10/30/2012 05:28 EDT | Updated 03/04/2013 05:02 EST

How Target Predicts Your Pregnancy

A man walks into a Target in Minneapolis.

Coupons in-hand, he demands to see the manager and boy is he angry.

"My daughter got this in the mail!" he says. "She's still in high school, and you're sending her coupons for baby clothes and cribs? Are you trying to encourage her to get pregnant?"

The manager looks at the coupons. They are addressed to the daughter and contain ads for maternity clothing, nursery furniture, etc. The manager apologizes.

A few days later, the manager calls to apologize again. The man says:

"I had a talk with my daughter ... It turns out there's been some activities in my house I haven't been completely aware of. She's due in August. I owe you an apology."

You read correctly. According to the New York Times, a retailer knew that a girl was pregnant before her own father did. You didn't think those loyalty cards were just for a dollar off milk, did you?

Above the waterline...

A revealing trend many years in the making is now coming into public view.

Did you see the report that the mood on Twitter has been shown to predict the rise and fall of the stock market?

How about Facebook's claim that they can predict election results?

Or that Google apparently predicts flu outbreaks more accurately than the US Centers for Disease Control.

What is going on here? The answer: predictive analytics.

With complex statistical techniques, and a quickly expanding universe of data drawn from an increasing number of our behaviours online and offline, a multitude of organizations and institutions are using predictive analytics to do that which has always fascinated and eluded the human race -- predict the future.

The how and the why could fill many, many blog posts, and a simple Google search will produce a ton of information from proponents of the growing analytics industry like IBM and SAS as well as critics. For now, I encourage you to have a look through the following links (after you read the rest of this post of course):

  • This Wired piece about the U.S. National Security Agency's new "spy center" capable of dealing with yottabytes (1024) of data.
  • The Google Flu Trends site -- especially the "How does this work?" section.
  • This Wired piece about Twitter predicting the stock market.
  • A press release about facial recognition software that can find personal data like U.S. social security numbers (Ever noticed cameras in public spaces? Ever uploaded a picture to Facebook?)
  • This NYT piece on Facebook's own facial recognition efforts and this piece on Wall Street's call for Facebook to start making money from their "trove" of data.
  • This article from Daily Tech about police scraping data from mobile phones.

Back to the story...

Two years ago I was teaching a class on the media audience analysis business, when the conversation turned to Facebook. I asked the students to describe some of their experiences online. A female student raised her hand and said:

"The strangest thing happened to me the other day. I broke up with my boyfriend on Monday, and on Tuesday Facebook was advertising Häagen Dazs ice cream on my profile. How did they know I wanted ice cream?" I replied, "Did you change your relationship status from 'In a relationship' to 'Single'?"

In the online space, predictive analytics have a best friend: web tracking. The process of collecting data from as many of your online behaviours as possible, web tracking involves watching where you go online, what you search for, what you post, where you click, what you buy, what you don't buy, etc. Web tracking is taking place on your device right now, whether you're reading this article on your laptop, your desktop, your smartphone or your tablet - if you're online, chances are you're being followed.

As seen in this YouTube clip, a 2010 ABC News report found that a simple visit to what appeared to be a harmless website resulted in the user being followed by nine web-tracking services.

Last year, Max Schrems, a law student from Vienna, requested that Facebook provide all the data they had collected from him since 2008. The dossier they sent was 1,200 pages long -- and that was just his Facebook use. Imagine if he had contacted Google!

The Internet has certainly changed a lot in the last 20 years. In 1993, the now famous cartoon from The New Yorkerhad the caption: "On the Internet, nobody knows you're a dog."

Today, if that same cartoon were to be printed the caption would likely read something like this: "It's the Internet, of course they know you're a dog. They also know your favourite chew toy, pet food, how many times a day you go for a walk, and the name of the poodle at the park you keep sending roses to."*


What's scariest is that the iceberg analogy applies. When you use Gmail you notice ads running at the top and side of your page. You wonder, is Google reading my emails? On Facebook, you do the same. What you're seeing is just the tip of the iceberg.

As a universe of personal information, growing exponentially by the second, expands beneath the surface, industries and governments are rushing to figure out how to benefit from this "trove" of data.

If this reality doesn't bother you, great, at least you've made that decision. On the other hand, if what you've just read concerns you, if you feel your privacy and civil liberties are being threatened, I encourage you to speak out.

One last thing...

It's official, Target is now in Canada. Finally!

I'm reminded of an old public service announcement...

"It's 10 o'clock. Do you know where your children are?"

*Thanks to Arvind Narayanan for this interesting idea.