Data Brokers: The Dark Side of Personalized Advertising

Recently, the owner of a data brokerage firm released an unsettling video showcasing the extent of his industry’s ability to gather and analyze information about billions of individuals. This revelation highlights significant concerns surrounding privacy and surveillance in our digital age.

Major Acquisitions in the Data Brokerage Industry

In 2019, the data broker Epsilon was acquired by the French advertising giant Publicis Groupe. Earlier this month, Publicis further expanded its data capabilities by acquiring Lotame, another firm specializing in data and advertising. Publicis CEO Arthur Sadoun emphasized that this integration would enable the company to deliver “personalized messaging at scale” to an astounding 91 percent of adult internet users worldwide.

The Mechanics of Personalized Advertising

To achieve such tailored advertising, Publicis must collect a vast array of data on its audience. In the video, Sadoun presents a software program called CoreAI, detailing how the company can predict and analyze individual consumer behavior. He introduces a hypothetical character, “Lola,” who embodies the average web user data that Publicis possesses.

“At a base level, we know who she is, what she watches, what she reads, and who she lives with,” Sadoun explains. “Through the power of connected identity, we also know who she follows on social media, what she buys both online and offline, when she buys, and crucially, why she buys.”

The Intrusiveness of Data Collection

It gets even more alarming. Sadoun elaborates, “We know that Lola has two children and that they consume a significant amount of premium fruit juice. Monitoring local pricing trends, we observe that the cost of the SKU she purchases has been rising steadily, while her income has not kept pace with inflation. With CoreAI, we can predict that Lola might switch to private label alternatives.” In essence, if the software determines Lola is likely to seek cheaper options, it can automatically serve her ads for those budget-friendly juice brands.

This level of scrutiny isn’t just limited to Lola; it extends to nearly all internet users. “Thanks to CoreAI, we have this data on 91 percent of adults worldwide,” Sadoun boasts, representing nearly four billion people.

The Risks of Data Brokerage

Lena Cohen, a technologist with the Electronic Frontier Foundation, points out the risks posed by data brokers like Publicis. “The data broker industry is under-regulated, opaque, and dangerous,” she states. “These brokers hold detailed information on billions of individuals, yet we understand so little about their practices.” She underscores the lack of transparency regarding what data is being collected, who is purchasing it, and how it’s being utilized, creating a significant power imbalance.

The Need for Comprehensive Regulation

Meaningful regulation of the data brokerage industry remains largely absent. “The U.S. requires a comprehensive federal privacy law,” Cohen asserts, although she expresses doubts about the likelihood of such legislation passing. Even existing state-level regulations, like the California Consumer Privacy Law, often lack the necessary resources for effective enforcement, resulting in widespread data misuse.

The Future of Online Advertising

Cohen argues that online behavioral advertising—which relies on gathering data from an individual’s browsing habits—should be prohibited. “Advertisers should not have access to this level of personal data,” she contends. She supports contextual advertising, which focuses on the content of a webpage rather than individual browsing data. She believes that prohibiting behavioral ads would fundamentally alter the financial motivations behind continuous surveillance, compelling corporations to stop sharing user data with harmful brokers.

FAQs About Data Brokerage and Privacy

What is a data broker?

A data broker is a company that collects personal information from various public and private sources, analyzes it, and sells it to other businesses for marketing or other strategic purposes.

How do data brokers collect information?

Data brokers use various methods to collect information, including online tracking, public records, social media interactions, and data purchased from other companies to create detailed profiles of individuals.

What are the risks associated with data brokerage?

The primary risks include potential privacy violations, unauthorized access to personal information, and misuse of data that can lead to identity theft or targeted manipulation.

Are there any regulations for data brokers?

While some state-level privacy laws exist, there is currently no comprehensive federal regulation in place in the U.S. to oversee practices in the data brokerage industry, leading to significant concerns regarding consumer protection and data security.

What can individuals do to protect their data?

Individuals can take several steps to protect their data, such as using privacy-focused browsers, adjusting privacy settings on social media accounts, and being cautious about sharing personal information online.