Some of us may be familiar with George Orwell’s dystopian novel, “1984,” where Big Brother controls the populace through a pervasive surveillance network of microphones and the use of extreme psychological manipulation and physical control. Many more of us are familiar with the movie “Minority Report,” where Tom Cruise’s character works to evade the video surveillance network by hunting down a rogue doctor and forcing him to replace his eyes to avoid the eye scanners that are as ubiquitous in this time as surveillance cameras are today. While our police forces do not have mutant precogs able to predict the future—at least as far as we know—the movie still prognosticates a number of techniques currently employed by some of our largest tech companies.

A famous quote from a movie nearly half a century ago is “Follow the money.” It represents a cautionary tale today with regard to our large tech companies providing “free” services to all of us. A popular saying is that if we are not paying for a service, then we are the service. In particular, our data is the service that is being used directly or resold to pay for web services like Google search and email, Facebook, Twitter, and others that we enjoy for free. This becomes all too apparent when we reference buying a new car in one of our emails, tweets or online searches, or click on a sponsored post in Facebook and then note that for the next week, many of the ads and sponsored posts on the websites we frequent are about buying a new car, including finance and insurance companies.

This process is referred to as target marketing and is the go-to method for most digital marketing campaigns using social media. The concept is very simple. Rather than advertise to everybody, focus instead on those of us who are most likely to buy the product or service. For a simple old school analogy, imagine that you sell high-end air conditioner installations for homes and want to mail out 1,000 flyers. It would make sense to mail those flyers in Florida rather than in Maine, and more sense to mail them to homeowners rather than renters, and even more sense to mail to those whose homes are worth more than $550,000.

At this point you may be worried that there is this grand database with your name attached to all of this information that companies can access to find you when they want to sell you something. Your concern is well-placed because there are numerous databases storing all sorts of data about you—all gathered from your online activity.

For many companies like Facebook, that data sits in-house and is tied to your profile. Facebook doesn’t sell your information directly. They simply sell your eyes, or more specifically, the sponsored posts that appear when you visit its website. You may have noticed that, in the past, when you have taken up a new interest or hobby and used Facebook to search for information or joined groups about that topic, more and more sponsored posts appeared on that topic. The more you click, the more you get.
Companies using social media marketing campaigns are extremely sophisticated now and will test the success of a given ad in front of a number of demographically diverse groups. Evaluating the efficacy of the ad across these groups, the company will identify the group that responds best to the ad. They can then refine that technique even more by breaking this group into even smaller demographic groups and testing them to increase the rate of return on their ad budget.

Interestingly, this demographic information can be used for more than just trying to sell us something. In the run up to the 2016 presidential election, the Trump campaign used a huge database called “Project Alamo.” It was rich with voter information and used to identify and target specific groups of Hillary Clinton voters on Facebook. The campaign then purchased media ads that would discourage them from turning out to vote on Election Day. Many attribute—at least in part—this use of social media and targeted marketing to Donald Trump’s close wins in a few key states. An important point here is that most people in the United States never even saw one of these ads. The campaign only paid to show the ads to those that were most likely to be influenced by them.

The recent Reddit, GameStop, and Robinhood debacle exposed the fact that retail brokerage houses sell our buy/sell transactions, known as order flow data, to various hedge funds who use it to track and predict new trends. The hedge funds then place their bets based on the trends this data reveals. Note that this is all perfectly legal. You give them permission when you create an account and accept the user agreement—although you may have missed that when you read the agreement. You do read those agreements before clicking, right?

As humans, we are very predictable, making us vulnerable to a small marketing nudge from a company. As an example, let’s assume that you have not turned off Facebook’s Location Tracking Service (see below). Facebook knows that on your daily commute you generally use the same route, passing the same restaurants every day. Facebook also knows that before you leave the office, you bring up its website or app and quickly scroll for fresh posts from friends and family. A few sponsored ads for the Olive Garden that is on your route home and you find yourself with some hot seafood alfredo on the seat next to you.

The takeaway is that all of these services, and many more, gather data from us on a regular basis affecting our online experience directly. It is important that we know what data is gathered and understand how it is being used. Facebook, Google, and the other services have interfaces that allow us to take control and we should all be taking advantage of those settings, ensuring that we only share data that we want shared.

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John Velis is an instructor in the CIT Developer program at NMC.