By monitoring the websites people visit, these companies can infer their location, income, family size, education, age, employment and much more. One data firm has compiled a billion profiles of potential customers, each with an average of 50 attributes. Consumers are lumped into “segments” such as “men in trouble”—presumed to have relationship problems because they are shopping for chocolates and flowers—or “burdened by debt: small-town singles”. When people visit websites, advertisers bid to show them precisely targeted ads. The auctions take milliseconds and the ad is displayed when the website loads.
Targeted advertising has advantages for consumers. It pays for many popular websites which people can enjoy free of charge. Relevant ads are probably more useful to consumers than irrelevant ones. But any business based on covert surveillance is vulnerable to a backlash.
Someone who is categorised by a data broker as a “motorcycle enthusiast” might find his rates for medical or accident insurance rise. “Men in trouble” might find it harder to get a job. Until objections were raised, OkCupid, a dating website, used to sell data about people’s drug and alcohol consumption. It is not going to be to anybody’s advantage to have such information about them widely available.
Read more at The Economist
