Your phone knows where you are. So do marketers

Sam Harnett Sep 30, 2014

Your phone knows where you are. So do marketers

Sam Harnett Sep 30, 2014

People who buy used trucks rarely go to toy stores. Customers of KFC also frequent Home Depot, Nissan dealerships and museums. Latinos are 43 percent less likely to shop at Whole Foods than the average person.

These are conclusions made by the consumer behavior analytics company PlaceIQ, derived from tracking people on their smartphones.

Over the years, companies have developed surveys to gather data on people inside their homes — things like demographics, income and automobile ownership. But the outside world has remained largely a black box. Now, smartphones allow companies like PlaceIQ to not only uncover what people do in the real world, but also connect it back to traditional data gathered from homes.

PlaceIQ CEO Duncan McCall says: “We use location as foundation to essentially hang data from.”

In other words, location becomes the glue holding together a rich digital profile.

To better track mobile users, PlaceIQ has built a new map of America. The company has broken down the country into 100-meter-by-100-meter tiles. Inside each one, PlaceIQ notes where mobile users go and what they do. “We can see their journey across our map of the world,” McCall says, “and now we can build very rich behavioral profiles.”

The company can tell who shops at Wal-Mart frequently, who travels for business, who likes fine dining or who works a particular job. Since PlaceIQ can see where mobile users live, it can tie this real-world behavior to traditionally gathered info like demographics, income and even TV-viewing habits. McCall says linking all this data lets companies see relationships. They can connect information — PlaceIQ gets TV data from the company Rentrack — with their physical behaviors in the world. That means companies can start to predict what people will do based on something like what they watch. And that is a powerful tool for advertisers. 

So, in case you’re wondering, does PlaceIQ know exactly who you are? No, McCall says. The data is currently anonymous, and furthermore, McCall says he doesn’t even want to know your identity. That would raise privacy concerns, and, well, it’s not the point. With a rich digital profile, PlaceIQ doesn’t need to know who you are in order to predict what you’ll do and help companies sell you things.

Sanjog Misra is a professor of marketing at the UCLA Anderson School of Management. He says digital data “is going to change the way we market our products.” It will alter things like how companies develop products and display them in stores. Companies can now send personalized ads to individual users at an exact time and place. For instance, Misra says companies may advertise to customers when they are entering a supermarket but not while they are sitting at home.

Advertisers have been dreaming of individually tailored, one-to-one marketing for years. The ability to know exactly where you are is even better than they hoped.  

But according to Jeffery Chester, “It has a very, very dark side.” Chester is with the Center for Digital Democracy. He says collecting all this data is an invasion of privacy.  And there’s another problem, he says — one that is less obvious and even more alarming: discrimination.

Chester says this kind of hyperlocal behavioral analysis allows for a new form of redlining. Chester says customers won’t be treated differently because of where they live, but instead because of their digital data. Chester says digital data is already being used to determine how we are treated — whether we get perks like coupon codes and free shipping, or if we have to pay full price. In the future, who knows what it will impact, he says — maybe credit card rates and loan accessibility.

Chester wonders if this is the future we would like to have. “Do we want to live in a society where every movement we make, every decision we embrace is collected and analyzed and decisions are made about it?”

Well, we do give apps the right to track us. We can stop them by turning off the location services feature on our phones. But without it, some apps won’t work.  

Duncan McCall from PlaceIQ says it’s foolish to try to hide from tech. He says we cannot avoid the potential threats of innovation by “trying to play whack-a-mole with technology, because you’ll always lose that, because it will always evolve.”  

McCall and Chester do agree on one thing: The only way to prevent discrimination and control our privacy is through regulation.

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