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The massive data-collection industry that fuels Facebook's targeted ads

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The site is buying access to reams of consumer data that's never been shared online

Mark Zuckerberg Facebook Stock
Mark Zuckerberg Facebook Stock

Facebook's user-targeted ads have been fueling profits and unsettling privacy advocates since the beginning, but a new report shines a light on just how extensive the company's research is. As it turns out. Facebook's data-collection efforts don't stop once you leave their site. They don't even stop when you leave the internet.

Facebook's data-collection efforts don't stop when you leave the site

This week, the New York Times shined a light on four companies contracted by Facebook to provide user data from outside the site — ranging from court records and survey data to point-of-purchase information collected by retailers. Combined with Facebook's internal analytics, it allows the company to build a comprehensive profile of each user, including information they haven't shared on the site, which allows advertisers to more accurately target specific demographics, or even specific users. In one example, Facebook targeted specific users with ads for items they had previous browsed on the e-commerce site JackThreads.

Another source is customer-loyalty programs, which have been compiled into large databases by companies like Epsilon, Axciom and Datalogix and, increasingly, sold to the highest bidder. All three of the companies are named in the report, and used to direct advertisers to ad-friendly Facebook users. Most users have no idea the data is being collected, and certainly not that it's being combined with their Facebook profile, which has triggered concern from privacy advocates. Both Acxiom and Datalogix are currently under investigation by the Federal Trade Commission to see how they collect and use consumer data, but the agency has yet to allege any wrongdoing.