I recently came across a fairly big piece of news for the data business, somewhat buried in a little article inside the The Wall Street Journal. With my marketing ears piqued, I went online and found several other news agencies covering the story. Perhaps the most damning was a post by Al Lewis comparing the private data brokers to the IBM punch-card sorting machines the Nazis used to collect data to round up Jews. Ever wonder how someone got your information to send you an email or direct mail? Or how they’ve targeted ads to you on your smartphone browser, or in your Facebook News Feed? (Well, the last one isn’t exactly a great mystery, considering we willingly surrender our info to Facebook.)
Edith Ramirez at the FTC was interested in finding the answers to these questions and, so, started an investigation back in 2012 focusing on nine of the larger data brokers in the business: AcxiomCoreLogicDatalogix, eBureau, ID Analytics, Intelius, PeekYou, Recorded Future, and RapLeaf. I’m guessing you’ve heard of some of these. All collect tons of data on everything you do—from online shopping behavior to offline credit card transactions and anything else they can get their hands on. The FTC has found that these organizations operate with a “fundamental lack of transparency” and wants Congress to pass legislation to require more transparency about where and how they collect their data, as well as who they sell it to.
The DMA (Direct Marketing Association) is not a stranger to this type of threat against some of their members’ core business, and has a powerful lobby in Washington effectively bribing Congress to do nothing. But the telemarketing industry failed to block legislation for the National Do Not Call (DNC) Registry more than 10 years ago now (because even Congress thinks phone calls at dinner are annoying). Now the FTC wants a similar system for data brokers: an online database disclosing the source of their data and giving consumers the opportunity to opt out of data collection.
Surprisingly, six of these nine companies already offer an opt-out option. But finding them is another story. And because there are hundreds of data brokers, there’s a good chance your data has been sold to several dozen others that you’d have to hunt down. This is where the FTC wants to simplify things for the consumer by creating a single database listing all sources and one opt-out option for all—much like the DNC Registry that has killed off just about all legitimate telemarketing operations. The same would likely happen with data brokers and I imagine the response to being able to opt out of data collection in the post-Snowden era might be huge, leaving us with very little data to use in marketing.
Personally, I’m all for transparency and the option to opt out. I’m on the DNC as well and I would be one of the first to register as an opt-out with the data brokers. On the other hand, unlike random ads or spam email, relevant targeted banner ads and email marketing are, in fact, attractive to some recipients. The full report is available on the FTC website here.