Data Mining and Attention Consumption

Abstract

This Essay challenges the prevailing hostility towards data mining and direct marketing. The Essay starts by defining data mining and shows that the only important step is how data is used, not its aggregation or sorting. The Essay then discusses one particular type of data use, the sending of direct marketing. The Essay establishes a model for calculating the private utility experienced by a direct marketing recipient. The model posits that utility is a function of the message's substantive content, the degree of attention consumed, and the recipient's reaction to receiving the message. The Essay concludes with some policy recommendations intended to help conserve recipients' attention while preserving space for direct marketing tailored to minority interests.

Keywords: Data mining, database, data warehouse, privacy, advertising, marketing, email, spam, telemarketing, direct marketing, direct mail, junk mail, customer relationship management (CRM), economics of attention, economics of marketing, externalities, Coase Theorem

JEL Classification: D11, D23, D62, D82, D83, K10, L51, M31, O33