Visa, Mastercard Explored Online Targeting Using Credit-Card Data

Both Mastercard and Visa have explored ways to use data about people'scredit-card buying activity to target online ads to them, according to reports in The Wall Street Journal.
Neither company is currently able to offer marketers data that ties a consumer's identity and spending history to an online profile. Last spring, Mastercard floated to ad executives the idea of developing such capabilities, according to the WSJ. And Visa has filed applications for at least eight patents covering technology to do such identity matching.
The two companies each process tens of billions of credit-card transactions per year but do not link them with individual identities. Mastercard says it is not now planning any such individual targeting -- it's "put aside" that idea, a Mastercard spokesperson told the WSJ, because of restrictions over how financial-services companies can use customer data. As Mastercard's plans have evolved since those "exploratory conversations" earlier this year, it's now looking to sell marketers aggregated data based on "consumer segments," the WSJ reports.
Visa merely notes that the company does not discuss its intellectual property strategies.
If Visa were to tie together cardholder purchase data with online activity, it would be the first time that this matching had been done. Such detailed profiles would be of high value to marketers; and they would surely draw the ire of privacy advocates and the gimlet-eyed scrutiny of government regulators.
The last time any company was in a position to marry identifying offline purchase data with information about Web activity was when DoubleClick bought Abacus Direct Corp. in 1999. In that long-ago era, at a time when DoubleClick was just beginning to pioneer the practice of cookie-based third-party advertising, a widespread public outcry convinced DoubleClick to shelve plans to merge its online and offline databases. A federal lawsuit was filed, aspiring to class-action status, alleging that DoubleClick had violated the ECPA, the Wiretap Act, and the Computer Fraud and Abuse Act; it was dismissed a year later. After DoubleClick was taken over by a private equity firm in 2005, it sold Abacus at a loss of $1.2 billion late in 2006.
Before Google was allowed to acquire DoubleClick in 2007, it had to answer questions about the possible combination of its own stores of search and clickstream data with DoubleClick's customer profiles. Abacus was out of the picture, so the question was not even as sensitive as one of combining online and offline data. Google CEO Eric Schmidt said at the time: "It's a legitimate concern. If we lose our advertisers' support or end-user support, the company goes kaput."
Years have passed; a new generation is coming up that has fewer qualms about sharing in the online world and is at home with the idea of an advertising-supported Internet. Perhaps the possibility of giving marketers access to "a person's budget, where they shop, what they buy, and how they spend their time" (in the words of The Wall Street Journal) would not cause the uproar it did 12 years ago. On the other hand, greater awareness among the general public about how the online advertising world operates is causing widespread privacy concerns to take root.
What do you think? Is the time right for merging offline and online customer data for more precise targeting?
— Keith Dawson , Senior Editor, The CMO Site
The CMO Site is an executive social network that provides CMOs and other marketing executives from the world's leading organizations with a real-time, online venue where they can convene to discuss how they're delivering on the most critical marketing priorities. Join us!