Last updated: December 12, 2012 9:59 pm

Advertising gets the power of intimacy

A married couple sit in their living room, arguing about the text messages she keeps receiving from an ex-boyfriend. The television, playing in the background, listens in on their conversation, detects that they are fighting and automatically selects an advertisement about a local marriage therapist for the next commercial break.

This futuristic vision – outlined in a Verizon patent application published last month – is eerily similar to the two-way telescreens that monitor citizens in George Orwell’s 1984. But the idea is far from science fiction.

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Rather, it is within the realms of what is technologically possible today, and is just one version of how some of the world’s most pioneering media and marketing companies discuss using the rich profiles they are amassing about individuals. For marketers, the fast-growing business of tracking intimate details about consumers’ lives presents unprecedented opportunity. Lawmakers, federal regulators and privacy advocates, meanwhile, increasingly worry it is leading to a “database of ruin”.

“I am concerned that the rich profiles being created about consumers can be used to harm them at work and in their financial lives,” Julie Brill, a commissioner with the US Federal Trade Commission, said last week. “I’m equally concerned that consumers are unaware of this data collection and use activity or the companies that engage in it, and so have very little opportunity to exercise any current rights they may have to opt out, access or correct this data.”

Concerned by what information is being collected about individuals and how it is being used, lawmakers and regulators are stepping up their scrutiny of the so-called consumer data broker industry. They also are pushing for stricter guidelines to protect both children’s and adult’s privacy in the digital age.

Some of the world’s largest data brokers, including Acxiom, Experian and Equifax, are being called to Washington on Thursday to participate in a congressional inquiry about how their multi-billion-dollar industry handles consumers’ personal information. The US Senate Commerce Committee has launched a similar investigation.

These corporations – with names most people have never heard of – revealed in letters to lawmakers that they track everything from a person’s religious affiliation to their political leanings.

They collect data on household incomes, public postings on social media and shopping activity. They know the type of credit card in a person’s wallet and whether they have expressed concerns about health conditions such as diabetes or arthritis.

“The data brokers’ responses offer only a glimpse of the practices of an industry that has operated in the shadows for years,” the group of lawmakers said in a joint statement.

Some marketers fear strict regulation could stifle business.

Others argue that an industry operating with more transparency will allow them to explore new business models that involve personalising media and marketing messages to the benefit of consumers.

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