Visa, MasterCard to use buying history for ad targeting?

The credit card companies are reportedly working on plans to take customer purchase data and use that to deliver targeted ads.

Don Reisinger
Don Reisinger
Former CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
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All the purchases you make with your MasterCard or Visa could be used to provide you with more-targeted ads as you surf the Web, a new report claims.

According to today's Wall Street Journal, the credit card companies are currently trying to work out a system whereby purchases consumers make in a brick-and-mortar store can be used to deliver more effective ads online.

A MasterCard document obtained by the Journal outlines some of the company's plans, which included linking Web users with purchases. According to document, the credit card provider said it believes "you are what you buy."

However, MasterCard told the Journal that the plans included in that document have been shelved because it would have revealed too much information about individual buyers. Instead, the company told the Journal, it is exploring ways to anonymously group a person's purchase history with others to create marketing "segments." That data would then be sold to marketing firms.

Citing a source, the Journal said that Visa is planning a similar service, which would aggregate its customers' purchase history into segments, including location, to make ads more effective at appealing to people in a respective area.

Although those plans might have a profoundly positive impact on the advertising industry, it does raise several privacy concerns. Although companies have long shared customer data with marketing agencies, individual consumers have always been wary of companies peering into where they are, what they're buying, and how much they're spending.

For its part, MasterCard told the Journal that customers have nothing to worry about. For one, the company says, it collects data, such as when a purchase was made and where, on 23 billion transactions, but it never includes who actually makes the purchase. Plus, both MasterCard and Visa, which also collects that information, allow users to opt out of the data collection, if they so choose.

Looking ahead, there's no telling what MasterCard and Visa will do, since, as the companies pointed out to the Journal, their plans are still "preliminary."

However, as the Journal's sources in the advertising industry said, buying history is a potential treasure trove for marketers. And MasterCard and Visa, along with other credit card companies, realize that. What's more, the Journal says, MasterCard could be getting close to selling purchase data through online data auction services, BlueKai and Exelate, though those firms have yet to sign an agreement.

Neither Visa nor MasterCard immediately responded to CNET's request for comment.