WSJ: Advertiser tracking on the rise - Stephen Baker

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WSJ: Advertiser tracking on the rise posted on July 31, 2010

Datamining

The Wall Street Journal publishes a report today (behind firewall) on cookies, and the growth of consumer-tracking on major Web sites. For the report, they analyzed big Web sites, including their own, and found that many dropped more than 100 cookies into visitors' computers. (The Journal dumps 60 cookies, slightly below the 64-cookie average on the 50 largest sites.) The only big site that doesn't track visitors is Wikipedia.org.

As a reader (and former editor) I found the Journal story maddenly vague. It says that cookies are on the rise, but doesn't give any historical context. It mentions data-analysis companies that are doing highly detailed work, but doesn't name them. And while it states what type of analysis they could do with this detailed data, it doesn't give examples of how it's being used. To wit:

"Some tracking files can record a person's keystrokes online and then transmit the text to a data-gathering company that analyzes it for content, tone, and clues to a person's social connections..... Data-gathering companies [can] build personal profiles that could include age, gender, race, zip code, income, marital status, and health concerns, along with recent purchases and favorite TV shows and movies."

Why not name a few of these companies, and, while they're at it, ask advertisers how such detailed profiles are being used? Also, note the use of the word "could" in the last sentence. Is there evidence that these unnamed companies are actually building these profiles? We don't know.

I dealt with these issues often while researching The Numerati. The problem here, as in much of the data economy, is the gap between the astonishingly rich trove of data and the undeveloped business model for it. Most companies simply don't know how to put the data to use. How do you deal with millions of detailed consumer profiles when you only have four or ten or 20 different types of ad campaigns? You ignore most of the details and put the people into enormous buckets. (Credit-card companies are a notable exception. They can create thousands of different offers and test them against different groups. But they've been at this since long before the age of cookies.)

Eventually advertisers will learn to make use of this information, if a privacy uprising doesn't shut cookies down. But for now much of this detail we're communicating with our clicks and keystrokes is piling up in data centers, largely ignored.

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