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    Ad Age: Holy Grail of Targeting Is Fuel for Privacy Battle

    Ad Age reports on privacy questions over advertisers mixing online and offline data about consumers in order to improve targeted behavioral advertising. (Earlier this month, Wall Street Journal reports on a plan by consumer-research firm Nielsen and digital-marketing firm eXelat to merge online and offline data in order to create more detailed profiles of consumers for targeted behavioral advertising. Last month, the Financial Times reported on a new deal in the United Kingdom between Yahoo search engine and Nectar, a loyalty-card company, that would link online ads to individuals’ offline purchases, raising privacy questions.) Ad Age reports:

    The latest frontier for marketers is taking offline data such as income, credit rating, home value, savings, past purchases, number of children living at home and other data, and merging that with the blooming online data stream.

    The offline data — including extremely sensitive, personally identifiable information — has been used by the direct-marketing industry for decades. But only recently have marketers begun to connect that trove to online behavior. The resulting picture is revolutionary for marketers, but could trigger a rude awakening in the form of regulation now being considered by Congress.

    One example: three-year-old data firm Aperture, a division of Datran Media, which pulls data from offline giants like Experian, Acxiom, and Nielsen’s Claritas to form detailed portraits of individuals on the web, and then combines that with Datran’s massive database of e-mail addresses. The difference between what Aperture is doing and others is that each cookie does represent a real consumer, albeit without personally identifiable information stripped out. Those consumers are thrown into “buckets,” say, men earning $40,000 to $50,000, or other demographics useful for marketers. […]

    But online-data collection is getting some scrutiny from privacy advocates, the media and the Federal Trade Commission. Last week the Wall Street Journal profiled eXelate, an Israeli firm that operates an exchange for data culled from online and offline sources. The company announced a deal with Nielsen’s Claritas, which gives them data from 115 million American households.

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