December 4, 2014
I love listening to Pandora Radio. Not only for the streaming music, but also because apparently, they encourage learning a foreign language. Some of the commercials I hear are in Spanish. I don’t mind not understanding the commercials, but I wanted to understand why this was happening. I discovered it’s all about data tracking. Here’s how it works, who the companies are who are collecting the data, and some of the flaws.
First-party data is YOUR data. This can include data from your behavior and actions online. It’s your subscription data; social data; or data from your mobile web or apps.
Second-party data is basically first-party data that companies get directly from the source. For instance, a high-end watch might partner with a yacht blog to ﬁnd new customers based on demographic overlap.
Third-party data is aggregated data generated from several sources and platforms. This data can be bought and sold.
So, who is tracking us?
Mobile Apps. Apps that stream music such as Pandora, fitness tracking apps like , or apps that help you locate your friends, like Foursquare, use location data. Mobile apps collect first-hand data as you sign up for service. They also use third-party data. Some of the third-party companies in this arena are Adobe, 4Info, ShareThis, Ignitionone and Exclate.
Loyalty cards. Retail shopper loyalty cards track your data when you purchase products by using tracking codes. Companies such as Catalina, Oracle and Tradata collect shopper and loyalty card data.
Social media. First-party data on social media platforms are collected by companies such as Merkle, Media Math and Datalogix.
Why all the tracking? The function of these data collectors and aggregators is to primarily know where you live and your spending habits. This is not necessarily to pin point you as an individual, but rather to place you in a group with others who share the same demographics so they can sell target audience data for advertising purposes.
It is not an exact science. There are vast inconsistencies for three main reasons:
1. For privacy protection, many of these data trackers do not share information with third-parties so there are holes in the data. This is comforting to most people concerned about privacy.
2. Secondly, the more people change their habits with activities like moving, changing jobs and shopping habits, the harder it is to determine main residencies.
3. Lastly, people who live in tightly packed urban centers, such as Jersey City, are harder to follow and build data than someone living in the suburbs. For example, as you walk through a city, an app may track you as you walk by a store even though you don’t enter the store. On the other hand, in the suburbs, you tend to drive to a location. Living in a multi-family dwelling with ethnic diversity, like an apartment building, is harder to track than living in a single family home.
My favorite streaming music station captures first-hand data of name, age, gender, and zip code when you sign up for the service. They also use third party data services to determine in which demographic you fit.
So, the reason I hear some commercials in Spanish is simple. The demographics of the town in which I live shows only 6.73% Hispanic population, but my wife and I shop frequently in the next town over, which shows a 44.21% Hispanic population. Furthermore, in this town, I shop with loyalty cards in stores like Shop Rite, Target and member club stores in BJ’s and Costco.
So, no problema.
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