Patchwork of data covers all of us from the cradle to the grave

Months before Eleanor Nagle was born, details about her already had been traded for pennies in the corporate market for consumer information.

So-called data brokers scour through baby furniture and maternity store purchases, social media posts, pregnancy email subscriptions, baby registries and birth records, even purchasing details from photography companies that take in-hospital pictures of newborns. All so they can compile up-to-date, accurate lists of new parents, sorted by due date and including everything from the gender of the baby to the mother’s age and household income, to sell to marketers.

Eleanor’s mother, Callai Nagle, remembers feeling overwhelmed by the barrage of marketing emails and messages she received from companies including Gerber Life Insurance, retailer Babies ‘R’ Us, a cord blood institute and Similac, the infant formula brand. Some arrived even before she broke the news to family and friends that she was expecting her first baby.

“How did they know I was pregnant? How did they have my address? I didn’t give it to them,” says the 26-year-old mother from Oakland, California.

Gerber Life says that it sends out a vast number of mailings to “about everyone in creation about our product”. Similac declined to comment and Babies ‘R’ Us could not be reached.

Throughout Eleanor’s life, dozens, if not hundreds, of companies will track thousands of details about her – everything from the online searches she makes and the products she buys, to maps of her location, whether she marries and her medical conditions. These will all be stitched together to form a profile that reveals the story of her life.

“In isolation, that atom of information [about one person] actually isn’t worth very much,” said Tim Suther, the chief marketing and strategy officer for Acxiom, one of the biggest data brokers with a market capitalisation of $1.6bn. “Where is the value in this? The value is in aggregation.”

While a backlash grows over revelations of the US government’s mass surveillance of phone calls and internet “metadata”, the private sector is quietly pushing ahead in its aggressive, massive collection and trade in people’s information. This unregulated, multibillion-dollar industry grows more tenacious by the day as trackers attempt to feed an insatiable demand by corporations for more information about their customers.

Basic demographic data about people is no longer enough. Companies are demanding detailed dossiers to analyse their aspirations, social circles and financial standing – all in an attempt to profit by predicting and influencing people’s future behaviours.

A 2011 World Economic Forum report described consumer data as “the new ‘oil’” that would emerge as “a new asset class touching all aspects of society”. Most industry executives agree.

The roots of the industry lie in the dusty old direct marketing business. For decades, companies such as Acxiom and Experian assembled details about people by combing through public records, customer surveys, sweepstakes entries and other databases. Marketers would buy lists of customers in order to target mailings and phone calls.

The idea of merging information about a person’s activities online and away from the computer screen has long been controversial. In 2000, for example, the US Federal Trade Commission started an investigation into privacy issues connected to the acquisition of Abacus Direct, which tracked people’s purchases, by DoubleClick, the online advertising company subsequently bought by Google. DoubleClick ultimately agreed not to merge the two companies’ sets of data, deterring others from the practice.

That sentiment gradually faded. Companies have spent the past several years steadily building their digital prowess. Acxiom, for instance, hired digital advertising veteran Scott Howe as its chief executive in 2011 and has since attempted to build a more robust digital business. This bore fruit in recent months as Facebook struck a partnership with Acxiom and rival data company Datalogix to allow marketers to buy ads targeted at people based not just on their posts on the social network, but also on information such as their past purchases away from Facebook.

At the same time, the rise of big data within corporations is spurring companies to use the information they hold for much more than simple ad targeting. Companies are feeding details about consumers into sophisticated algorithms to determine how to best influence and predict their actions.

The data are proving to have a wide range of uses. Experian and other data brokers long have collected data to calculate a credit score. By law, this data remains separate from marketing information.

But that doesn’t stop companies from finding new uses for traditional marketing information. Credit card companies predict a person’s “lifetime value” to determine which offers to show them. Some companies, such as insurance brokers, even calculate when a person is likely to die. Politicians tap the information to understand how to best influence voters.

New York-listed Acxiom, one of the biggest companies in the industry, is gradually shifting its business to provide more analytics beyond basic data gathering. The company, which generated $1.1bn in revenues in the fiscal year ended March 31, compiles information about more than 700m people across the world and sells those details to more than 7,000 clients.

“We’re all learning – in business and in the government – what the uses of that information should actually be,” Tim Suther, chief marketing and strategy officer at Acxiom, says.

Acxiom sells three type of information products: marketing information, directory products based on contact information in published telephone directories and a fraud detection and prevention service. US consumers can access basic information about themselves in the fraud detection product for a fee of $5.

The company is now investing in new data and analytics products, such as its Audience Propensities models that not only track a consumer’s past but also analyse a wide array of information to predict what individuals are likely to do.

The broader trend is worrying to lawmakers, governmental regulators and privacy advocates, who fear that consumers are largely unaware of this mass trade of their personal information, let alone how those details are being used. They fear a world where information about a person’s health, finances, sexual history or other information is used to discriminate against them.

“This lifetime value is a digital scarlet letter,” says Jeff Chester, executive director of the Center for Digital Democracy, which is conducting research into the invasion of privacy tied to online financial marketing, children, mobile, social networks and the pharmaceutical industries. “It tells people whether this person is worth paying attention to. I am worried about it.”

Just as targeting ads to specific customers is useful for marketers, so too is the practice of avoiding other, less valuable customers, some ad executives say.

“Do we penalise people because of lifestyle choices? I don’t think so, but these become possibilities,” says Russell Walker, a professor and risk management expert at Northwestern’s Kellogg School of Management. “There are things that could fall into that sphere that nobody has really thought about.”

This calculator

The Financial Times created this calculator based on the analysis of industry pricing data from a range of sources in the US. Data pricing is cumulative, so the more specific information available about an individual, the more valuable it is to marketers.

This calculator is not comprehensive and does not include pricing details on each of the thousands of bits of information that data brokers track, analyse and sell on individuals.

The Financial Times will not collect, store or share the data users input into the calculator.