Profits vs. Privacy as Businesses Mine Consumer Data [Video]

Businesses are watching you-more than ever before.

Newly-armed with analytics technology, retailers, search engines and social networks are all eager to turn data into profits.

For one example of how they're doing it, consider the way rental car company Avis is courting road warriors. Avis Europe is using technology to offer just the right bargain on just the right car, and get customers to rent more often.

The secret sauce: analytics software. It finds patterns in a flood of data-insights that give businesses an edge. In Avis's case, after looking at rental patterns and website browsing habits, the company is better tailoring e-mail marketing pitches.

It's working. Since Avis began using IBM's analytics software in its marketing programs, Avis has slashed marketing costs in half and boosted loyalty.

"We reported in the second quarter that we experienced 14 percent growth in our business analytics and optimization business," says Steve Mills, who leads IBM Software. "We think this is an area that's probably going to grow at least 2 times, perhaps even 3 times the overall I.T. industry over the next five years."

And Avis is not alone. Today, analytics software is a $25 billion market, and it's growing fast.

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