Networks to use targeted ads for credit card users

Consumers' online browsing habits have long been used to create targeted advertisements specifically for them.

But now the world's two largest credit and debit card payment processing companies are working to do the same with the information gathered any time a consumer takes oncredit card debt for purchases at brick-and-mortar stores, according to a report from the Wall Street Journal. Visa and MasterCard are working, separately, to develop technology that would allow them to instantly transfer consumers' real-world purchasing data to advertisers, which would then use that information to push specific types of ads to the cardholders within a short period of time.

For example, the ideal scenario for this type of system would be to send weight loss ads to consumers within minutes of their using their debit or credit card to purchase fast food, the report said. However, no such system exists at this juncture, and targeted online advertising is currently only tied to web browsing habits, not purchases at brick-and-mortar stores.

"There is a lot of data out there, but there is not a lot of data based on actual purchase transactions," Susan Grossman, group head of media solutions at MasterCard Advisors, recently told the newspaper. "We are taking it a level deeper…it is a much more precise targeting mechanism."

Currently, MasterCard doesn't collect information such as consumers' names or addresses when they process a purchase, which would make it difficult to overhaul their entire system, the report said. However, it has already begun to do so in an effort to better create consumer profiles. Meanwhile, Visa's proposed system would use aggregate cardholder buying histories to create targeted ads while still keeping the individual consumer's information anonymous. At most, ads would only be able to be targeted by area, rather than tailored to an individual. However, it would also use data on consumers beyond their credit card purchases – such as information posted on social networks, search engines and the like – to beef up these profiles.

Privacy advocates have been trying to reduce the amount of information companies that specialize in targeted advertisements can use to create consumer profiles, as well as limit the access these companies have to user browsing habits. One such initiative is the creation of an online "do not track" service that allows consumers to opt out of these services.