Social media: it’s an omnipresent force in our modern society, and we can’t imagine a day without flicking through our feeds at work.

Don’t lie, we all do it.

But have you ever stopped and wondered how an advertisement spruiking the newest gym in the neighbourhood appears in your Facebook timeline minutes after ‘liking’ a gelato shop’s post?

The increasingly lucrative business of analysing internet and real-world activity is creating exhaustive networks of data, all to be sold to advertisers.

A recent New York Times investigation highlighted the rich depth of information advertisers hold on potential customers, including their shopping habits, political inclinations and weight-loss intentions.

A sample of the advertisements released by The New York Times. Photo: nytimes.com

Working with experts, the publication bought a series of targeted advertisements that revealed the extent of the modern advertising industry’s knowledge of social media users, and the potential for it to be misused.

“Our information is used not just to target us but to manipulate others for economic and political ends — invisibly, and in ways that are difficult to scrutinise,” NYT graphics director Stuart A. Thompson wrote.

David Reid, an advertising academic at Swinburne University, suggests Australian consumers may underestimate how much of their material is mined.

“There’s a certain naiveté or lack of awareness around advertising communication in various digital spaces, and [social media users] have little understanding of being targeted so cleverly,” Mr Reid said.

“Online and mobile have given advertisers the ability of track behavioural aspects of consumers – part of it’s modelled, but a lot of it is real.”

How does targeted advertising work?

Ad agencies have operated since the dawn of newspapers and broadcasting.

But specialised companies pull information from datasets (including anonymous census data) and the media industry, including social media companies.

https://www.youtube.com/watch?v=8KYugpMDXAE

Combined with real-world behaviours like grocery shopping, which can be tied to user’s email accounts through loyalty cards, these companies generate highly specific audience profiles.

Researchers like Roy Morgan can further refine this data, segmenting groups on presumed values like sporting team and political affiliations, with these profiles then forwarded to advertisers.

“What’s been happening in the digital world at an increasing rate is the ability for advertisers to track almost every movement made by consumers,” Mr Reid said.

“It’s valuable because that’s the nature of modern business – if we turn [these technologies] off, we’re moving backwards.”

Is targeted advertising concerning?

Facebook has introduced new features allowing users to glean detailed information about the advertisements they see in their feeds.

For instance, users can learn more information about the geographic location of a particular social media advertiser, or why they are being targeted by a particular ad.

However, questions remain about how personalised digital advertising can influence audiences in times like federal elections.

The rhetoric around online advertising remains sinister, in light of the recent Cambridge Analytica data-sharing scandal that embroiled the social media giant.

Mr Reid believes the Australian code of ethics should be updated to reflect the growing influence of social media companies on advertising practices.

Details Facebook can now provide users whenever they see an ad in their feed. Photo: Facebook

“The ethical framework of these datasets is fairly unclear, and there’s little oversight at the moment,” Mr Reid said.

“You can’t stop technological development, you can just put in place stronger oversight on processes. That’s where the gap is.”