How accurate is the data you're buying from the big data brokers out there?
Our podcast host Tod Maffin spoke recently with Arnaud De Bruyn. He and his colleagues recently published an article in the Journal of Marketing Science called “How to Estimate Consumer Characteristics from Aggregate Data.”
And he told Tod — despite what your might hear in sales calls from the huge data brokerages — much of their data is just incorrect.
Dr. De Bruyn: When you go talk to [data brokers like] Experian, or Acxiom, or LiveRamp, they claim that they have a lot of information about everybody. But actually, it's like Swiss cheese. There is a lot of holes in their database. The way they insert the information they don't have about [consumers] is that they take whatever information they have, and then based on that information, they assign [them] to a group of customers in terms of socio demographics, or customer habits or whatever.
Tod: So this would be like if they have a gap for my age, for instance, they might look at the first name “Tod” and say, well,” Tod” was more popular in the 70s than it was in the 2000s. And it would also assign me as male.
Dr. De Bruyn: Exactly. They're going to say, We don't know Tod's age, but we're going to infer it based on his first name. We don't know Tod's income, but we can based on his postal code. In a study from some colleagues of ours, they took customers about whom they knew everything, and then asked for their profiles from 19 data brokers. And some profiles were completely wrong.
For instance, in one case, when they tried to guess the gender of those customers, they were no better than chance.
Tod: Wow.
Listen to the full interview below:
We reached out to all three of the data brokers mentioned for their comment.
- Liveramp asked for more information, then told us they wouldn't comment.
- Acxiom, too, asked for more information, then didn't get back to us after that by deadline
- Experian never responded to our initial email