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Marketing or mind-reading? How companies turn your online habits into sales

Targeted advertising generates billions in revenue for tech giants and their clients each year, but the practice is largely unregulated and misunderstood.

SAN ANTONIO — Breanna Beckman pays enough attention to the ads that speckle her Instagram feed to spot a product she likes.

"I got one for a pair of socks and I was like, 'Those are so cute. I need those,'" she said. "I literally bought them off an Instagram ad."

Lately, Beckman says her social media timelines have become sorts of marketplaces where trade is more common than sentiment. The apps once designed to invoke memories, promote discussion, and reunite friends have morphed into advertisers' playgrounds.

"I used to always joke around that you can talk into your phone and say, 'Wallpaper' and it's going to show ads for wallpaper," she said. "It used to be kind of weird but I feel like I'm so used to it now."

Targeted advertisements blend into millions of Americans' timelines. Experts say they've become all but impossible to avoid.

"We don't pay for those (social media) platforms," LSU professor Lance Porter said. "We pay for them with our information."

Porter studies social media and how powerful people wield the internet to influence behavior. He says targeted advertising helps companies stretch their marketing dollars.

A retailer can save money, for example, by tailoring its advertising to people who are most likely to buy its products. This strategy aims to ensure expensive advertisements are not wasted on the wrong, disinterested clientele. Instead, a company can use tools like Facebook's Pixel to seek out users it thinks are most likely to become customers.

Experts think roughly 10 percent of all websites are using Pixel to understand internet users' identities and habits, including the behavior of users without Facebook accounts.

If your favorite brands are not using Pixel, they may use a similar profile-building service from a tech giant like Amazon or Google.

"It may seem like they're listening to us, but really it's because they have so much information on us," Porter said. "They don't need to listen to us."

Pixel tracks every swipe, click, and tap on millions of websites. It knows how much time you spend looking at certain items and whether you've added them to your cart.

Each logged action helps Facebook compile a more accurate profile on you and your interests. The technology also incorporates traditional demographic information, as well as your friends' information and habits, to create your persona.

Most companies will not allow you to see their profile of you.

"There's not any regulation on how this information is stored or how it's protected," Porter said, noting millions of people willingly give their information away by blindly signing terms and conditions. "Any time we put information into digital form, we lose a good bit of control over that information."

Porter facetiously contends there's no problem with giving away that much data, as long as companies are honest, safe, and transparent with its use.

Congress is only beginning to debate issues of information storage and security, meaning companies are operating on an honor system.

It's unclear, for example, who would be held accountable if a hacker stole millions of constructed profiles from a popular brand.

"Something has got to change with how this whole system works," he said. "It's simply the wild, wild west right now that this information."

Beckman sits at her kitchen counter, scrolling through Instagram. She stops on an ad for a clothing service.

"I feel like I got this because my friend had a birthday party on Saturday and she was like, 'Everyone wear dresses,'" she said. "Usually, I just scroll right through it, but that time I was like, 'Okay, wait. It knows me.'"

"Maybe ignorance is bliss. Maybe I don't want to know," Beckman continued. "Maybe I won't want to know what they're doing with this information about me."

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