Big Brother Part 2: The profile you can't update

When data profiling is everywhere, where will you go if there's a mistake?

That was the question from Joe Turow, a professor at University of Pennsylvania who kindly called in re our recent BusinessWeek column The Real Threat to Google. Joe was intrigued by the report that Microsoft and comScore and other companies are using offline data to build ever-deepening profiles of consumers. Microsoft, for example, has a patent application to combine TV habits, cell phone locations, and credit card purchases to tailor ad messaging. So Joe asked: How can consumers check their own marketing profiles?

Well, you can't.

A good analogy is financial services, which 30 years ago had siloed data systems about consumers. Eventually banks and lenders realized it would be wise to share data so they could manage the risk of giving consumers loans, and after 9/11, data profiling really picked up. Today, every consumer in the U.S. has a FICO score that ranks your credit risk, similar to SAT test results; and most shoppers realize that if they have a bad credit history, they may pay a higher interest rate or not get a loan at all.

The point: You pay different prices to borrow money, but that's OK, because you understand you have a credit score -- and you can check it for accuracy for $20 online.

Ah, but marketing. Every business in the world is building customer profiles, none of them are consistent, and that data is used to not only tailor messaging but to charge you different prices. Don't be shocked; coupons do the same thing by offering some people discounts while others pay full boat. Airlines and theaters and hotels and home utilities and magazines have charged different rates for the same exact service for decades.

But data profiling will soon make differential pricing commonplace. The guy who must have the iPhone will pay $500 and the woman who needs to be convinced will pay $200 -- but it won't be in two separate years; it will be in the same store at the same time, based on the hidden profile.

Joe Turow suggests a central marketing data clearinghouse, similar to FICO credit scores; competition among marketers will make that type of data pooling difficult. Until then, expect marketing to get personal -- and try to figure out what to do when a database calls you Dad instead of Sis.