Although much has been written about behavioral targeting (BT)—both as the “Holy Grail” of online marketing that brings advertisers closer to the “one-to-one” paradigm and, correspondingly, as a profound threat to user privacy—comparatively little attention has been paid to the role that BT has played in the current economy, either in the economic downturn in general or in the mortgage crisis in particular. According to data from PriceWaterhouseCoopers and the Interactive Advertising Bureau, financial services were the highest-spending category in online advertising in 2007, accounting for some 15 to 20 percent of annual revenues in the U.S.^[1] And there is no shortage of examples of invasive online marketing campaigns for various financial products, including mortgage lead-generation sites that target and collect information about prospective customers:

• According to a 2007 study by Forrester Research, over 70 percent of those who sought mortgage information online visited a lead-generation site, such as LendingTree.com, which has facilitated more than 20 million loan requests and $152 billion in closed loan transactions over the past decade.^[2]

• Intermark Media, a marketing agency that “represents some of the largest debt consolidation and mortgage lenders in the country,” turns to Targusinfo for its lead-generation needs. “With the largest repository of US offline consumer information,” the company declares, “Targusinfo is uniquely positioned to take online targeting to the next level…. Its data repository is updated ten times daily and incorporates millions of data points across more than 100 dynamically changing data sources.”^[3]

• Equifax’s “TargetPoint Acquisition identifies consumers that have recent credit activity within their credit file that indicates an improved likelihood” of interest in loan products such as mortgages, with “22 event-based triggers” to help Eqifax clients “zero in on credit-active consumers.”^[4] TargetPoint Acquisitions also “utilizes advanced profiling techniques to identify consumer prospect populations with a demonstrated statistical propensity to acquire new credit.”^[5]

• With “the nation’s most comprehensive and up-to-date transaction, credit, demographic and behavioral databases,” Intellidyn Corporation offers its financial service clients a wide range of analytic, customer profiling and behavioral targeting services, promising “a 360° view of each customer.”^[6] Mining the “freshest, widest and deepest data sources, exploring integrated views of demographic, lifestyle, behavior, credit and purchase behavior,” the company enables clients to target “down to the most ‘atomic’ level,” providing up to 1500 unique characteristics per customer record from which to choose.^[7]

• “Using web analytics,” boasts online marketing service provider Coremetrics, “businesses can clearly see a customer’s path from an email opened to an online loan application, and everything browsed in-between…. Coremetrics Online Analytics provides the most accurate and complete record of visitor behavior—capturing every click of every visitor over time, and storing them in Cormetrics’ LIVE (Lifetime Individual Visitor Experience) Profiles secure database. As a result, marketers can build a comprehensive and accurate record of online visitor behavior—a record that connects visitor behavior over time, so they can see all the marketing interactions each visitor has with the company.”^[8]

• Lightspeed Research promises marketers a “full wallet view across customers’ many financial services relationships,” providing “unparalleled insight into consumers’ use of credit, debit, banking and alternative payment products. We passively gather information from their financial accounts and merge it with third-party behavioral datasets, survey-based attitudinal insights, and industry expertise.”^[9]

Despite the current economic woes, use of the Internet for financial transactions has actually increased over the past year. As the April 2009 “comScore State of Online Banking” report reveals, “the number of online banking customers continued to grow strongly in 2008 despite the turbulent financial environment. The growth was fueled by banks’ aggressive customer acquisition strategies and heightened financial interest among online banking customers wanting to keep a closer eye on their personal finances.”^[10]

Unfortunately, marketers are keeping an even closer eye on these consumers, whose increased reliance on the internet for all manner of activities—including financial transactions of a highly confidential nature—make them all the more vulnerable. Clearly, the time has come for heightened regulatory scrutiny of the online financial environment, to protect consumers from the most egregious tracking and targeting practices.

If privacy rights are to be preserved in the digital era, behavioral targeting and other invasive advertising techniques must be offered strictly on an “opt-in” basis. Consumers, in other words, must be clearly informed of the full extent of online data collection, and then enabled to determine for themselves what details of their private affairs can be collected in any given marketing campaign, and the uses to which that data can be put. Industry self-regulation, it is clear, has failed. Thus federal laws are now required to ensure that individual consumers and citizens—rather than the advertising industry—can control their personal information in the digital era.

^[1] Stefanie Olsen, “Lending Companies Reduce Online Advertising,” CNet News, 27 Feb. 2008, http://news.cnet.com/Lending-companies-reduce-online-advertising/2100-1024_3-6232226.html (viewed 1 June 2009).

^[2] William Launder, “New Discipline for Lead Generators From Markets and Regulators,” American Banker, 21 May 2007. “LendingTree Reaches New Milestone: 20 Million Customer Loan Requests,” press release, 5 Sept. 2006. http://www.lendingtree.com/stmrc/twentymillion.asp

^[3] “Success Story: Intermark Media,” Targusinfo.com, http://www.targusinfo.com/about/customers/casestudy01300808.aspx. Targusinfo, “Taking Online Targeting to the Next Level,” Mar. 2009, http://marketing.targusinfo.com/AdAdvisorLearningCenter.html (viewed 22 May 2009).

^[4] “Equifax Intelligence: TargetPoint Acquisition,” http://www.equifaxmarketingservices.com/targetpoint.htm (viewed 1 June 2009).

^[5] “Equifax Intelligence: TargetPoint Cross-Sell,” http://www.equifaxmarketingservices.com/pdfs/TargetPoint-Cross-Sell-F06.pdf (viewed 1 June 2009).

^[6] “Intellidyn Helps Mortgage Lenders Target New GSE and FHA Expanded Loan Limit Homeowner Prospects,” press release, 4 Mar. 2008, http://www.intellidyn.com/company/news/pr_030408.html (viewed 1 June 2009).

^[7] http://www.intellidyn.com/company/ (Viewed on August 6, 2008)

^[8] Coremetrics, "Optimizing Marketing Spend of Financial Services: Leveraging Analytics in Marketing Budget Allocation." http://measure.coremetrics.com/corem/getform/reg/wp_financial_services (registration required).

^[9] Lightspeed Research, Financial Services Brochure, http://www2.lightspeedresearch.com/uploads/Financial_Services_Brochure.pdf (viewed 22 May 2009).

^[10] comScore, “Number of U.S. Online Banking Customers Continues to Grow Despite Challenging Financial Environment,” 21 Apr. 2009, http://www.comscore.com/Press_Events/Press_Releases/2009/4/2009_State_of_Online_Banking_Report (viewed 21 May 2009).