BOB GARFIELD: What makes you more nervous, the government spying on you or private companies? At a hearing this week of the Senate Commerce Committee, Senator Jay Rockefeller weighed in.
[CLIP]
SENATOR JAY ROCKEFELLER: I’ve served on the Intelligence Committee since before 9/11, and I – I can declare to you absolutely without a single thought, that the protection that NSA provides to security and secrecy is far better than what we’re going to be talking about today.
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BOB GARFIELD: They were talking about the consumer data industry, brokering date on everything from your age to your preferred brand of soft drink. Even the segmentation of consumers into cohorts of demographic and financial similarity struck Rockefeller as perverse.
[CLIP]:
SENATOR JAY ROCKEFELLER: They sort economically vulnerable customers into groups, with names like “rural and barely making it.” I’m not making it up. That’s one of their categories. Tough start, young single parents, rough retirement, small town and rural.
[END CLIP]
Kate Kaye covers the data industry for Advertising Age, and she joins me now. Kate, welcome to On the Media.
KATE KAYE: Thanks, Bob.
BOB GARFIELD: We live in a world of big data and data which is obtained by brokers like Experian and Axiom routinely, but through different means, most of which we surrender ourselves through what, terms of service agreements and the like?
KATE KAYE: And even just transactions that might happen through our credit card companies. They might provide aggregated information. Or a grocery store loyalty program might pass on very high-level information about types of products that people in a certain region buy. And then it might be really traditional approaches to data brokerage that come from the catalog industry.
If you subscribe to J. Crew or Crate and Barrel or they just automatically are sending you a copy of their stuff, all those catalog companies pool all of their data into a – what they call a data co-op, and they agree to give a bunch of information, so then they get a bunch of information from the whole pool of the catalog industry. That's how a lot of these industries work.
BOB GARFIELD: And a lot of the data sold is anonymized, so that Procter & Gamble doesn't really know about Kate Kaye –
KATE KAYE: Right.
BOB GARFIELD: - and what you're doing. You’re just data point for them.
KATE KAYE: Yes.
BOB GARFIELD: But, that said, some of the stuff is just mega creepy.
KATE KAYE: Absolutely.
BOB GARFIELD: Just give me some examples of the kinds of things that gave Senator Jay Rockefeller the heebie-jeebies.
KATE KAYE: The sale of lists of rape victims. I don’t even know where that data comes from but maybe law firms want to buy it. The idea of using really specific health data to target us, so if you’re perceived as a diabetic or maybe you've reached out to a company that says it can help you with your mother who has dementia, and then you end up in a list somewhere.
In a lot of ways, with those things you are actually telling the company you want more information. But the reality is most consumers don't really realize where that information’s gonna go and they think they're just giving it to this one company that’s gonna help them. They don't realize it's gonna be put into a list and they’re gonna be sold and resold and resold for countless other purposes.
BOB GARFIELD: Big data is not used only to target apparent diabetic’s with diabetes products. Rockefeller seemed particularly freaked out by what I think they call dynamic pricing, the process by which let's just say Amazon –
KATE KAYE: Mm-hmm.
BOB GARFIELD: - might charge a different price for the same product to different people –
KATE KAYE: Yeah.
BOB GARFIELD: - based on any number of factors – how many times they visited the catalog item –
KATE KAYE: Yeah.
BOB GARFIELD: - where they’re located geographically, what other things they’ve bought online, and so forth.
KATE KAYE: Yeah.
BOB GARFIELD: is there any aspect of big data that doesn't freak him out?
KATE KAYE: [LAUGHS] You know, something tells me that if he were running for reelection, which he’s not, that his campaign would be using some sophisticated data analysis and they would probably be buying lists that would have potential donors who would be interested in giving him money and voting for him and volunteering for him.
This stuff was praised during the 2012 election as the most sophisticated, amazing approach to political campaigning ever. Obama's people were like touted as like the most brilliant people ever, and now we’re looking at the consumer marketing industry doing the same thing that politics has done. Political people learned half of it from the marketing industry, and it's being demonized. I'm not saying either one is good or bad but there's, there's a really interesting dichotomy.
BOB GARFIELD: Well, you do raise an interesting point, and that is that Rockefeller was essentially shaking his fist at the industry [LAUGHS] and saying, well okay, you've stymied me now, but I'm –
[KAYE LAUGHS]
- I’m gonna be back and I’m gonna make your life a living hell.
KATE KAYE: Yeah.
BOB GARFIELD: But he isn’t –
KATE KAYE: Right.
BOB GARFIELD: - because he is a lame duck.
KATE KAYE: Yeah.
BOB GARFIELD: His term of office expires at the year’s end.
KATE KAYE: Right.
BOB GARFIELD: Is there anyone else in the Senate who seems ready to pick up where Rockefeller left off?
KATE KAYE: There are definitely people who are interested in doing it. It’s just a matter of like when’s the right time. The biggest problem with trying to legislate this stuff is the rapid pace of technology. And we’re looking at data coming from not just our digital media consumption but I mean our phones. The fact that the NSA scandal still is interesting to people and is raising awareness of privacy issues I think gives potential for some momentum behind comprehensive privacy legislation, but I don't know about next year.
BROOKE GLADSTONE: In the end, what is more of a threat to us as citizens, is it the gathering security state that has all sorts of metadata about our every electronic connection or Unilever, knowing about our hair care behavior?
KATE KAYE: Certainly, if you fear a police state, you’d probably answer the NSA. I think one thing that's interesting and one of the things why this has come to a head and why hearings like this have happened is because there's so much data now being collected. I can't tell you how many companies I've talked to who basically say. well, we’re collecting all this information, we’re not quite sure what, what we’re gonna do with it yet, but – that’s really disheartening [LAUGHS] to think about, but hey, the NSA is saying the same thing, aren’t they? [LAUGHS]
BOB GARFIELD: They are, indeed.
KATE KAYE: [LAUGHS]
BOB GARFIELD: Kate, thank you so much.
KATE KAYE: Thank you.
BOB GARFIELD: Kate Kaye reports on the data industry for Advertising Age.
