A Guide to the Digital Advertising Industry That's Watching Your Every Click

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In this excerpt from his new book, The Daily You, University of Pennsylvania professor Joseph Turow takes you on a tour of the industry that's trafficking in the data you generate every day on the Internet. You don't have to be a privacy stickler to be worried.

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At the start of the 21st century, the advertising industry is guiding one of history's most massive stealth efforts in social profiling. At this point you may hardly notice the results of this trend. You may find you're getting better or worse discounts on products than your friends. You may notice that some ads seem to follow you around the internet. Every once in a while a website may ask you if you like a particular ad you just received. Or perhaps your cell phone has told you that you will be rewarded if you eat in a nearby restaurant where, by the way, two of your friends are hanging out this very minute.

You may actually like some of these intrusions. You may feel that they pale before the digital power you now have. After all, your ability to create blogs, collaborate with others to distribute videos online, and say what you want on Facebook (carefully using its privacy settings) seems only to confirm what marketers and even many academics are telling us: that consumers are captains of their own new-media ships.

But look beneath the surface, and a different picture emerges. We're at the start of a revolution in the ways marketers and media intrude in -- and shape -- our lives. Every day, most if not all Americans who use the internet, along with hundreds of millions of other users from all over the planet, are being quietly peeked at, poked, analyzed and tagged as they move through the online world. Governments undoubtedly conduct a good deal of snooping, more in some parts of the world than in others. But in North America, Europe, and many other places, companies that work for marketers have taken the lead in secretly slicing and dicing the actions and backgrounds of huge populations on a virtually minute-by-minute basis. Their goal is to find out how to activate individuals' buying impulses so they can sell us stuff more efficiently than ever before. But their work has broader social and cultural consequences as well. It is destroying traditional publishing ethics by forcing media outlets to adapt their editorial content to advertisers' public-relations needs and slice-and-dice demands. And it is performing a highly controversial form of social profiling and discrimination by customizing our media content on the basis of marketing reputations we don't even know we have.

Consider a fictional middle class family of two parents with three children who eat out a lot in fast-food restaurants. After a while the parents receive a continual flow of fast-food restaurant coupons. Data suggest the parents, let's call them Larry and Rhonda, will consistently spend far more than the coupons' value. Additional statistical evaluations of parents' activities and discussions online and off may suggest that Larry and Rhonda and their children tend toward being overweight. The data, in turn, results in a small torrent of messages by marketers and publishers seeking to exploit these weight issues to increase attention or sales. Videos about dealing with overweight children, produced by a new type of company called content farms, begin to show up on parenting websites Rhonda frequents. When Larry goes online, he routinely receives articles about how fitness chains emphasize weight loss around the holidays. Ads for fitness firms and diet pills typically show up on the pages with those articles. One of Larry and Rhonda's sons, who is 15 years old, is happy to find a text message on his phone that invites him to use a discount at an ice cream chain not too far from his house. One of their daughters, by contrast, is mortified when she receives texts inviting her to a diet program and an ad on her Facebook page inviting her to a clothing store for hip, oversized women. What's more, people keep sending her Twitter messages about weight loss. In the meantime, both Larry and Rhonda are getting ads from check-cashing services and payday-loan companies. And Larry notices sourly on auto sites he visits that the main articles on the home page and the ads throughout feature entry-level and used models.

His bitterness only becomes more acute when he describes to his boss the down-market Web he has been seeing lately. Quite surprised, she tells him she has been to the same auto sites recently and has just the opposite impression: many of the articles are about the latest German cars, and one home-page ad even offered her a gift for test-driving one at a dealer near her home.

This scenario of individual and household profiling and media customization is quite possible today. Websites, advertisers, and a panoply of other companies are continuously assessing the activities, intentions, and backgrounds of virtually everyone online; even our social relationships and comments are being carefully and continuously analyzed. In broader and broader ways, computer- generated conclusions about who we are affect the media content-the streams of commercial messages, discount offers, information, news, and enter- tainment-each of us confronts. Over the next few decades the business logic that drives these tailored activities will transform the ways we see ourselves, those around us, and the world at large. Governments too may be able to use marketers' technology and data to influence what we see and hear.

From this vantage point, the rhetoric of consumer power begins to lose credibility. In its place is a rhetoric of esoteric technological and statistical knowledge that supports the practice of social discrimination through profiling. We may note its outcomes only once in a while, and we may shrug when we do because it seems trivial -- just a few ads, after all. But unless we try to understand how this profiling or reputation-making process works and what it means for the long term, our children and grandchildren will bear the full brunt of its prejudicial force.

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The best way to enter this new world is to focus on its central driving force: the advertising industry's media-buying system. Media buying involves planning and purchasing space or time for advertising on outlets as diverse as billboards, radio, websites, mobile phones, and newspapers. For decades, media buying was a backwater, a service wing of advertising agencies that was known for having the lowest-paying jobs on Madison Avenue and for filling those jobs with female liberal arts majors fresh out of college. But that has all changed. The past twenty years have seen the rise of "media agencies" that are no longer part of ad agencies, though they may both be owned by the same parent company. Along with a wide array of satellite companies that feed them technology and data, media agencies have become magnets for well-remunerated software engineers and financial statisticians of both sexes.

In the United States alone, media-buying agencies wield more than $200 billion of their clients' campaign funds; they use these funds to purchase space and time on media they think will advance their clients' marketing aims. But in the process they are doing much more. With the money as leverage, they are guiding the media system toward nothing less than new ways of thinking about and evaluating audience members and defining what counts as a successful attempt to reach them. Traditionally, marketers have used media such as newspapers, magazines, radio, billboards, and television to reach out to segments of the population through commer- cial messages. These advertisers typically learned about audience segments from survey companies that polled representative portions of the population via a variety of methods, including panel research. A less prestigious direct-marketing business has involved contacting individuals by mail or phone. Firms have rented lists of public data or purchase information that suggests who might be likely customers.

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Joseph Turow is a professor at the Annenberg School for Communications at the University of Pennsylvania.

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