Casinos, Behavioral Tracking and You

by Brian Blum on September 29, 2009

Harrah'sI was listening to an old episode of one of my favorite NPR shows and podcasts, Radio Lab. The topic was how we choose and it featured a fascinating and highly disturbing story that has relevance to anyone involved in the Internet today.

It turns out that in the world of gambling, the casino chain Harrah’s is the undisputed leader. The reason? All visitors must first join a “loyalty” program. Since signing up grants the gambler a nice credit of a few bucks, no one says no. Once you get your card, you have to insert it in the slot machine whenever you want to play.

What happens next is that Harrah’s tracks everything you do at the slots – how long you stay, what machines you play, how much you spend. By crunching the numbers, Harrah’s knows your specific pain threshold and at what point you’ll have lost enough to quit.

Harrah’s staff in the back room tracks everything and when the computer flags someone coming close to their limit, a member of Harrah’s floor staff approaches the soon-to-give-up gambler and intervenes, offering a free steak dinner, or another $15 credit or even tickets to a show that evening. The result: the gambler keeps gambling.

When I first heard this, I was appalled. How could a casino be so manipulative? (Well, they’re already manipulative, but this seemed over the top.) And how could gamblers be so gullible as to give the casino access to their personal behaviors.

But then I realized that what Harrah’s is doing is really no different than what’s happening online today. Advertisers using behavioral targeting are tracking your every move on the web – which sites you linger on, how long you stay in one place, what links you click on. The advertiser then knows to serve up the right ad at the right time and place.

Let’s say you just left and are now at The New York Times. If the two companies both use the same tracking service, it’s easy for The Times to serve up an auto ad even though you’ve long since left

And how about mobile GPS services? We give up our privacy so that we can receive customized ads and coupons for restaurants in the vicinity of where we’re walking or driving. We see that as valuable – hey, I just got 10% off – but aren’t you being manipulated in exactly the same way as at the casino? Minority Report isn’t so far away.

I’m not saying that we should turn off our cookies – often times those ads can be valuable – and in any case, it’s largely impractical given the way the Internet operates. But we should be aware of what’s happening around us and make sure that we know when we’ve given our permission to be manipulated.

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