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Thursday, September 25, 2008

"I know what you did last time you were around"

For those who value privacy over personalized pitches, opting out of online behavioral advertising is challenging enough. While shopping offline, you could get away wearing a ski mask. The customer analysis systems though, will know what to do when they see that.

It does nag to watch the growth in behavioral advertising online, the practice of tracking users in their Web travels in an effort to deliver more relevant ads. But things are getting out of hand – with the kind of high-tech targeting and profiling that's increasingly showing up in the brick-and-mortar retail world.

Get a load of system used by Israel-based Aroma Espresso Bars. Next to the cash register is a digital display. If you order a coffee in the morning, it may pop up an ad for a croissant. Buy a sandwich at lunch, and the screen may suggest a beverage or dessert. What's more, the suggestions can be tied into inventory management; if croissants are running low, that coffee customer may see a muffin promo instead. In the outlets with the system installed, Aroma says, sales of desserts and beverages featured on the screens have increased as much as 68 percent.

Sounds harmless enough -- just an automated version of the sales clerk's usual upselling exercise. It doesn't start to get creepy until the next step. YCD Multimedia, an Israeli company that sells digital display systems, is starting to equip some of its point-of-sale systems with tiny cameras and facial analysis software that can determine a shopper's sex, race and approximate age and choose which ads to display accordingly. All of sudden you have software doing something we like to discourage among humans -- making gross assumptions about individuals based on crude observations and generalized data. Start extrapolating and you find yourself in the middle of another personalization vs. privacy mess. Wait until the systems are able to observe and analyze more of your characteristics as you stand at the register. At the fast-food outlet, when it sees a person of girth filling its viewfinder, will it suggest super-sizing or a salad? At the coffee shop, will an advanced expression analysis tool see that you are sleepy and recommend a double shot?

Sooner or later, retailers are going to want capture facial-recognition information, link it to a purchase history and have their digital display systems greet you by name and pitch you accordingly. Corporate partners start sharing, and the next thing you know large chunks of your personal information are floating around in another huge database.

No way out. Or is there?

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