Visualizing The Multi-Billion Dollar Industry That Makes Its Living From Your Data

In the ocean ecosystem, plankton is the raw material that fuels an entire food chain. These tiny organisms on their own aren’t that remarkable, but en masse, they have a huge impact on the world.

Here on dry land, Visual Capitalist's Nick Routley notes that the massive volume of content and meta data we produce fuels a marketing research industry that is worth nearly $50 billion.

Every instant message, page click, and step you take now produces a data point that can be used to build a detailed profile of who you are.

Courtesy of: Visual Capitalist

EVERY BREATH YOU TAKE, EVERY MOVE YOU MAKE

The coarse-grained demographics and contact information of yesteryear seems quaint compared to today’s sophisticated data collection battleground. In the past, marketers would make judgement calls on your likely income and family structure based on where you lived, and you’d receive “targeted” mail and calls from telemarketers. Loyalty programs and the emergence of web analytics pushed things a little further.

Today, the steady march of technological advancement has created a vast data collection empire that measures every aspect of your digital life and, increasingly, your offline life as well. Facebook alone uses nearly one hundred data points to target ads to you – everything from your marital status to whether you’ve been on vacation lately or not. Telecoms have access to extremely detailed information on your location. Apple has biometric data.

Also watching your every move are web trackers. “Cookie-syncing” is one of the sneaky ways advertisers can follow you around the internet. Basically, cookie-syncing allows third parties to share browsing information at such a large scale that even the NSA “piggybacks” off them for surveillance purposes.

The recent sales growth of smart speakers will only increase the breadth of data companies collect and analyze. Amazon and Google have both filed patents for technology that would essentially allow them to mine audio recordings for keywords. Advertisers could potentially target you with diapers before your family and friends even know you’re expecting a baby.

FOLLOWING THE ONES AND ZEROS

While web trackers and companies like Apple and Google are collecting a lot of personal and behavioral data, it’s the whales of the data ecosystem – data brokers – who are creating increasingly detailed profiles on almost everyone.

Data brokers trade on the privacy of consumers and operate in the shadows.

– Senator Al Franken (D-Minn)

The goal of data brokers, such as Experian or Acxiom, is to siphon up as much personal data as possible and apply it to profiles. This data comes from a wide variety of sources. Your purchases, financial history, internet activity, and even psychographic attributes are mixed with information from public records to create a robust dossier. Digital profiles are then sorted into one of thousands of categories to help optimize advertising efforts.

FEAR THE SHADOW PROFILE?

According to Pew Research, 91% of Americans “agree” or “strongly agree” that people have lost control over how personal information is collected and used.

Though optimizing clickthroughs is a big business, companies are increasingly moving beyond advertising to extract value from their growing data pipeline. Amalgamated data is increasingly being viewed as a clever way to assess risk in the decision-making process (e.g. hiring, insurance, loan or housing applications), and the stakes for consumers are going up in the process.

For example, a man may feel comfortable sharing their HIV status on Grindr (for practical reasons), but may not want that information going to a third party. (Unfortunately, that really happened.)

In 2015, Facebook filed a patent for a service that would help insurance companies vet people based on the credit ratings of their social network.

THE MORE YOU KNOW

Below the surface of our screens, our digital profiles continue to take shape.

Measures like adjusting website privacy controls and clearing cookies are a good start, but that’s only a fraction of the data companies are collecting. Not only do data brokers make it hard to officially opt out, their partnerships with corporations and advanced data collection methods cast such a wide net, that it’s almost impossible to exclude individual people.

Data brokers have operated with very little scrutiny or oversight, but that may be changing. Under intense public and governmental pressure, Facebook recently cut ties with data brokers. For a company that has bullishly pursued monetization of user data at every turn, the move is a sign that the public sentiment is changing.

Comments

techpriest 38BWD22 Sat, 04/21/2018 - 04:01 Permalink

I'm going to wager that all of this press will be followed up by a regulation that makes it virtually impossible to run a website, unless you are a large enough company to comply with all of the rules. I'm doing GDPR research at the moment, and its pretty clear to me that little actual privacy is added, but a very large amount of paperwork and new offices are added, and if you are a 1-man startup you just threw away 6 months that could ave been used building new product.

In reply to by 38BWD22

Troy Ounce ldd Sat, 04/21/2018 - 08:37 Permalink

 

And why is there no software which only has one aim: spoof the fuckers.

1. Deliberate 1000's of additional nonsense searches

2. Give info about additional nonsense sites like flowers from the Andes, South Korean stone masons or cute kittins you are presumably visiting for hours at 4.30 am

3. Keeps your GPS up to 1.6 miles (1 km) of your true bearings

4. etc.

Please help me out here.

In reply to by ldd

Alananda Skateboarder Fri, 04/20/2018 - 23:12 Permalink

@ Skateboarder

Good (for me) to read an astute, always pithy comment or two from you!  Thanks.  I have little to say on the subject -- seemed so obvious for so long, what can I say?!  Cash -- the next "dinosaur" slated for extinction, should (((PTB))) have their "way".

I hope that many folks find motivation to learn about "real money", aspire to barter, and get to know their neighbors.  Only way through, possibly out, of our currently oppressive conditions and circumstances!

I say no more for now!  Anything more tends to cause troubles....

In reply to by Skateboarder

HRClinton Skateboarder Sat, 04/21/2018 - 10:11 Permalink

Don't give a shite, as long as I benefit. E.g....

I use my 1 well-chosen plastic and treat it like cash, to pay everything with it. At the end of the month pay it all off. But in the meantime, I get "money back", i.e. additional discounts.

Before I left the US, I'd buy gas at Cosco (cheapest within 10 miles), pay it with plastic, and get additional discounts in the store from the gas coupons. And Cosco gives me 2% off at the end of the year.

Point is, if you know how to play the Credit Game correctly, you can keep serious money in your own pocket. The trouble is, most people are too dumb, lazy, uninformed and undisciplined to do so. They're sheep anyway, so fvck 'em!

In reply to by Skateboarder

pigpen CrabbyR Fri, 04/20/2018 - 22:37 Permalink

Crabby, do you use a mobile adblocker? I follow 15 CPG names and all are at 2-4 year lows and some of the largest advertisers in the world yet none can grow their top line.

How much longer will boards tolerate blowing billions in advertising when they realize it is ineffective and their business are in run off.

Time for the world to take install mobile adblocker on every phone to destroy the surveillance, tracking and censoring digtal advertising business.

I prefer brave browser as brave blocks advertising malware and tracking by DEFAULT on any device and operating system rendering digital advertising model useless.

The world is 3 clicks away from destroying the goobook. Citizens of the world unite.

What is digtal advertising worth if an ad can't be served, viewed and tracked.

Install brave browser or equivalent mobile adblocker immediately.

Cheers,

Pigpen

In reply to by CrabbyR

pigpen Endgame Napoleon Sat, 04/21/2018 - 00:07 Permalink

Endgame, you are correct. There is no solution for protection of your financial data other than applying draconian penalties for firms that violate your privacy. Our data needs to be protected to the point that firms wear massive liability and consequence with failing to protect data.

From digtal advertising monetization brave is simple enough for Grandma to get fantastic adblocking and anti tracking.

3 clicks away from installation. Once the world realizes how close they are to rendering digital advertising useless, watch out goobook.

Mouth breathers awaken.

Cheers,

Pigpen

In reply to by Endgame Napoleon

GeoffreyT Endgame Napoleon Sat, 04/21/2018 - 23:50 Permalink

Hacking them - again and again and again and again and again, until their reputations are so broken that their clients abandon them.

For a few individuals, the 'light bulb' moment was the Experian and Alteryx hacks; for a few more, it was the Cambridge Analytica leak.

For a few Australians, it was an unsecured, web-facing repository that contains patient data that it was trivial to de-anonymise. For a few more, it was an ABS respository of the same type.

Think of this as the first few sorties in a well-organised plan to destroy public trust in anyone who wants to make a living off other people's data.

In time, businesses who rely on this as a primary revenue driver will have the same public perception as tobacco companies, or companies that harvest tissue from aborted fetuses[1]. There will be no valuation premium associated with it; there will be a discount. And if your firm is seen to be 'in league with' such firms, the valuation discount will pass through.

In the early going, the source of the valuation discount will be a spike in litigation risk - another half dozen big leaks, and class-action lawsuits will start to really get traction.

Philip Morris' brand was so damaged by tobacco litigation risk that it changed the name of its parent company so that it's non-tobacco segments did not have to carry the reputational burden associated with the tobacco segment; however Altria trades at a PE multiple of 10 because as the overall owner it carries the litigation risk.

This sort of thing will, in time, apply to data-harvesters and data-exploiters. It will become part of the 'ethical investor' framework, too.

.

And so it will continue until the top 10-15% of the IQ distribution finally wakes up as a mass, and starts to agitate for much stronger constraints on the collection and use of data.

They will start refusing to agree to terms that permit their data to be sold; then they will start taking notice of the contracts that they already have, and their unconscionability (and unenforceability). More litigation risk.

 

[1] I don't want to be seen as implying that fetal-tissue harvesting serves no genuine economic purpose: it can and does. The point is that it's an activity towards which some people have a visceral revulsion - so firms that do it are subject to a valuation discount.

In reply to by Endgame Napoleon

Endgame Napoleon Juggernaut x2 Fri, 04/20/2018 - 22:38 Permalink

To really get a scare, people need to apply for some of the $10-per-hour mom-gang jobs, where they handle a lot of this data. This includes credit processing, where some very yahoo mommas have access to every last financial transaction of people doing home refinancing, etc. They handle your data, not too carefully in many cases, between their all-important Halloween dress-up days and their copious absenteeism. They are also allowed to work at home (for kids, supposedly). While all of the mom-gang workers have to go through background checks, some of them describe situations outside of the office where you might not want your data. But hey, mommas must have all of the jobs due to reproduction, and their home lives must be accommodated to the endth degree. They have other sources of income from spouses. ex spouses or welfare and refundable EITC child tax credits up to $6,431 that make the low wages acceptable, and that is the important thing in most financial services jobs. It is certainly not protecting your data. 

In reply to by Juggernaut x2

rejected Fri, 04/20/2018 - 22:28 Permalink

They're wasting their time with me.... lol. 

They're advertising advertising to create their own market.

In my case, not one time has an ad of any sort prompted me to waste my earnings on crap I don't need. I imagine that applies to a lot of people.

techpriest rejected Sat, 04/21/2018 - 18:24 Permalink

I've been on the other side of it. Depending on the product, you only need a 0.05-0.1% success rate for ads to work, and you can target ads to more-or-less guarantee such a rate.

The thing about advertising is, it works in the sense that you are looking for someone who wants what you have, right now, and you repeatedly tell them "when you are ready, I have this." Alternatively, I have bought a few products because a podcast host I like was advertising it, and I was buying it as a way to give him money. I still do not buy 95% of such products, but the podcaster only needs me to buy 1-2 things to keep his lights on anyway, so it works.

In reply to by rejected

MedicalQuack Fri, 04/20/2018 - 22:43 Permalink

I've been saying this for years, in order to regulate the data sellers, you first need to know who they all are, there's thousands out there besides the big guys making a mint selling your data...

http://ducknetweb.blogspot.com/2017/04/one-trick-algo-world-needs-to-be…

United Healthcare has a patent on mining and saving your social data and using it to score you and sell those scores..the healthcare algo cartel...talked about that in October to my presentation to a big medical group at their 74th annual meeting.  

http://ducknetweb.blogspot.com/2017/11/algorithms-scoring-metrics-priva…

Who are all these data sellers?  If you don't know who they are and identify the group, you'll never get anywhere.  

Kelley Fri, 04/20/2018 - 22:45 Permalink

Do you understand why the private sector is being turned into the boogie man regarding aggregate data? Seriously do you think companies give a hoot that you, John Q. Smith, bought plaid overalls and they're keeping a big list with your name on it so they can look at it and laugh.

The focus on the private sector is a false flag so you won't focus too much attention on the gubbermint like NSA, the IRS, or the FBI who really will pull up your data and eff with you if you step out of line too far. They can jail you.

They've got quite the system these days. The gov't doesn't need to oppress everyone with a heavy hand. They just need to control the folks who are too honest. The other 99% go on their merry way not realizing how the game is played. 

 

GeoffreyT HRH of Aquitaine 2.0 Sun, 04/22/2018 - 00:07 Permalink

Du hast mich gefragt und ich hab nichts gesagt

- seldom applies to me.

Oddly, when I first heard that song, I thought it was "Du Hasst"; the lyrics still make sense.

Also: for me, it's Ænema, by Tool.

Some say a comet will fall from the sky.
Followed by meteor showers and tidal waves.
Followed by fault lines that cannot sit still.
Followed by millions of dumbfounded dipshits.

Some say the end is near.
Some say we'll see Armageddon soon.
I certainly hope we will cause
I sure could use a vacation from this

Stupid shit

Better still for those who like their anarchy more flagrant (and 80s-style electronic): Muse.

Interchanging mind control,
Come let the revolution take it's toll,
If you could flick a switch and open your third eye,
You'd see that
We should never be afraid to die
(So come on)

Rise up and take the power back,
It's time the fat cats had a heart attack,
You know that their time's coming to an end,
We have to unify and watch our flag ascend

They will not force us,
They will stop degrading us,
They will not control us,
We will be victorious

Fingers crossed...

In reply to by HRH of Aquitaine 2.0

zpinch Sat, 04/21/2018 - 01:48 Permalink

if anyone here is in advertising or marketing... kill yourself.. You are Satan's spawn filling the world with bile and garbage. You are fucked and you are fucking us. Kill yourself. It's the only way to save your fucking soul..

radbug Sat, 04/21/2018 - 02:41 Permalink

What do South Australian Premier, Steven Marshal & Donald Trump have in common? Answer: they were never experienced before. The Labor Party was in power for 16 years prior, while Donald Trump never held elected office. You know what they say, that all that the market research can do is to persuade you to try the product once. If it then poisons you, all this fancy i360 political market research becomes next to useless.

TeraByte Sat, 04/21/2018 - 05:45 Permalink

My simple question is, who the hell believes in this marketing racket. For business to survive increased sales ought to support this 50 B marketing drive. Own experience from small Bizz is, such a data is total crap and instead you will be turned into a catch by these besser wisser scavengers, who “would like to help you in marketing”, but reveal their own hollowness already by sending totally arbitrary emails from bought online directories.. Or so and so more clicks on your site by using misleading keywords, but no increased sales, because people are not that stupid after all.

techpriest TeraByte Sat, 04/21/2018 - 18:29 Permalink

It sounds like you got scammed by bad marketers. But, you also showed why the market exists - some people are able to get you new customers at an acceptable spend level, i.e. spend $1,000 to get $10,000 in new business.

Also, the industry is evolving, and what is considered "good enough" has changed. Throwing up Google ads doesn't cut it anymore - marketing is now funnel-based and you have to give some value to your customer to get them to even want to hang around long enough for a pitch.

In reply to by TeraByte

MusicIsYou Sat, 04/21/2018 - 06:19 Permalink

I was going to say something, but I figured what's the point when nearly all people are zombies going with the flow. Wow, who would have thought that the data of tens of millions of dumb zombies would be so important to companies? Especially because most people were originally mentally programmed by industry teaming up with the education system 100 years ago in the first place. Yeah it doesn't make much sense, they programmed you and now they collect the data they programmed you with. Well ok then, whatever floats your boat.