MasterCard is getting into the predictive online marketing business.
Through a new partnership with an Internet company that specializes in personalized shopping, MasterCard is set to introduce a Web shopping mall on Monday that it says can pinpoint with considerable accuracy what its cardholders are likely to purchase.
The site, called MasterCard Marketplace, relies on technology developed by Next Jump, a New York company that monitors customer behavior from thousands of retailers and uses the data it gathers to help merchants tailor their product offerings.
While MasterCard describes its approach as a potential game changer, luring consumers to a shopping site run by a payment network rather than a retailer is an uncertain proposition.
Some privacy advocates, meanwhile, say the technology makes them uncomfortable.
Anita L. Allen, a law professor who studies privacy issues at the University of Pennsylvania, said that as consumers gave up more private information for short-term gains, “In the end, we turn into citizens who live in a world where we have no control over our own data.”
Of course, companies of all kinds try to anticipate what consumers will buy and tailor their marketing programs accordingly, including MasterCard’s rivals, Visa and American Express. But the success of personalized online shopping has been mixed.
MasterCard’s competitors are also trying to expand their presence in online commerce. For instance, American Express has a site called “Daily Wish” that offers discounts, and Visa is in the process of introducing RightCliq, intended to help consumers comparison-shop online.
Next Jump’s selling point is that it draws on buying patterns across thousands of retailers, giving it a huge sample size of consumers to analyze.
Charlie Kim, the company’s founder, says Next Jump converts one in every 11 browsers into buyers, a rate that far exceeds the industry norm.
The company runs employee discount and reward programs for many big companies. For more than a decade, it has gathered mountains of data to help refine its algorithms for predicting what people are likely to buy.
On the new MasterCard site, shoppers will be asked to select a handful of merchants they favor. From there, Next Jump will monitor how they use the site and adjust offers accordingly, said Joshua Peirez, MasterCard’s head of innovation platforms.
“Next Jump measures everything you do on the site,” Mr. Peirez said.
Next Jump’s technology is already available on Yahoo’s shopping site, as well as on the sites of many corporate perk programs that offer merchandise discounts to employees. In 2008, MasterCard began offering discounts to debit card holders on a Web site called MasterCard Savings that employed Next Jump’s algorithms; officials described it as a pilot project.
MasterCard said it was working to assure customers’ privacy. For one thing, customers are not automatically enrolled in the marketplace site but must sign up on their own. Retailers will not be provided names of specific customers but rather a batch of customers who share certain characteristics, like income level or having young children.
But some privacy experts question the growing use of customer data on sites like MasterCard Marketplace, even if people divulge it willingly.
Joseph Turow, a communications professor at the University of Pennsylvania, said that hiding the identity of customers from merchants was not enough.
The type of profiling done by sites like MasterCard Marketplace, he said, often leads to “social discrimination,” in which people are lumped into categories they may find objectionable. He said companies rarely explained to people how they were categorized.
“People might be happy with a Dell 30 percent off, but why did my neighbor get one deal and me another?” he said. “We are accepting this notion that companies have a right to do this.”