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.

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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.

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