Target, Google, and privacy

By Felix Salmon
February 16, 2012
Charles Duhigg's story about corporate “predictive analytics” is the reaction of Target's PR department when they found out he was writing it.

" data-share-img="" data-share="twitter,facebook,linkedin,reddit,google" data-share-count="true">

The most interesting part of Charles Duhigg’s story about corporate “predictive analytics” is the reaction of Target’s PR department when they found out he was writing it.

When I approached Target to discuss Pole’s work, its representatives declined to speak with me… When I sent Target a complete summary of my reporting, the reply was more terse: “Almost all of your statements contain inaccurate information and publishing them would be misleading to the public. We do not intend to address each statement point by point.” The company declined to identify what was inaccurate. They did add, however, that Target “is in compliance with all federal and state laws, including those related to protected health information.”

When I offered to fly to Target’s headquarters to discuss its concerns, a spokeswoman e-mailed that no one would meet me. When I flew out anyway, I was told I was on a list of prohibited visitors. “I’ve been instructed not to give you access and to ask you to leave,” said a very nice security guard named Alex.

I’m sure that Target didn’t get its name from the way that it sends marketing materials and coupons customized to individual shoppers. But maybe the name is part of the reason why the company’s so wary about talking about the details of its marketing operations. A bigger part, though, is what I’ve called the uncanny valley of advertising — the way that we feel that we’re being spied on, when a big faceless corporation seems to know very intimate things about us. Like, for instance, the fact that we’re pregnant.

“If we send someone a catalog and say, ‘Congratulations on your first child!’ and they’ve never told us they’re pregnant, that’s going to make some people uncomfortable,” Pole told me. “We are very conservative about compliance with all privacy laws. But even if you’re following the law, you can do things where people get queasy.”

It’s incredibly important to Target that it have the ability to tell when you’re pregnant, before you have your child; Duhigg goes into great detail about why that’s the case, but it basically comes down to pregnancy being one of a very few opportunities for retailers to gain market share in the zero-sum game that is your basic household expenditure. As such, you can be sure that this kind of targeting is going to become increasingly commonplace, as retailers engage in a targeting war, trying harder and harder to capture the shopping dollars of new families and families-to-be.

And truth be told, it’s good for consumers to have lots of corporations falling over each other to offer us great prices and great, personalized, service. But while we love the prices and the service, we also like a little veneer which allows us to kid ourselves that we still have privacy:

“We have the capacity to send every customer an ad booklet, specifically designed for them, that says, ‘Here’s everything you bought last week and a coupon for it,’ ” one Target executive told me. “We do that for grocery products all the time.” But for pregnant women, Target’s goal was selling them baby items they didn’t even know they needed yet.

“With the pregnancy products, though, we learned that some women react badly,” the executive said. “Then we started mixing in all these ads for things we knew pregnant women would never buy, so the baby ads looked random. We’d put an ad for a lawn mower next to diapers. We’d put a coupon for wineglasses next to infant clothes. That way, it looked like all the products were chosen by chance.

“And we found out that as long as a pregnant woman thinks she hasn’t been spied on, she’ll use the coupons. She just assumes that everyone else on her block got the same mailer for diapers and cribs. As long as we don’t spook her, it works.”

This is going to be a very fine line, for years to come. So long as we don’t know that iPhone apps have access to our address book, everything’s fine — but then it’s revealed that Path has that information, and there’s a huge kerfuffle, and Apple ends up changing its policies.

Richard Falkenrath is pushing for a “right to be forgotten”, whereby individuals could ask companies to erase all the data and metadata that they possess about them. He says that it’s “essential to protect personal privacy in the age of pervasive social media and cloud computing”, but I think he’s importantly wrong. We’ve never really had personal privacy, we have less privacy than ever before, and extra legislation, while making a difference at the margins, is never going to return us to some mythical prelapsarian state where Big Brother knows nothing about us.

And indeed, few of us would want to return to that state. I get a steady stream of books and press releases here at Reuters, most of which I have very little interest in. But at least they’re a little bit targeted: they tend to be about business or finance, broadly. And some of them I actually like a lot, and end up in a blog post somehow. If I just got a random subset of all the books being published, or all the press releases being put out, my situation would be far worse than it is now. Because the people sending the books and releases know something about me, they attempt to send me only things I might conceivably be interested in. (At least in theory. Does anybody know how to unsubscribe to the TMZ mailing list?)

We’ve always lived in a world of personalization and targeting, from the maitre d’ who knows your name and favorite table at the fancy neighborhood restaurant, to the way in which corporations pay more money to advertise in the Wall Street Journal than they do to advertise in the New York Post, on the grounds that the Journal is more likely to reach rich professionals.

Nowadays, computers have made it increasingly possible to fine-tune personalization down to the individual level, where it can sometimes get “spooky”. (Although I’m convinced that spookiness increases with age: that in general young people are much less fazed by this kind of personalization than old people are.) If sophisticated corporations manage to make their marketing materials less spooky, I don’t think there’s going to be much popular opposition to continued targeting — at least not in this country. Germany is different: Germans care a lot about their privacy, and fight hard for it.

Here, however, I’ve never received a good answer to the “why should I care?” question — and certainly Falkenrath doesn’t provide one. All he does is hint at a vaguely dystopian scenario, and leave the rest to the reader’s imagination:

Picasa has a tagging feature that can tell Google where and when photographs were taken, and an advanced facial recognition feature that allows Google to identify individuals it has seen in one photo in any photo in the user’s digital library. Integrating just these three services with Google’s core search function could allow Google to locate individuals in virtually any digital photograph on the internet, and so derive where each user has been, when, with whom and doing what. Add YouTube to the mix, or Android smartphones, or whatever other database Google develops or buys – the implications are breathtaking.

If you’re pessimistically inclined, the breathtaking implications are negative. On the other hand, there are lots of positive potential implications, too. And the fact is that companies like Target and Google have no interest in becoming some kind of Hollywood corporate villain; that kind of behavior tends not to be nearly as profitable as screenwriters might think. So my feeling is that if they do become evil, we should cross that bridge when we come to it. As News International is discovering, genuine invasions of privacy can be fatal to any company. In the meantime, trying to legislate a “right to be forgotten” would probably cause much more harm than good.

More From Felix Salmon
Post Felix
The Piketty pessimist
The most expensive lottery ticket in the world
The problems of HFT, Joe Stiglitz edition
Private equity math, Nuveen edition
Five explanations for Greece’s bond yield
Comments
20 comments so far

As the theme from Cheers used to say, you want to go to a place where everyone knows your name. That’s called the planet Earth.

Posted by Curmudgeon | Report as abusive

The problem to me isn’t good targeting – its all the bad targeting.

Despite millions of hours (billions???) visiting porn sites and very, very specific desires of women of certain races with big booties, I get chubby white gay bears….honestly, who is in charge of monitoring me!??! OK, I am neat, thin, and buy cook books and kitchen gadgets, but I am not gay (not even in the closet) – I don’t care what your algorthm says!!!

Posted by fresnodan | Report as abusive

Wow, I love ya Felix, but you’re completely missing the boat on the implications of privacy. Most people don’t (or at least shouldn’t) really care about a nameless, faceless corporation having their personal information. What they should care about is this nameless, faceless corporation (inadvertently?) sharing their information with a third party that does matter to them. Here are some scenarios based on what you have above.

Sue is an 18 year old girl that lives with her parents. She gets pregnant but has not worked up to telling her parents yet. To prepare, she goes out and buys some baby products at Target. Target sends a mailer to her house announcing “Congratulations on your pregnancy Sue!”. In this case, Target effectively outed her pregnancy. No one cares that the nebulous “Target” entity knew about her data, it’s what they did with it.

Here’s another. John is planning on proposing to his live-in girlfriend at a scenic location. He scouts out each of these locations and takes pictures on his smartphone so that he can refer back to them. Later on, his girlfriend uses Google’s breathtaking new image location search feature and sees that John has recently been to a slew of romantic destinations that she had no idea about. Way to force John to explain his surprise engagement Google!

There’s entire lists of incidents just like these that have already occurred. Privacy isn’t about people you’re never going to meet having information about you (unless of course they’re going to use it maliciously). It’s about that information being disclosed to people that you’re close to outside of your control.

Posted by spectre855 | Report as abusive

My take on Felix’ post is that this is a re-hash of what Scott McNealy said back in 1999:

http://www.wired.com/politics/law/news/1 999/01/17538

“You have zero privacy anyway,” Scott McNealy told a group of reporters and analysts Monday night at an event to launch his company’s new Jini technology. “Get over it.”

Posted by Strych09 | Report as abusive

I get a ton of senior living and senior citizen type ads despite being under 40. “They” haven’t perfected targeting yet. It is tempting to take the financial planners up on the “free steak dinner and seminar for retirees” though, lol.

Posted by david3 | Report as abusive

@Strych09, if that is what Felix is saying then I disagree with the sentiment. 99% of what I consider private data such as health info, minute-to-minute location, web browsing history, etc. would be almost impossible for my mother to figure out just based on what’s currently available to the public.

The types of things that Felix is advocating above could potentially change that. Again, I’m not worried about law enforcement, Google, or Target having access to my data. I’m worried about my mother, friends, and boss having access to my data.

Several companies have already proven that they don’t understand the implications of making information public. Look at the Google Buzz, Netflix “anonymous” viewing history, Facebook private message, and Playstation Network fiascoes. Those are just a couple examples of private data being made available not just to the companies in question but also to anyone that you know personally. And two of these examples were actually intentional.

Posted by spectre855 | Report as abusive

An aside: insurance companies would pay a lot of money for this information.

My perspective: if you tend to view corporate bodies and governments as just that, corporate, rather than the teeming masses of greedy, leering, nosy, stinking people, even murderous at times, that they are composed of, then you become a lot less sanguine about them having intelligence files on your life.

Keep them at arms length, I say.

Posted by BarryKelly | Report as abusive

To clarify: I meant more sanguine, rather than less sanguine, in my previous comment.

To clarify further: have a ponder about what it means to have private information on someone else, on a personal level. Think about how that feels as a power dynamic; with every face you see, being able to call up information they wouldn’t willingly share with a stranger on the street. Think about how it lets you objectify them, almost dehumanize them, as you think about the leverage and manipulation capabilities your knowledge gives you.

Simple example.

See that pretty girl who comes through every Friday? How would you like to know where she lives, who she knows, when she’s single, what her drinking habits are, where she goes on a Saturday night, etc.?

There are guys who like to know that info. And they work for companies and governments.

Posted by BarryKelly | Report as abusive

Well, then, we know at least one store that has no objection to Amazon’s price-check app.

Privacy, like respect, is a two-way street. In fact the two principles have much to do with each other.

Posted by TFF | Report as abusive

I was wondering why, out of the blue, Babys-r-us started sending me catalogs, even though I knew no one who was pregnant.

And AARP, really, they’ve been sending me stuff since I hit 30.

These companies must have lousy algorithms.

Posted by GRRR | Report as abusive

I read an interview with Jonathan Schwartz, former Sun CEO, earlier this week where he was commenting negatively on the Google/Facebook model where a service is free to users with money made from advertising. He was talking the book of his current company, CareZone, but he has a point. There’s a certain conflict for a company when the user, specifically the user’s information, is the product and the real customer is the advertiser paying to target that user based on the user’s information.

One implication is that I think services like Facebook will develop into freemium models that offer a choice – a pay service in which no user info is provided to advertisers and a free service in which user info is used to target ads. Revenue per user for Facebook is low enough that the economics could work.

Another implication is that this privacy issue is another reason why “free” software (e.g., GoogleDocs) won’t displace pay software in enterprises. Set aside questions of robustness and support – a company would rather pay a couple hundred bucks per seat for Office than rely on reassurances from the Googles of the world, whose business model is finding value in the data it collects about users, that they will protect users’ confidential business information.

Posted by realist50 | Report as abusive

What people take issue with isn’t the collection of data, per se, it’s the use of the data in ways which they have not knowingly consented to (given how most corporations have virtually unreadbale consent statements and are opt-out rather than opt-in), such as being shared with other entities other than that which originally collected the data. After all, it’s only the confluence of data through sharing among various entities that allows corporations and/or government entities to draw a complete and accurate picture of a person’s personal habits and activities.

If the worst thing that ever happens to me because of the lack of governmental protections for my privacy is that I get bombarded with ads from various corporations trying to sell me stuff, I will consider myself very fortunate. Given how easy these databases supposedly are to hack, I’m much more worried about my identity being stolen, and/or infomation about me and my family being intentionally or inadvertantly being made public that we intended to remain private.

IMHO, the bigger danger is the proliferation of GPS chips in devices….between your car and your cellphone, it wouldn’t be too difficult for the government or anyone else to track your movements, especially if combined with tracking of your credit cards.

Imagine, for example, what would happen to a teacher or coach who was discovered by parents at their school to buy porn or sex toys online, engage in BDSM, or frequent strip clubs…they almost certainly would lose their jobs and likely have their careers ruined despite doing nothing wrong, never mind being excellent targets for blackmailers in the meantime.

The danger isn’t just the collection of such data, it’s the fact that due to weak laws and mediocre database security, it may inadvertantly fall into the hands of people who have no business knowing about it.

Posted by mfw13 | Report as abusive

“The ability to tell when you’re pregnant, before you have your child…”

Generally while you are pregnant, you haven’t had the child yet. It’s kind of binary.
Unless you meant, “before you have your FIRST child”.
In which case, say that.

I like this direct marketing.
Before I signed up to a bunch of helpful online retailers, I never realised the astonishing level of vouchering, couponing, sales, special deals etc…
Has it made me buy more?
I don’t THINK so, although to be honest I couldn’t be sure.
However, for consumables such as food, drink, cycling equipment etc… it has certainly made me buy cheaper.

Posted by TinyTim1 | Report as abusive

This is one of the reasons that when I have to go into one of these places, I pay cash. No name, no number, no Guest ID. I don’t want them to send me any fliers and coupons or offers, no matter how targeted. I know what’s in the store. I don’t want to be assaulted with a constant barrage of marketing materials jamming my mailbox with pleas to buy a lot of crap I don’t really need.

Posted by Moopheus | Report as abusive

I am single with no children. I buy baby items all the time at Target for nieces and friends. I have never received anything in the mail that made me uncomfortable or suggested to the world that I am pregnant. I have certainly never received anything that said “Congratulations on your new baby!” If I did receive such a mailer, it would also not make me feel “outed.” It’s a piece of mail.

Every time I buy something, I’m giving information to the retailer about my buying preferences. This is true whether it’s digital information or not. Back in the ‘good old days’ the town grocer and dry goods store owner knew everything about everyone’s buying preferences. That information was also used at the shop owner’s discretion. I don’t really see my purchasing habits as private information.

Posted by SarahRL | Report as abusive

I take a certain pleasure in confirming my suspicion that with every coupon, click, and convenience, comes intrusion. It really adds to my confusion as to people’s concerns with Facebook. Privacy, for better or worse, has been permanently redefined. I natter more here: http://heresheisboys.com/2012/02/05/u-ni dentifiedf-acebooko-bjections/

Posted by BrendaTNYC | Report as abusive

I take a certain pleasure in confirming my suspicion that with every coupon, click, and convenience, comes intrusion. It really adds to my confusion as to people’s concerns with Facebook. Privacy, for better or worse, has been permanently redefined. I natter more here: http://heresheisboys.com/2012/02/05/u-ni dentifiedf-acebooko-bjections/

Posted by BrendaTNYC | Report as abusive

I believe that Felix completely misses the boat on this one! The concern is not that Company A knows you buy 2% milk and if you buy a home pregnancy test, might send you a coupon for diapers. The concern is that Company A will sell this information – without your knowledge and consent – to any and all who will pay for it; the concern is that it will be used by insurance companies to deny your policy application because they have learned that your dad takes blood pressure meds or your brother suffers from depression, both of which run in families so you could be at higher risk. The employer that may deny employment, or impede advancement, because of personal information they bought from a third party data collection service without your knowledge.

Consumer credit scores are already used to increase car insurance premiums even for existing customers with no infractions and for increases in homeowner insurance where there is no claim or increased risk except a change in credit rating (as defined by the same agencies that gave AAA ratings to the sliced and diced sub-prime mortgages and have been notorious for years for keeping inaccurate data on file). Many consumers do not even know that each time they go to the doctor, the data on their diagnosis and treatment goes to a medical reporting company that keeps this information on file about them to release to any future insurance company. Your so-called private health information is anything BUT private!

Data is already being mined and used in too many ways that are not fair or in the best interest of the individuals, but are purely to increase corporate profit. Americans need to wake up soon to these ever growing concerns or in another generation or so, forever lose any semblance of freedom.

Posted by MidwestVoice | Report as abusive

Why shouldn’t people be allowed a right of privacy? Because you don’t consider it necessary for yourself? Sorry, but that line of reasoning doesn’t deserve the platform afforded by Reuters. If you want to receive the benefits of exposure, great. How in the world do you get from that to deciding for someone else whether or not they should have a right to privacy? There might be an argument in opposition to the “right to be forgotten,” but you didn’t make it.

Posted by elpasoelchuco | Report as abusive

I came home from work today and openend my mail and there is was “Congrat’s on saying I do” from target. I’m fuming! I’m not only 31yr old single female but I get enough hype that I’m still single and then have to come home to relax and I get slapped in the face by Target. If anyone has names at Target who I can contact I would love to know. I’m a marketing manager for a digital analytics company and I know more about privacy and what online information companies have access to but this is crossing the line when you offend people with your marketing materials!

Posted by tiz450s | Report as abusive
Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/