Here at thedatabank, we sell data appending services to organizations that want to append email addresses, phone numbers, census data, political data, social media data, demographic data, wealth information, and on and on.
I’ve been in the database marketing business for some 25 years. Over that time I’ve run millions of individual consumer names through various data appending services trying to gain a better understanding of who they are and how can I get them to take action, and I’ve watched how the services have changed over the years.
A brief timeline of data appending services
In the 1990s, several consumer data services sprung up, mostly from credit reporting agencies like Experian (a company formerly owned by Bain Capital), which would append data they had collected to lists that you sent them. The data would usually be in the form of household income or demographic data like age, gender and education level.
We would take this information and use it for targeting direct mail packages written specifically for certain segments of an organization’s donor file. Wealthy, educated suburbanites would receive one version of an appeal, and inner-city blue collar workers a different letter. Sometimes this strategy didn’t result in any change in response, but most often we could see in increased rate of response to those targeted appeals versus the standard control appeal.
In the late 1990s, high speed laser printers made it possible to not only target segments of a list but to write individually personalized letters to everyone on your list based on data that you had in your database. John Jones would receive a letter which specifically mentioned his past relationship with the organization and ask for a new contribution that was based on his past giving, and maybe his identified potential to give more. While it cost more to print personalized letters, the increased response rates and larger gifts more than made up for the cost.
In 1996, two Stanford University students created a research project that became Google. In 2011, 96% of Google’s $38 billion in revenue came from the ability of Google to target search and web ads to individual consumers based on trillions of data points they continuously collect about people’s online activity.
Data appending today
A recent report in the NY Times about Acxiom, a consumer data company most people have never heard of, states that Acxiom has on average 1500 bits of data on every consumer in the U.S. – Data that they will happily sell to anyone willing to pay to buy it.
If you have a name and mailing address, for very little money, you can find out more than you ever imagined about someone. I personally would be hard pressed to list even a few hundred things about myself, let alone 1500.
In less than 30 years, we’ve gone from having a handful of data points on individuals to having so much data that it’s difficult to know where it begins and ends. It’s no coincidence that the increased amount of data collection has paralleled the rapid adaption of database software to help organizations sift through the glut of information and find something of value. And it’s only getting worse.
Now there’s social media data. 1 billion Facebook profiles, 340 million Tweets per day, 150 million LinkedIn users. The numbers are astounding and growing. What are people posting on your wall? Are they talking about you in their Tweets and how many followers do they have? The Internet has exponentially increased the amount of data created, shared, collected and sold.
Concerns over data privacy and protection
This rapid growth of data collection and selling has brought up numerous concerns about data privacy and protection. It seems a week doesn’t go by without a story about some server breach or stolen laptop that contained private data on 1000s of people. Over 100 million people in the US now have smart phones. If they’re like me, they have a contact list, calendar, text messages and emails on their phone, where if the phone is lost or stolen, the data could easily be extracted.
The US Congress just opened up hearings to investigate the practices of large consumer data brokers like Acxiom and Experian, but that’s just the tip of the iceberg. I’m not sure there is anything we can do to get the genie back in the bottle. But there are some things we should think about:
1. Understand that by using social media and search sites like Facebook and Google, you are accepting their privacy practices and are OK with them selling your information to the highest bidder. If you’re not OK with this then don’t use them.
2. Understand that most of the “free” apps you download to your phone are collecting data on you via your phone and selling that information to advertisers.
3. Understand that while the vast majority of people buying your data are relatively benign, there are plenty of unscrupulous people out there that will use your data for illegal profit and gain like stealing your identity. Nobody is protecting you from these criminals so you need to be vigilant.
Marketing companies say the rapid increase in consumer data is good for consumers because it helps make sure they see information about the products and services they are interested in. While this view is entirely self-serving, there is some truth in it – but at what cost? I don’t know the answer to that, but it’s a question we need to continually ask as the data points grow and grow.
The Fortunate Technologist & CEO of thedatabank, inc.