How many people are there in Acxiom's storage?
It's hard to hide if you're in the United States. Pretty much everyone's in there. Even your birth records, in most cases, get in there. So really from birth, pretty much everybody's going to be in the Acxiom database.
What do you do with all this?
Their core business has been to sell marketing lists for people who want to market. And so if you're a company, a bank, a retailer, what you would do is say you want left-handed people of a certain ethnic group, and they're going to be able to do a list for you that will then show what people fit into that category.
If you're a marketer, if you're trying to sell and you just sell to 30 million Americans, you pay a certain price per person. But if it's exactly the sort of person you care about, [you're] willing to pay a lot more for that list, and Acxiom's business is trying to enrich the list, trying to enrich the information. And that will enrich Acxiom and will enrich the marketer. That's the deal: They're trying to sell.
How narrow can you get with the data they have on people?
You can get marketing lists of Hispanics who make between $20,000 and $40,000 who are U.S. citizens. You can get marketing lists of people who suffer from incontinence and had bought those kinds of products in the pharmacy. You can get all sorts of things that can be very narrow.
So is this sort of a solution, or certainly an improvement, for marketers?
Usually in a marketing campaign, if you had a 3 percent response to direct mail, that's considered a very good response. If you can move that up to 4 percent, it doesn't sound like a huge change, but it's a 33 percent improvement. So for every dollar you spend on advertising, you're getting a 33 percent improvement. That's pretty tempting. So the desire for business to do that, to find any incremental improvement, is very great.
So there is a whole infrastructure to this that helps explains why we get these solicitations in the mail, right?
It's very hard for you to guess why you're getting things. Sometimes -- not very often -- you'll get an "Occupant" at an address. When that comes in, even that's not random, because they're playing by ZIP code. They're not sending the same thing to the urban and to the rural, to the rich and to the poor; they're targeting by ZIP code. But for a lot of other solicitations, if your name's on it, they're narrowcasting. They probably know between three and 20 things about you and have sliced and diced it that way.
How far along are they in getting really customized messages sent out to people?
We're a long way towards targeting based on the big things you've bought -- the car, the house, the boat -- but also what credit cards you've taken, a variety of other major purchases. We may see another step, where they start to know about what kind of books you're reading, what kind of content you look at online. That's a step that hasn't really happened. It's one of the mysteries whether we're going to get that.
What is the inhibition?
Well, so far, there's no privacy law that prohibits the bookstore or the book Web site from selling it to Acxiom. Many of those companies, though, have privacy policies where they've announced they won't sell it to third parties. If they break their privacy promise, they're subject to prosecution. We saw with Monica Lewinsky, the books that she bought ended up getting subpoenaed by [independent counsel] Kenneth Starr. So we know this kind of thing is possible, but I think the bookstores are a little worried to sell and to have it known that they're selling this information. Maybe you bought a book or a magazine or downloaded content you wouldn't want everyone else to know about. If you think that's being sold, you might not shop there.
Why are we more worried about books?
Well, we might not be differently worried. It might just be that some things become public record, some things become known. But I think we are more worried. There's a famous story: When Robert Bork was nominated for the Supreme Court, an enterprising reporter went down to the local video store and tried to look up all the movies Bork had watched. Maybe he hoped to find Bork watching things that didn't fit his Moral Majority image. I've been told that what he really was watching was a lot of John Wayne movies, and it's hard to criticize a judge for liking John Wayne, the American hero.
But that really woke up Congress. When they found out that Bork's movies were being watched, some of those members of Congress said, "Uh-oh, I might have watched some movies I shouldn't have watched," and within a few weeks they passed a law prohibiting the video stores from telling what was being given out. I think what that shows is that politicians are people, too, even if we're not always believing that. They wanted some privacy for their own life there.
I think we've had a long history here, but it smacks of censorship, and it smacks of political risk if our reading habits are being examined. On the other hand, when it comes to how much your house costs and who you got it from or who you married, all of that's in public domain.
What else might be more sought after, more valuable?
One classic thing is to sell magazine subscription lists. So if you subscribe to a left-wing magazine, you've often historically gotten solicited for other left-wing magazines. Same on the right. And that's been a way for marketers to guess what you're really interested in.
Marketers want to rely on things that you've really done, not just so much [what] you say you're going to do. So marketers, if they can get hard data, think that they're going to reveal what customers really care about. If they have hard data, they can also sell that to their customers. They can seem scientific and really try to sell
the companies that they have the magic formula for marketing success.
Is there a downside?
Well, is there a downside to pigeonholing people? I think that a lot of people don't like to be pigeonholed. If you're being told that you're this kind of yuppie or that kind of blue-collar person and you become aware of that, you can start to resent it. And so one thing that's happened here is in the marketing world, the folks are very explicit about what's going on. If you read Direct Marketing News, you'll see spectacular claims about how well we can pigeonhole people. But the hope is that real customers out there, real people out there, won't really know how they're being pigeonholed.
In the end, it seems what this is all doing is reinforcing our differences.
... Instead of being Americans, we're sliced into 70 demographic groups. We might be sliced into hundreds of subcategories under that. And then the worry is that we don't share anything as a people. Some people think that democracy was enhanced in the three-network world that we grew up in, or four networks, because we were all watching the same shows. We all saw Gilligan's Island, and we all saw Walter Cronkite, and that way, as Americans, we shared certain things. Today, if there's 500 channels and five million Web sites, maybe we're not going to share so much as Americans. Maybe we'll lose the sense that we're all in this together.
And there's risks down that road. One of the risks is we don't feel the same as everyone else. We're reading the things that we agree with, but not the things that will challenge us to reach out beyond it. That's one of the risks. Another risk is that politicians can talk out of 500 sides of their mouth, right? So we can have now targeted e-mails, targeted ads that go to the gun control people or the abortion people or the NASA people.
I remember when I was a teenager, I was in a political campaign, and I went door-to-door for a candidate, and one guy I met, his whole thing was NASA; that's all he cared about. When I talked to this one person, all he wanted to hear was what my candidate cared about NASA. [It] took my legwork of going door-to-door to find this NASA person and then to try to convince him to vote a certain way. Today it wouldn't happen door-to-door. Today the fact that he subscribed to a bunch of space-exploration publications might trigger a "You love NASA, we love NASA," political ad. And down the street there might be somebody talking about fiscal conservativism; he or she would get a different ad -- the same candidate telling very different stories at the same time.
What about the effect this is having on democracy?
Right. Well, one possibility is that people get the information they care about. There's this optimistic vision of marketing, political marketing or commercial marketing which is if you get 1,000 ads this month, you get 1,000 ads that are interesting to you. If you're a New Yorker reader, maybe you don't get the stock car magazine and vice versa. And that way you're using your time better as part of the efficiency of America to get you the information you're interested in. That's an optimistic vision.
A pessimistic vision is we're splitting America into tiny pieces and we're not sharing America. Or another pessimistic problem here is that it's manipulation. It's a hidden persuader, because we don't realize that we're being pigeonholed; we don't realize that the words we're reading are not the words that people down the street are reading, and we might be fooled that way.
The price of marketing will be a new kind of vigilance -- vigilance by the press, vigilance by the watchdogs to make sure the candidate is saying the same thing in different places.
What's data mining?
The idea of data mining is we have more data than we've ever had before. We have a mountain of data. How can we dig into that mountain to find the nuggets of gold?
When and how did the political parties catch on to all of this?
A huge change was in the 1980s, when a direct marketing genius named Richard Viguerie really got the Republican Party going on a direct mail campaign. He created a mailing list that was a group of fervent believers that became the fund-raising basis for Republican success. His insight was [that] you could use the tools for marketing from the commercial side and apply them to politics.
There's a very strong natural selection in marketing that people who get results get paid and then sell to the next round. The marketers are the American geniuses who know how to succeed. Once those geniuses are making money for clients, then they can start making money for political clients, and that's what we're seeing more and more and more.
How important was Viguerie?
Viguerie was crucial to the rise of the Republican Party to a majority status in the Congress. By getting committed individuals who heard the Republican message again and again and again, he motivated a base that became the base for taking over the United States Congress.
So it's not a debate about issues so much as it's emotional.
Right. Viguerie is [about] how to get that deep marketing belief going from his true believers. And I think that level of commitment turned into a motivated base that really transformed American politics.
And how does this connect to campaign ads on TV?
Well, the big worry about TV ads is that the clutter just means people turn them off. Or in a TiVo world, the worry is that they'll fast-forward past the ads. But if you get something that's just for you, that triggers your interest in the headline or in the cover of the direct mailing, you might open it, and you might start believing; you might start acting.
So given all this, how does a modern candidate's campaign approach getting their message out?
It's a big country. We have diversity in America. If you want to get up to 51 percent of the vote, you probably have to assemble a coalition of 20 or 30 or 50 demographic groups. So as a modern candidate, you want a targeted ad on the gun control, on the pro-life, on the military, on the economic issues. You're going to want to have a message that's tailored for each one of those groups. If you don't do it, you're putting out broadcast ads in a narrowcast world. You're going to have your response rate lower, you're not going to be spending your money well, and that means you're falling behind in the arms race.
Is the red and blue divide in America a fallacy?
Well, the red/blue divide includes a dozen or 20 battleground states. And if you can move 2 percent in those battleground states, you might win the presidency. So there's a huge stake to understanding at a very fine level of detail what those demographic groups are and how to reach them.
In the end, to get the 51 percent, you have to build up 10, 20, 50 demographic groups. You need to have little slices that add up to the whole pizza, and that's what the demographics are about.
And what will happen then?
Well, when a direct mail comes into your house, are you tempted enough to open it? You don't know how they got your name on that list. You don't know anything except here's some piece of mail that tempted you. Out of all the ones in your inbox, this is the one you opened. But if you open this one a little more often than you open the other ones, you're giving success to that direct mailer who had that hot button for you. One of the things that means is that we're going to lose that sense of commonality; that it turns out that Americans will live in different virtual universes.
OK, what's wrong with living in different universes? One is you never confront the other side. You don't have to deal with the uncomfortable facts that go against your worldview. It's the idea of having to debate at work or school or wherever you are, having to debate people from the other side, and [with] that debate comes knowledge and comes sometimes a humility and a willingness to listen. But here we get a hardening of the partisan divide.
If all the things you're reading reinforce your preconceptions, if you're living in your little demographic universe of the things you care about, you don't confront the other side, it hardens the partisanship that's been such a feature of recent American politics.
But the messages look objective, don't they?
Right. The messaging is usually presented by somebody who says it's fair and balanced at some level. But now we're in an era of 500 TV stations; we're not going to agree on what's fair and balanced. And in fact, we're going to watch the TV stations that fit our little interest; we're going to read the direct mail that fits our interest; and when we get the e-mail messages, when we get the Web sites, we're going to look at the ones we think are right. We're going to reinforce our preconceptions, and we're not going to tend to see the other side.
It seems that with these targeted messages, we're not able to know much about the politician. It's just this one issue or message we're hearing.
What the politicians do is they tailor their message to each demographic group. Their policies are micromanaged for demographic reasons -- not just for the battleground states, but for the battleground demographics.
In the end, isn't this democracy at work?
Right. On some level this is a democratic dream: The politicians are listening to the people and responding to what the people want.
[But] there's a couple of problems. One problem is the politician doesn't deliberate on his or her own: What do I really believe in? What vision do I have for America? That gets submerged into what are the key demographics that I have to attract this week?
Another problem is the short term beats the long term. If I can shift the demographics right now for this short time in the election, then I'm going to try to get victory. And instead, we don't get to have a message that's going to read broadly enough to pull the whole country together.
Who are those people you shift for this short time ...?
In every state and in every election there's swing voters. If you're running for Senate, you're going to know your state well enough to know the two or three or five demographic groups that are likely to swing the election. And now you can do the focus group, and you can do the demographic research, and then you can figure out, how do I target these very narrow slices? For people who aren't in a swing group, they'll never see the ads; they'll never get their issues paid attention to, because they're not the ones who are swing voters. And so there's a great temptation for the politicians to say, where do I get that incremental vote? Where do I get that one little demographic vote, and how do I talk to those people so that they're listening to me and no one else realizes that their [issues] aren't being paid attention to?
... We used to worry that politicians would talk out of both sides of their mouth. Now maybe they're talking out of 50 sides of their mouth. Why? Because now we've got the demographic groups cut up so finely that the messages are going out to very different groups in very different ways. We're having a separation of what politicians are saying to different parts of the American people.
There's occasional moments, [such as] the presidential debates, where the politicians have to talk to the entire American public. But how rare is that? It might be two or three times in the whole year. The rest of the time is carefully tailored messages using Acxiom materials, using demographic materials. The rest of the time [these] carefully tailored materials are the way that the politicians are speaking to Americans. We don't get a give-and-take; we don't get to push back and find out what the candidates are really thinking.
And what about the power of emotion, harnessing that? Again, how does that fit into this?
At some level, we know that emotion is more powerful. Remember being a teenager and how you feel about somebody of the opposite sex? Even if you know it's dumb, you still feel that way. And over and over again in politics, your fears or your hopes are going to powerfully motivate you. If they know what your fears and your hopes are, they can tailor to you. And all the nice editorials by the wonks won't change things.