Data mining is described as any practice of examining large databases in order to generate new information. In advertising, this new information can be used to construct mediums of buyer behavior and product potential. Meaning any company can advertise based off of past purchases, buying habits, income, sight searches, etc… Data brokers are the main collectors and sellers of customer data. This is done by collecting data from both the public and private sectors, but how do data brokers collect info? The following are methods used by brokers to collect data that is then resold to retail stores and other companies around the world:
- Web Browsing (Highest)
- Purchase history
- Online forums (Twitter posts)
- Retail Sales records (offline)
If you are a big company like Facebook, Netflix, or Amazon, data mining creates a lot of opportunity. It presents a countless amount of information that you can use to target a specific market interested and able to buy your products. It allows consumers to focus on advertisements that pertain to their buying behavior sparking either an interest or the final goal, a purchase. With this data, firm’s are finding ways to obtain a competitive advantage in any hostile market.
The legal ramifications of using a consumer’s website history is no more. New updates, or so called “Agreement to terms,” create binding contracts that allow companies to obtain information from existing customers. Basically, they are allowed to take pertinent information about their most reliable customer base and reuse this to help sell products. Also, the new nullification of FCC’s broadband privacy protections has given even more potential for companies to harvest sensitive data about customers in any market. Making internet website history sellable by multiple service providers. However, fairly new, this industry is creating a whirlwind in marketing for many companies allowing for more specific techniques, and quicker returns on advertising finances.