reports CNN.

Amid growing pressure for the social networking site to prove the value of its advertising, Facebook is experimenting with new techniques for tracking that raise concerns among privacy advocates.

“We kept hearing back [from marketers] that we needed to push further and help them do a better job,” said Brad Smallwood, Facebook’s head of measurement and insights.

Datalogix has data from about 70m American households largely drawn from loyalty cards at more than 1,000 retailers, including grocers and drug stores.

By matching email addresses or other identifying information associated with those cards against emails or information used to establish Facebook accounts, Datalogix can track whether people bought a product in a store after seeing an ad on Facebook.

Datalogix says their data includes almost every U.S. household and more than $1 trillion in consumer transactions.

Facebook said it is paying Datalogix for the data-matching. So far, the two companies have measured 45 campaigns and in 70 per cent of cases, for every dollar a marketer spent on Facebook it earned an additional $3 in incremental sales.

Facebook and Datalogix said individual-level purchasing data were not shared with Facebook or its advertisers. Individual Facebook user data are not shared with advertisers. Facebook said it was working with an outside auditor to monitor its practices.

Datalogix also bought PSC Inc., a major manufacturer of portable data terminals, mobile data terminals, wireless terminals, bar code scanners, and RFID readers used in the retail market.

The multi-billion dollar data mining industry is taking target marketing into a New Frontier. Every time you swipe a rewards card at a store, that data goes somewhere to get analyzed. Marketplace’s Stacey Vanek Smith explains how marketers are using our data to get better at selling things to us.

Data mining is a $100 billion a year business in this country.

The address book in smartphones is free for app developers to take at will, often without the phone owner’s knowledge. Twitter, Foursquare and Instagram routinely gather the information in personal address books on the phone and in some cases store it on their own computers. The practice came under scrutiny by members of Congress.

A do-not-track button, such as the free one offered by Abine, isn’t going to stop all Web tracking. Companies have agreed to stop using the data about people’s Web browsing habits to customize ads, and have agreed not to use the data for employment, credit, health-care or insurance purposes. But the data can still be used for some purposes such as “market research” and “product development” and can still be obtained by law enforcement officers.

Ghostery (0 trackers), sees the invisible web – web bugs, tags, pixels and beacons. Ghostery tracks the trackers and gives you a roll-call of the ad networks, behavioral data providers, web publishers, and other companies interested in your activity.

Julia Angwin (twitter) recently led a team of reporters from The Wall Street Journal in analyzing the tracking software and discovered that nearly all of the most commonly visited websites gather information in real time about the behavior of online users.

Visiting the top 50 internet websites resulted in more than 3,000 cookies embedded into a “clean” computer. Wikipedia had no cookies. Dictionary.com had the most, with over 250 attached to their computer on a single visit.

The business of spying on Internet users so that the information can be sold to advertisers is one of the fastest-growing businesses today, explains Fresh Air.

Cluster analysis takes a statistical approach. Words are tracked in relation to other words. Your consumer habits define your marketing cluster.

You can find your cluster here, at the Acxiom website, which offers data mining services to advertisers. My online tracker blocker from Abine says Acxiom has “0” trackers on this particular page. Here’s the Acxiom catalog of data-mined products that advertisers can buy to better target potential consumers.

My own Dailywireless site (the one you are currently reading) has multiple trackers, reports Abine. Those are from the AdSense, Amazon, and ad networks.

Advertisers are collecting personal information about you, says Joseph Turow, a professor at the Annenberg School for Communication at the University of Pennsylvania, and author of the new book, The Daily You: How the New Advertising Industry is Defining Your Identity and Your Worth — which details how companies are tracking people through their computers and cellphones in order to personalize the ads they see.

Turow tells Fresh Air’s Terry Gross that tracking is ubiquitous across the Internet, from search engines to online retailers and even greeting card companies. A recent Valentine’s Day card sent to his wife, for instance, contained trackers from 15 separate companies.

Congress will probably have to write legislation governing the collection and use of personal data, something that is unlikely to occur this year, says the NY Times. And the companies that make browsers — Google, Microsoft, Apple and others — will have to agree to the new standards.

In other news, the FBI is renewing its request for new Internet surveillance laws, saying technological advances hinder surveillance and warning that companies should be required to build in back doors for police.

“We must ensure that our ability to obtain communications pursuant to court order is not eroded,” FBI director Robert Mueller told a U.S. Senate committee this week. Currently, he said, many communications providers “are not required to build or maintain intercept capabilities.”

The Federal Trade Commission, which has already begun monitoring privacy violations, will have the ability to enforce compliance with a code of conduct to be developed by the Commerce Department or with advertising industry guidelines that companies would adopt voluntarily.

Related Dailywireless articles include; White House Offers Consumer Privacy Bill of Rights, Behavioral Targeting: Kill/Capture and How Your Location & Preferences are Recorded.

Posted by Sam Churchill on .

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