Aggressive Data Mining May Prompt Federal Regulation

An Ad Age Editorial

Published on .

Technological advances and a public now used to sharing information online has led to a new frontier for marketers, one in which they can mine rich data troves and serve up relevant and useful advertising. But marketers are risking the wrath of regulators and the public.

Marketers are now taking offline data (income, credit rating, home value, savings) and merging that with online data.

The offline data -- including extremely sensitive, personally identifiable information -- has been used by the direct marketing industry for decades. But only recently have marketers begun to connect it to online behavior.

But it's getting more common. "The line between merging online and offline data isn't no-man's land anymore; it's becoming more of a common practice," said Mike Zaneis, Washington lobbyist for the Interactive Advertising Bureau.

Just because you can do something doesn't mean you should.

As more companies start moving into this space, two things are likely to happen: 1) a massive accident or security breach and 2) more regulation.

Already, online data collection is getting some scrutiny from privacy advocates, the media and the Federal Trade Commission. But so far the public hasn't noticed.

That, of course, is one thing that has constantly driven privacy advocates crazy; the public typically doesn't much care about these privacy issues. As you read this, consumers are happily entering in personal information across the web. And the reality is, if they're going to have to see advertising during their surfing, they'd probably rather see marketing pitches that are relevant to their interests and lifestyles.

But that consumer passivity would likely change, however, if the marketing being served crossed a threshold of annoyance (see telemarketing, Do Not Call lists). And it would definitely change in the case of stolen or lost identities or sensitive information leaking out to the public at large.

Then there are the politics likely to come into play. The FTC is already watching. And it's not a very big stretch to imagine an unpopular Congress taking up the issue and playing it as a bipartisan matter of protecting unwitting consumers from nefarious marketers.

Indeed, this could be the worst time to be pushing the limits of addressable marketing. And TV players should be watching this closely. Any false moves now could lead to the sort of regulations that would nip their addressable TV dreams in the bud.

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