MasterCard Spreads Holiday Cheer by Selling All of Your Spending Data

This holiday season, MasterCard wants to give advertisers the greatest gift of all – your personal transaction data. In what looks to be the first scandal of the holiday season, the card company was caught red-handed this week trying to cash in on the holiday spending spree by offering to sell the spending data of its customers to marketing agencies around the country.

As Wired reports, the story first broke when a confidential sales presentation from MasterCard leaked onto the Internet. The presentation, which can be found here, is titled “Leveraging MasterCard Data Insights to Reach Holiday Shoppers.” In it, Senior Vice President Susan Grossman details the various ways marketers can use consumer data to create effective, targeted ads that will convince shoppers to fork over the dough this holiday season.

“When a consumer purchases something in a store and swipes a credit card, we receive information about the date, the time, the amount and the merchant,” says Grossman. She goes on to describe how MasterCard data-mines over 34 billion transactions at millions of different retailers to create a variety of highly specific demographic studies known as Audiences, which are then sold on data retail site BlueKai.

According to Grossman, a company can use the Audiences service to help figure out exactly when, where and how a certain demographic spends its money. Some of the Audience services MasterCard pushes in its presentation include Black Friday shoppers, affluent holiday shoppers, holiday travelers and people who only eat out during the holidays.

In addition to offering these offline data packages, MasterCard also claims it has “proprietary” methods that can help marketing agencies create specific online ads for cardholders as well.

Though this strikes us as kind of an invasion of privacy, MasterCard claims that its Audience service is completely above the table. The company mentions both in an email to Wired and in the presentation itself that “No personally identifiable information is collected, disclosed or used in the analysis and development of MasterCard Audiences.”

But if that’s true, then how does the company plan to develop specific online ads based on offline purchases? Wouldn’t you have to have some sort of personal data in the equation, like a name or an address, to make that possible? It’s not otherwise clear how a sales pitch like this could be explained: “We feel comfortable that when you purchase a top-tier spender Audience, you really are getting the cream of the crop in terms of heavy spenders in a certain category, and that’s who your clients are going to want to reach.”

Unfortunately, even if MasterCard is invading consumer privacy, there’s really nothing consumers can do to stop it. These days, data mining is the driving force behind advertising campaigns. Marketing agencies are willing to shell out big money for shopping data they can use to create targeted ad campaigns, and companies like Amazon and MasterCard are more than happy to provide it. If anything, this is just the first example of a trend that will soon be embraced by every major credit card provider.

But hey, things could be worse, right? At least advertisers can’t track you when you spend with cash … yet.