Information broker

An information broker is a business or an individual that collects consumers' personal information and sells that data to others. Also known as data brokers, information brokers harvest information from a variety of public and non-public sources—such as online databases, public records, website cookies, and loyalty card programs—and use that information to construct profiles of individuals that companies often use to create targeted advertising or conduct market research. Because the information brokering industry is not currently subject to government regulation, consumers generally have little control over of how their personal data is accessed or used by information brokers. Some information brokers may also exploit the lack of industry regulation to acquire personal information through illegitimate means or sell such information to parties that may intend to use it for illicit purposes. Regardless, information brokering is a quickly growing field that is only likely to expand as the Internet continues to be an ever-present part of consumers' everyday lives.

Background

The practice of information brokering is based on the concept of data collection. Data collection is the practice of gathering and measuring information in a specific manner that allows the collector to answer a question, test a hypothesis, or evaluate outcomes. Data collection is often a key component of research in the sciences, humanities, business, and other fields. As it pertains to information brokers, data collection is usually concerned with the gathering of information that offers insights on consumers and their interests, spending habits, and more.

While the methods used may vary, data collection is always primarily concerned with the acquisition of accurate information. Acquiring accurate information allows researchers to conduct detailed data analysis and develop conclusive answers to the questions being posed. In business, data collection serves as a means through which a company may construct a clear picture of its consumer base and arrive at conclusions as to how it might better reach and profit from those consumers. In pursuing the collection of accurate information, data collectors may rely on an array of collection tools, including existing or modified tools or entirely new tools they have created to fit their own specific needs. Using such tools properly helps to reduce the likelihood of error and ensure the best possible outcome. Still, mistakes can be made. Inaccurate or otherwise skewed results are often due to improper or incomplete data collection. If the methodology employed in collecting data is suitable for the task at hand or if the process of data collection itself is not carried out appropriately, the ultimate results of the research that data is used for may be inaccurate.

The value of data collection in business has grown over time. Businesses of all kinds have increasingly come to rely on data collection as a way of gathering important information on markets and consumers. Data collection has also emerged as a business in itself. The specific concept of information brokering first began to appear in the mid-1950s. It has particularly grown since Internet access first became commercially available in the early 1990s. Today, the Internet is the largest marketplace and tool for information brokering.

Overview

Information brokers are entities—whether individuals or companies—that gather various types of consumer data and sell that data to a third party. The third party in question may be an individual, a business, or another information broker. Information brokers typically do not have any sort of relationship with the individuals whose personal data they collect. As a result, most people targeted by information brokers do not even know that their data is being harvested. Even when people know that information brokers are targeting their data, they often have little control over the process. Although some information brokers allow consumers to opt out of data collection programs, consumers may still face limitations as to the type and amount of data that can be protected. Consumers also have little or no control over how long information brokers may store their personal data. Some information brokers may only store data temporarily, but others may keep it indefinitely. Because there is little government regulation of the industry, information brokers are generally free to do as they please with consumer data.

There are several different types of information brokers. Specific information brokers can be categorized according to the type of service offered or the level of insight provided. In terms of the type of service offered, there are three main categories of information brokers, including those that focus on people-searching, marketing, or risk-mitigation products. People-search information brokers refer to those entities that host websites through which users can enter data such as a person's name and automatically retrieve any personal information that a broker has on that particular individual. This information may include things like address history, employment details, or property records. Information brokers that focus on marketing develop profiles of individuals that can be used to tailor marketing strategies. Such information brokers typically categorize consumers according to variables like age, ethnicity, or education level. These brokers also often sell lists of the names or email addresses of consumers to companies interested in marketing directly to those individuals based on their interests or other personal details. Finally, data brokers that specialize in risk-mitigation products gather data that they then use to help clients to verify identities or detect fraud. Assuming the gathered data is accurate, this type of information brokering is typically the least potentially problematic for consumers.

In terms of the level of insight provided, there are three differed types of information brokers: simple data services, smart data services, and adaptive data services. Information brokers that offer simple data services harvest data from multiple sources and provide it to clients in an assembled and conditioned form. Information brokers that offer smart data services provide clients with conditioned data with various analytical rules and calculations already applied so as to make the decision-making process even easier. Information brokers that offer adaptive data services analyze the client's requested data within the framework of a specific context.

The cost of information brokering services may vary. Some information brokers may offer their services at no cost at all. Others may offer some free services and some that are provided at a premium. Still others require payment for all services rendered, either per transaction or via a subscription.

Bibliography

Booth, Barbara. "What Internet Data Brokers Have on You

“Data Collection.” Technopedia, www.techopedia.com/definition/30318/data-collection. Accessed 30 May 2019.

Grauer, Yael. “What Are 'Data Brokers,' and Why Are They Scooping Up Information About You?” Vice, 27 Mar. 2018, www.vice.com/en‗us/article/bjpx3w/what-are-data-brokers-and-how-to-stop-my-private-data-collection. Accessed 30 May 2019.

“Information Broker – What They Do.” College Foundation, Inc., www1.cfnc.org/Plan/For‗A‗Career/Career‗Profile/Career‗Profile.aspx?id=edMrqnSJebpXYIKXsDcurwXAP3DPAXXAP3DPAX. Accessed 30 May 2019.

“Information Brokers.” Inc., www.inc.com/encyclopedia/information-brokers.html. Accessed 30 May 2019.

Leetaru, Kalev. “The Data Brokers So Powerful Even Facebook Bought Their Data – But They Got Me Wildly Wrong.” Forbes, 5 Apr. 2018, www.forbes.com/sites/kalevleetaru/2018/04/05/the-data-brokers-so-powerful-even-facebook-bought-their-data-but-they-got-me-wildly-wrong/#4749b7583107. Accessed 30 May 2019.

Moore, Susan. “How to Choose a Data Broker.” Gartner, 8 June 2016, www.gartner.com/smarterwithgartner/how-to-choose-a-data-broker. Accessed 30 May 2019.

Rouse, Margaret. “Data Broker (Information Broker).” TechTarget, Sept. 2013, whatis.techtarget.com/definition/data-broker-information-broker. Accessed 30 May 2019.

“What Are Data Brokers – And What Is Your Data Worth?” WebFX, www.webfx.com/blog/general/what-are-data-brokers-and-what-is-your-data-worth-infographic. Accessed 30 May 2019.