Who Do Online Advertisers Think You Are?

Not long ago, I decided to test how much privacy I have online. I cleared the cookies, the bits of code that Web sites leave on my computer to track what I browse and buy, from my two Internet browsers, Safari and Firefox. Then, with my digital past superficially erased, I set out to create two new identities: Democratic Jeff and Republican Jeff.
Safari became the home of Democratic Jeff. I started by spending time on Barack Obama’s re-election Web site and then visited some travel, car and shopping sites to search for flights to Los Angeles, Volvos and Birkenstocks. On Firefox, as Republican Jeff, I went to Mitt Romney’s site and then searched for Cadillacs, flights to Hawaii and diamond rings.
Having created my new digital identities as heavy-handedly as possible, I returned to my usual Web sites. At first, the ads on my favorite Washington neighborhood blog, the Prince of Petworth, were the same on both browsers. But less than two days later, an ad for Mitt Romney suddenly appeared next to a story I was reading on Firefox about Gore Vidal’s burial. When I opened that page on Safari, the ad in the exact same spot was for Catholic University’s master’s program in human resources management.
How did Republican Jeff and Democratic Jeff end up seeing entirely different ads? The answer is real-time bidding, a technology that’s transforming advertising, politics, news and the way we live online. Advertisers compete in an auction for the opportunity to send ads to individual consumers. Each time a company buys access to me, it can bombard me with an ad that will follow me no matter where I show up on the Web.
To dig deeper into my new identities, I visited the Web site of BlueKai, one of the leading online data aggregators. The company’s software enables its customers to sort consumers into 30,000 market segments like “light spenders” and “safety-net seniors,” and this fine-grained categorization helps make real-time bidding possible. According to BlueKai, Republican Jeff is someone who makes between $60,000 and $74,999 a year, lives in Portland, Me., is interested in luxury cars, celebrities and TV, may have bought a cruise ticket, is an ideal candidate to take out a mortgage and a “midscale thrift spender.” Democratic Jeff is someone who lives in Los Angeles, Long Beach or Santa Ana, runs a large company with more than 5,001 employees and cares about advertising and marketing. Neither of these profiles is accurate. Nevertheless, the pigeonholing of Republican Jeff and Democratic Jeff represents our digital future.
Google and Facebook have each been expanding their use of real-time bidding. In June, Facebook announced that it would introduce a new service called Facebook Exchange, which will enable advertisers to send promotions for Spanish hotels, say, to Facebook users who have searched for trips to Spain.
Should we worry about ads aimed specifically at us everywhere we go on the Web and, increasingly, on our mobile devices too? Yes, and not just because the ads can be invasive and annoying. Real-time bidding also makes the online marketplace less of an even playing field, allowing companies to send loyalty points or discounts — or price increases — to individuals based on their perceived spending power. The travel site Orbitz, after learning that Mac users spend 30 percent more on hotel rooms than P.C. users, has started to send Mac users ads for hotels that are 11 percent more expensive than the ones that P.C. users are seeing, according to a recent Wall Street Journal article.
Of course, many consumer breaks are unfair, and we readily accept that the cost of airline tickets, for example, varies from one passenger to another on the same flight. But our consumer profiles are beginning to define us in all of our online interactions, and a result may be that we get different prices at the mall — or different news articles and campaign ads on our mobile devices — based on a hidden auction system that we’re unable to alter or control.
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