It’s always interesting when things which are relatively well-known to a certain subculture make their way into the public eye. Case in point: a recent Washington Post article about how financial marketers use data.
The headline is “‘X-tra Needy’ and ‘American Royalty’: The stereotypes credit card companies use to target us all.” Here’s how it begins:
Every time you buy something, your activity has likely been catalogued, analyzed and used to build a profile of you before you even leave the store. Your identity gets shoveled into any number of buckets that data vendors sell to marketers as distinct groups of people who will be more susceptible to messaging. What do these buckets look like? And what do companies that sell your data think of you?
Thanks to a new Senate Commerce Committee report, we now have a picture of how that process works — and it’s not pretty. The paper, released this week, is the result of a year-long study of the major credit reporting agencies — Experian, Equifax and TransUnion — as well as lesser-known marketing firms like Axciom, Epsilon, Datalogix and Reed Elsevier. These companies maintain huge lists on consumers, the report says. Axiom told the committee it has at least some insight on 700 million consumers around the globe, including “over 3,000 propensities for nearly every U.S. consumer.” Datalogix said its database covers “almost every U.S. household.”
We already had “a picture of how that process works”, but whatever. What’s apparently ruffling feathers is graphics like this, which show some of the segment names used to describe people:
The article continues:
On the one hand, these categories make a certain amount of sense if you’re trying to make sure your advertising dollars are going to the right people. In the abstract, one could argue that by targeting certain groups with products that appear to be more affordable to them these companies are encouraging consumers to spend in a more efficient manner. But the apparent casualness that they take in describing and categorizing huge swaths of the public could rub some people the wrong way.
“Apparent casualness?” This is what database marketers do for a living! Are they supposed to approach demographic segments with a sense of awe and wonder every single day of their working lives? Should they just describe every single segment as “upscale yuppies” so that nobody’s feelings get hurt?
Which brings us to our headline quote:
“I am disturbed by the evidence showing that that data brokers segment Americans into categories based on their incomes,” said Sen. Jay Rockefeller (D-W. Va.). “I want to know how and why data brokers are putting Americans consumers into categories like these.”
Sen. Rockefeller, this stuff is no mystery. In fact, let me Google that for you. How: they get data from public records and from data vendors. Why: to help companies market more efficiently. Should banks market private banking services to the poor in the name of avoiding income-based segmentation?
If Sen. Rockefeller had been keeping up with this blog–and shame on him for not doing so–he might have noted this post a few months ago about Axciom. Speaking of which, this new Senate Commerce Committee report explains why Axciom started a PR push all of a sudden. Shedding some light on processes like this is always a good thing, but there’s no need for Senatorial grandstanding on mundane topics like database marketing while banking criminals are still running amok.
As the Christmas shopping season winds down, here are some thoughts from the ghost of Christmas past. Specifically, this is from Newsweek circa 1995:
Then there’s cyberbusiness. We’re promised instant catalog shopping—just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet—which there isn’t—the network is missing a most essential ingredient of capitalism: salespeople.
Hopefully they’ll figure out a way to move money around the internet someday…
MONEY SALE AT STAPLES: A nice money sale at Staples! Get $15 back on a $200 Visa prepaid debit card (the ad says $150, but of course they don’t sell that denomination), plus you can get another $15 back on a $200 MasterCard. And hopefully you’ll get 2,000 points on your credit card as well. Note that this only goes through December 24.
FREE TURBOTAX: One of the great deposit account bonuses returns for another year: State Farm Bank is offering free TurboTax Deluxe to its customers. I can testify that their checking account has no monthly fees and no minimum balance, so what are you waiting for? Free TurboTax! This FWF thread has detailed instructions on how to get the freebie.
MERRY CHRISTMAS, HAPPY NEW YEAR: Posting will probably be a little sparse the next two weeks. Happy holidays to all of you, and thanks for reading!
FAST FOOD ADVERTISEMENTS VS. REALITY: Very funny: