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The future of AT&T is an ad-tracking nightmare hellworld

There’s a long, excellent profile of the new AT&T and its CEO Randall Stephenson in Fortune today, which you should read. AT&T has transformed itself into a media colossus by buying Time Warner, and understanding how the company plans to use its incredible array of content from HBO, CNN, TNT, and others in combination with its huge distribution networks across mobile broadband, DirecTV, and U-verse is important for anyone who cares about tech, media, or both. Seriously, go read it.

Here’s the part I want you to pay attention to: two quick paragraphs describing how AT&T sees the future of advertising across those media properties and networks. It’s the same plan AT&T has laid out before, but it’s more specific now, and that specificity makes it chilling. I’ve bolded the scary part:

“Say you and your neighbor are both DirecTV customers and you’re watching the same live program at the same time,” says Brian Lesser, who oversees the vast data-crunching operation that supports this kind of advertising at AT&T. “We can now dynamically change the advertising. Maybe your neighbor’s in the market for a vacation, so they get a vacation ad. You’re in the market for a car, you get a car ad. If you’re watching on your phone, and you’re not at home, we can customize that and maybe you get an ad specific to a car retailer in that location.”

Such targeting has caused privacy headaches for Yahoo, Google, and Facebook, of course. That’s why AT&T requires that customers give permission for use of their data; like those other companies, it anonymizes that data and groups it into audiences—for example, consumers likely to be shopping for a pickup truck—rather than targeting specific individuals. Regardless of how you see a directed car ad, say, AT&T can then use geolocation data from your phone to see if you went to a dealership and possibly use data from the automaker to see if you signed up for a test-drive—and then tell the automaker, “Here’s the specific ROI on that advertising,” says Lesser. AT&T claims marketers are paying four times the usual rate for that kind of advertising.

So, yeah. This is a terrifying vision of permanent surveillance.

In order to make this work, AT&T would have to:

  • Own the video services you’re watching so it can dynamically place targeted ads in your streams
  • Collect and maintain a dataset of your personal information and interests so it can determine when it should target this car ad to you
  • Know when you’re watching something so it can actually target the ads
  • Track your location using your phone and combine it with the ad-targeting data to see if you visit a dealership after you see the ads
  • Collect even more data about you from the dealership to determine if you took a test-drive
  • Do all of this tracking and data collection repeatedly and simultaneously for every ad you see
  • Aggregate all of that data in some way for salespeople to show clients and justify a 4x premium over other kinds of advertising, including the already scary-targeted ads from Google and Facebook.