I'm continuing to see important articles as our journalists shine light on the tech companies. This Bloomberg article reveals a previously secret relationship between Google and Mastercard. It is important also as a reminder that the intense focus on Facebook is misguided - as other big tech companies engage in similar practices.
I'd recommend reading the article in full. Here I'd like to bring out a few key observations for you to chew on.
1) The payment processors have become part of the surveillance network that has been constructed by the tech industry. In the past (when I was working in that industry almost two decades ago), payment processors played the role of toll booths that happened to be a very lucrative business collecting cash as the transactions stream through. Users' purchase data were safeguarded and remained private.
Sometime in the last 5 to 10 years, the payment processors decided that the purchase data is a goldmine. They now monetize this data through mostly secret deals with all kinds of companies. Most card-users are not aware that their purchases are being disclosed to third parties.
An analogy is Gmail and other web-based email systems. Gmail in particular pioneered the concept of reading users' emails to extract information. It is now known that Gmail allows selected partners to extract all kinds of information from emails, such as shopping receipts, boarding passes, etc. We knew this because of the scandal about the Unroll.me service in which the service provider extracted shopping information from emails under the pretense of finding email lists from which users can be unsubscribed from.
2) Next time reporters hear the tech companies talk about "anonymized" data or hiding of "personally identifiable information", they really need to press the companies for details. Look out for clever word play. It is simply not possible to get value from these datasets without access to information about each person.
In this instance, Google is merging two datasets, the clickstream (what ads people clicked on) and Mastercard purchases, with the goal of claiming that person A purchased item X after clicking on some Google ad. The Mastercard data contain your card number, and/or your name. The clickstream data contain one or more of the following: your Google "cookie", your Google user name, or your email. You can't merge the datasets unless there is a common field. In this case, it will most likely be your name or email address. How could that be "anonymous"? Good question if you're asking it. And the reporters should be pushing on this point.
Further, if the data are fully anonymized, the potential utility of the data is much lower, and the price marketers are willing to pay for them is much lower. If I don't have your name and address, how can I send you a piece of junk mail?
3) While the article points out the violation of privacy of this partnership, it inadvertently legitimizes the highly dubious science behind matching the clickstream data and the Mastercard purchase data. The reporter described the program as "powerful" and "potent" but should have talked to third-party experts to understand this science better. I'll just list several major problems with this approach:
- As far as I know, Mastercard does not have line-item level details on our purchases. It may know that you spent $500 at Best Buy, but it doesn't know that that total includes an iPad and a TV, for example. So if the ad shows a TV, how does Google know that Best Buy purchase included a TV? The reporter claims that Google knows that someone bought "red lipstick" with her Mastercard. I find that dubious.
- Do you remember what ads you clicked on 30 days ago? 15 days ago? 5 days ago? This system counts any purchases made on Mastercard as long as 30 days ago as "caused" by an ad click.
- Does Google know what these users are doing on non-Google websites? For example, does Google know that the user who saw a Google ad 10 days ago also saw a Facebook ad for the same product 3 days ago?
- Does Google know anything about the users' interactions offline? For example, the user who clicked on the Google ad 10 days ago may have heard a radio ad, seen a TV ad, talked to a friend about the product, been handed a flyer at the mall, saw a piece of direct mail, etc.
The reporter suggested that Facebook, the other digital advertising behemoth, is also pursuing similar deals with payment processors. If Facebook were to adopt this same method for measuring ad performance, then both Facebook and Google would have claimed credit for the same purchase, as each would have matched that purchase to its own clickstream data. One solution to this particular issue is to merge the Facebook and Google data, which simply merges two surveillance networks into one extra-large surveillance network.
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