What you may not know about the boom in digital user data

— -- When you're surfing the web and spot targeted ads based on your prior searches, it's a jarring reminder that someone — companies, websites and search engines — is following your digital footsteps.

They are also following the money. The volume of personal digital data available is transforming everyday commerce, particularly marketing and advertising.

Companies want to engage and interact with you through multiple platforms that can include emails, mobile devices, social media and online video — and even use that new data trove to spawn new forms such as junk mail. They want you to linger, get to know your likes and dislikes and offer more targeted promotions.

In fact in four years, advertisers will spend $77 billion on digital interactive marketing — as much as they do on TV today, according to research firm Forrester.

With so much money at stake, it's no wonder companies are retooling how they use metrics and analytics to achieve business goals. Other industries including financial services and health care are also working to capitalize on the data boom.

"In the span of just a couple of years, how we think about customer data has really changed," says Fatemeh Khatibloo, senior analyst at Forrester, who specializes in customer intelligence, privacy and personal data issues.

The fast-changing industry is breeding startups, which are remaking existing models and platforms to lure more and more venture capital.

Naturally, the volume of personal information has privacy activists concerned about opaque companies and governments potentially abusing their power. Just a year ago in Egypt, then-President Hosni Mubarak shut down Internet access before his government began a crackdown on political protesters.

Lest you think the issue is confined to nondemocratic governments run by despots, protests erupted in January over anti-piracy legislation in the U.S. Congress.

Buying, selling your personal data

As individual consumers navigate the digital world, the advertising and marketing industry is busy maximizing the growing volume of online metrics and analysis.

Of course the exchange and use of customer user data have been around for decades. What's changed is the depth of data gathered, and how far and quickly that information is being sold and shared among businesses.

"People have less understanding of what's going on and how their information is being shared," says Rebecca MacKinnon, an expert on global Internet policy.

In the next three years, consumers will likely see even more targeted promotions like those of Groupon, and mobile and video advertising, according to a recent Boston Consulting Group report on the evolution of online-user data.

For example, Time Warner Cable allows some home-based customers to download videos from the cable operator. That kind of individual-use data gives advertisers more pointed digital advertising opportunities.

"It's clear to everyone that the ability to understand more about an individual's behavior pattern creates a huge amount of value," says John Rose, a senior partner at BCG and co-author of the report.

Another trend is the emergence of a secondary market for buying and selling user profiles.