Free Data and Goliath by Bruce Schneier Page B

expensive
     form of personal data collection, and only makes sense when lots of money is at stake:
     issuing credit cards, allowing someone to lease an apartment, and so on.
    The fourth stream was from government. It consisted of various public records: birth
     and death certificates, driver’s license records, voter registration records, various
     permits and licenses, and so on. Companies have increasingly been able to download,
     or purchase, this public data.
    Credit bureaus and direct marketing companies combined these four streams to become
     modern day data brokers like Acxiom. These companies buy your personal data from companies
     you do business with, combine it with other information about you, and sell it to
     companies that want to know more about you. And they’ve ridden the tides of computerization.
     The more data you produce, the more they collect and the more accurately they profile
     you.
    The breadth and depth of information that data brokers have is astonishing. They collect
     demographic information: names, addresses, telephone numbers, e-mail addresses, gender,
     age, marital status, presence and ages of children in household, education level,
     profession, income level, political affiliation, cars driven, and information about
     homes and other property. They collect lists of things you’ve purchased, when you’ve
     purchased them, and how you paid for them. They keep track of deaths, divorces, and
     diseases in your family. They collect everything about what you do on the Internet.
    Data brokers use your data to sort you into various marketable categories. Want lists
     of people who fall into the category of “potential inheritor” or “adult with senior
     parent,” or addresses of households with a “diabetic focus” or “senior needs”? Acxiom
     can provide you with that. InfoUSA has sold lists of “suffering seniors” and gullible
     seniors. In 2011, the data broker Teletrack sold lists of people who had applied for
     nontraditional credit products like payday loans to companies who wanted to target
     them for bad financial deals. In 2012, the broker Equifax sold lists of people who
     were late on their mortgage payments to a discount loan company. Because this was
     financial information, both brokers were fined by the FTC for their actions. Almost
     everything else is fair game.
    PERSONALIZED ADVERTISING
    We use systems that spy on us in exchange for services. It’s just the way the Internet
     works these days. If something is free, you’re not the customer; you’re the product.
     Or, as Al Gore said, “We have a stalker economy.”
    Advertising has always suffered from the problem that most people who see an advertisement
     don’t care about the product. A beer ad is wasted on someone who doesn’t drink beer.
     A car advertisement is largely wasted unless you are in the market for a car. But
     because it was impossible to target ads individually, companies did the best they
     could with the data they had. They segmented people geographically, and guessed which
     magazines and TV shows would best attract their potential customers. They tracked
     populations as a whole, or in large demographic groups. It was very inefficient. There’s
     a famous quote, most reliably traced to the retail magnate John Wanamaker: “I know
     half of my advertising is wasted. The trouble is, I don’t know which half.”
    Ubiquitous surveillance has the potential to change that. If you know exactly who
     wants to buy a lawn mower or is worried about erectile dysfunction, you can target
     your advertising to the right person at the right time, eliminating waste. (In fact,
     a national lawn care company uses aerial photography to better market its services.)
     And if you know the details about that potential customer—what sorts of arguments
     would be most persuasive, what sorts of images he finds most appealing—your advertising
     can be even more effective.
    This also works in political