Local News

More Companies Turn To Data Mining To Target Consumers

Posted April 27, 2000 7:00 a.m. EDT

— Your name and personal information is stored on computers across the country, everything from the IRS to health and business databases. Thanks to data mining, the technology allows the information to be used in different ways.

Every time you use a food savings card at a supermarket, the company is secretly mining the data activated by the cards to trace your buying habits.

Cary'sSAS Instituteleads the market in data mining software. It is used by major companies worldwide. Other companies produce similar software.

"This is one of the newer tools that allows a company to get to know their customers better," says Joan Myers, President of theNorth Carolina Information Technologies Association. "It helps target markets so by having that or having that additional information, you can better target markets."

Amazon.comuses data mining to show which books sell best in Raleigh or which books are read by First Union National Bank employees. Amazon mines data about zip codes, Internet domain names and complies it in a database. No personal information is used.

It is important to read the fine print on Web sites. The key to privacy is how information is used.

"I think you've seen in the industry incredible steps, especially in the last two years, to protect privacy, to have privacy statements and to make clear to the customer how that information is used," Myers says.

Data mining and the warehousing of the information is used by financial companies, retailers, and chemical and pharmaceutical companies. However, consumers usually make the decision to offer information.

"It's an option. You do not have to fill that out," Myers says. "You do not have to proceed so it's a choice to give information."

Some privacy advocates look at data mining as a method to gather information to use against consumers, but it is quite the opposite.

Companies generally use it to become more efficient and offer products and services to consumers.