Businesses buy these buckets of consumer demographic data to match up with their own customer records for direct marketing and upselling, and they can buy a prospect list of people assigned to an interest group that presumably will be more likely to buy a given product. The advertising message then gets disseminated either through direct mail, telemarketing, email or text messages.
In the mobile world there's a recognition that access to more sensitive data — such as apps that want to access the user's location, friends list or address book — requires a higher level of consumer consent, says Zaneis. The industry has attempted to address that by extending the Digital Advertising Alliance's privacy principles to mobile advertising. "I'm not sure that business practices are as advanced as we're led to believe in the mobile space," he says. "But because that data is available, whether it's really being utilized or not is not as important as the perception that it will be."
The offline and digital worlds have been converging for some time, says Leigh Feldman, chief privacy officer at American Express Co. "Over the next two to five years the distinction between offline and online will for all intents and purposes go away." And as those worlds converge, more information is becoming available for businesses to collect than they know what to do with. The analysis is more complicated, but the end game is the same: To get ads and offers in front of the people who are most likely to buy a given product or service. "The old-fashioned direct marketing ...has moved online, but it's the same activity," Barrett Glasgow says.
But those two worlds have very different rules as to how consumer data may be used. "The offline world is all personally identifiable data. The online world is either anonymous or identifiable [if the user has self-identified by creating an account]," says Barrett Glasgow. Advertising networks track online activity and build interest profiles that link to cookie IDs rather than PII - as required by the code of conduct put forth by the Network Advertising Initiative, an industry trade association.
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