You finally dug out the snow pants and scarves, paired the stray gloves and mittens, and found your son’s snow boots that are at least two sizes too small. The next time you’re at your computer, you type “boys winter boots” into a search engine and scan through dozens of websites that probably sell exactly what you’re looking for.
But you may not realize that that click also sends slivers of data about you to countless data brokers who add it to the dossier of your digital self. Data brokers constantly expand and refine your data so advertisers can target you better, and it will probably pay off: The personal information market is booming.
Advertisers have always gathered consumers’ information in order to sell more products and services, but not in such exquisitely granular detail. Twenty years ago, a magazine ad was designed for its readers. Today, digital marketers design ads for just a slice of such an audience and can place them before an even more specialized segment: you.
Digital marketers don’t always know your name, but their tactics and tools generate numbers that identify your digital self. They know the person who uses your phone also uses your computer, used a reward card to get a great price on a gallon of milk, and stopped to buy gas on the way home. They often know the usual facts—your age and where you live. They also know your online friends, the route you walk to work, how much alcohol you drink, and that you worry you have bad breath.
Incidentally, they also know which boots you’re considering for your son, which is why those boots are following you around the Internet.
“Digital personalization is the result of audience segmentation—a practice as old as advertising itself,” says communication studies Ph.D. student Darren Stevenson. “But now machines can gather an enormous amount of data about you, and algorithms can process that data to find new ways to measure, analyze, and predict what you do—which makes digital personalization increasingly specific.” So specific, in fact, that two people visiting the same page at the same moment see different ads, product discounts, recommendations, and—sometimes—prices.
Now It’s Personal
The technology behind these machines and the databases that know so much about us also created an Internet so vast we can no longer effectively use it without technology’s help. “Digital personalization presorts data that would otherwise leave consumers with an impossible information overload,” says Stevenson.
Digital personalization selects your ads, and increasingly it also decides the order you see things like news stories and search engine results, all in efforts to increase relevancy.
“Businesses like personalization because it’s a more effective way to sell you things and make more money. They also think it creates a better user experience,” he continues. “You typically won’t see ads for stilettos if you’re not interested in high heels. When businesses know a lot about you, their algorithms can attempt to select ads for more useful products and services that feel more like interesting content than spam.”
Consumers, says Stevenson, have different opinions about personalization. Some are fatalistic: This is just the way things are now. Others are comfortable surrendering a certain amount of information if they get something—like a coupon—in return. And still others think the way they’re being monitored feels, well, creepy.
“Demonstrated harms are difficult to link to digital personalization,” he explains, “but there is a lot of concern about what ifs.” For example, if data brokers leap the wall separating certain parts of people’s offline identities from their digital selves, how might it affect getting a car loan, a job, or healthcare?
“It unsettles people when their virtual interactions hit close to home because of personal information they don’t recall providing.” But it turns out, in fact, that they probably, unknowingly, did.
On Good Terms?
We’ve all been interrupted by prompts to “accept the terms of service” and clicked “yes” to get rid of them. No one actually reads their impassable prose, right? (One study finds that if you did decide to read all of them, you’d need to set aside around 200 hours each year.) Terms of service often include clauses that give companies permission to use and share your data to make well-informed guesses about what you want to buy, when you want to buy it, and to set a price depending on what they think you’re willing to pay.
Your habits, your browser history, and your device’s operating system can all affect personalized pricing. So can your location. “We’ve seen cases of higher personalized pricing for e-commerce shoppers in rural areas,” says Stevenson, “where people tend to have lower incomes and where there are fewer local stores competing.”
It’s hard to avoid personalized pricing. “You could change your IP address, or buy multiple computers that run different operating systems and use them to do your own A-B testing,” says Stevenson. “But obviously that’s not practical.”
Regulating business isn’t a silver bullet either, especially when new types of personal data and new ways to use them keep coming to light. But if the unknowns around data collection trouble consumers, Stevenson reminds us that they’re dangerous for businesses too. “It doesn’t behoove business to alienate their customers. If you don’t trust a company, you’re much less likely to do business with them. Firms are aware of the delicate balance when it comes to consumer privacy and potential backlash.”
Stevenson also says that if privacy protections improve, consumers should take advantage of them, though he doesn’t really expect them to without incentives. “I recently presented several proposed, proactive consumer privacy options to one focus group and asked participants what they thought. ‘It sounds great,’ was the typical answer. ‘But honestly? I probably wouldn’t use it.’”
Some Cyber Advice
Stevenson encourages consumers concerned about privacy to heed the following advice:
- Shop around to compare prices.
- Buy only what you came for.
- Be wary of warranties and bundles.
- If you wish to limit personal data collection, check the “Do Not Track” option in your browser. It won’t always be honored, but many sites do comply.
- Don’t assume your phone’s digital identity is separate from the one on your tablet or laptop.
- Think ahead to potential consequences. Maybe a certain prescription drug is cheaper online, but will it be worth what leaving that digital trace might cost in the future?